Mayor Brandon Johnson’s administration will relaunch a popular guaranteed income pilot that has provided $500 monthly payments to low-income residents, as the city works to spend federal COVID-19 relief funding to avoid having to return it to the feds.
The relaunch was announced as part of the administration’s plan to dedicate and spend more than $374 million in federal funds earmarked for community projects.
The city — which has been slow to spend the money it received in 2021 — has to allocate all funds by the end of this year, and spend it by 2026, or lose the money. Chicago officials hope to have the funds allocated by November.
Officials say they are doubling down on funding successful programs launched by the prior administration, while pulling back on programs for which it’s been difficult to spend money because they’ve been difficult to implement.
“The bulk of the dollars on the community initiative side will go out, and have gone out, under this mayor. And so it is really critically important to him that we get this done correctly, and that we return zero dollars to the Treasury, and so that’s what our focus is,” city Budget Director Annette Guzman told reporters at a briefing Monday.
Thousands of families participated in the guaranteed, no strings attached income program last year. Several participants told WBEZ and the Sun-Times the program helped them cover unforeseen emergencies or pulled them above water financially.
But several said they wished it had lasted longer than one year. Demand drastically outweighed supply in the first round, with more than 176,000 people applying for just 5,000 slots. Guzman said details on when the next round of payments will be available are being finalized.
Under former Mayor Lori Lightfoot, the city of Chicago received nearly $1.9 billion in federal COVID-19 relief funding — the majority of which went toward city operating expenses.
Overall, the city has spent 79% of the federal funds and allocated 88%. But those percentages shrink when looking at funds set aside for community initiatives. Roughly $576 million was earmarked for such programs, and of that, the city has spent just 35% and dedicated about 59%.
Officials said Monday the city had been slow to “obligate” — the financial term for dedicate — funding for some of the programs, which address mental health, community safety, homelessness prevention and more. The reasons for the delay include changing federal guidelines on the definition of “obligation,” red tape with city contracting processes, and in some cases, a lack of available vendors to get programs off the ground.
Officials said they hope refocusing on what they view as “low-risk” and successful programs that have been deemed easier to implement will help them inject the funds into community programming faster.
Altogether, more than $80 million is being shifted as part of the Johnson administration’s reevaluation of the city’s spending, and 53 programs will be funded through the federal relief dollars. Among the programs receiving renewed funding is an additional $31.5 million for the guaranteed income pilot, bringing the total to $63 million; $11.6 million more to the Youth Opportunities Program that connects youth with jobs, for $66 million in total funding; $12.9 million additional funding to support small businesses and nonprofits for $33 million total; and $5 million in financial assistance to support survivors of gender-based violence for a total of $10 million.
Some programs will “sunset,” meaning they will be allowed to expire. Two programs — a proposed 20-bed sobering center to support people recovering from alcohol intoxication and a low-barrier shelter program to connect people experiencing homelessness with housing — will be canceled because of an inability to find program administrators by the end of this year, Guzman said.
Additionally, 40 programs deemed “high” or “medium-risk” will see funding reduced by a proposed $46 million. Guzman declined to name specific programs that will see a reduction in federal relief funding but stressed that programs needing more time to develop “have been shifted to funding resources that don’t have time limitations on them or that are more permanent in nature.”
As the administration races to meet looming deadlines, a proposed ordinance sitting idle in a City Council committee aims to curb Johnson’s authority to spend funds without Council approval for individual projects. In 2021, the Council voted to give the mayor the power to move funding as priorities shifted, Guzman said, but 34th Ward Ald. Bill Conway has sought to change that.
Conway’s proposed ordinance would require Council approval for any project or program receiving more than $1 million in COVID-19 relief funds, which would include the vast majority of the spending. Conway introduced the ordinance after the administration moved to reallocate $95 million in relief funding to support and house migrants coming to Chicago. The ordinance has failed to get a hearing.
Mariah Woelfel and Tessa Weinberg cover Chicago government and politics for WBEZ.
