Chicago’s 2025 budget session is underway and one area of contestation is how to generate revenue to fill the budget gap. Mayor Johnson initially proposed increasing the property tax levy by $300 million, but this was met with fierce opposition from a large number of city council members. Rather than relying on the property tax, Mayor Johnson and the city council are looking at a number of different ideas, one of which is to “reprogram” federal funds. As part of the American Rescue Plan Act the State and Local Fiscal Recovery Fund (SLFRF) program was created. The SLFRF program provides states, local governments, Tribal governments, U.S. Territories, and D.C. with $350 billion in highly flexible federal aid. The City of Chicago was allocated nearly $1.9 billion, and it is this money that Alderpersons and Mayor Johnson are considering repurposing.
Chicago already has plans for how it was going to use all of its $1.9 billion in SLFRF aid. This was the “Chicago Recovery Plan” which was developed during the 2022 budget process. Chicago is not, however, bound to the Recovery Plan so elected officials can choose to repurpose the money. But, not all the aid can be repurposed because 83% has already been spent. Some of the aid that hasn’t been spent, but cannot be repurposed because it’s obligated (Treasury defines an obligation as “an order placed for property and services and entry into contracts, subawards, and similar transactions that require payment.”)
To try and figure out how much money could be repurposed and which programs would be impacted I looked at the most recently released SLFRF data–the available dataset covers spending from the launch of the program through June 30, 2024. Governments must report information about how they are using the SLFRF aid to the U.S. Department of the Treasury (large cities like Chicago must report on a quarterly basis). Governments report this information at what’s called the “project” level and every project must be assigned to a group. The table below compares Chicago’s planned SLFRF spending with what has been obligated by reporting group (the groups were created by the Treasury Department) and the amount that is unobligated. In theory, the amount that is unobligated is what could be repurposed (with the available data it’s a bit hard to pin down the exact amount that is both unobligated and unspent).
| Group | Adopted Budget ($M) | Obligated ($M), as of June 30, 2024 | Amount Unobligated |
| Public Health | $147.87 | $87.90 | $59.97 |
| Negative Economic Impact | $277.14 | $212.67 | $64.47 |
| Public Sector Capacity | $10.59 | $7.36 | $3.26 |
| Revenue Replacement | $1,442.72 | $1,386.65 | $56.01 |
| Administrative | $8.28 | $8.28 | $0 |
| Total | $1,886.60 | $1,702.86 | $183.71 |
The two program areas with the greatest amount of unobligated funds are: community violence interventions ($39.92 million unobligated) and Chicago’s guaranteed basic income program (the Chicago Empowerment Fund, $32.42 is unobligated).
To me it seems like about $184 million of the SLFRF aid could be repurposed; however, the Sun-Times reported that the figure that could be repurposed is “$280 million in unallocated federal pandemic relief funds“. I’m not sure where that $280 million figure is from, but it could include money that’s in the “revenue replacement” category as money is fungible and that category provides maximum flexibility for governments. If elected officials do repurpose SLFRF aid they will have to obligate it quickly as under the program rules all aid must be obligated by December 31, 2024.
Amanda Kass 