As Chicago Mayor Lori Lightfoot’s administration makes its final pleas to aldermen to approve her 2023 budget recommendation, a new analysis suggests they are not getting the complete picture on the biggest budget item — police — and other city departments.
A new analysis from a former employee of the City Council’s Office of Financial Analysis suggests the Police Department’s stated budget has vastly underestimated the true annual cost of the department.
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The mayor’s $16.4 billion spending plan calls for an overall CPD budget of $1.94 billion next year. But when including other costs attributed to CPD that fall in lesser-known budget buckets, that true cost is over $3 billion. Previous police budgets under Mayor Rahm Emanuel’s administration have similarly appeared billions smaller than their real cost.
That’s according to Jonathan Silverstein, a former COFA analyst, who argues the city should be more transparent in its budgeting practices and show how major costs — such as pensions, overruns in overtime and legal settlements, benefits, and fleet and facility management — are adding up for Chicago’s taxpayers.
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The issue is especially vital as the city grapples with crime and continued debate over police funding in general. Several aldermen in recent years have called for the city to shift funding away from police and toward alternative responses, including violence prevention, housing and other human services. Some of their comments have echoed statements expressed around the “defund the police” movement that gained momentum during George Floyd-inspired protests of 2020.
Transparency around one of the biggest line items is also essential to begin tackling the city’s mounting debt and pension obligations, Silverstein told the Tribune. “Before you can begin to deal with your budget, you better know what you’re spending money on.”
A spokesperson with the city’s Office of Budget and Management declined to comment.
Silverstein and others acknowledged this issue is true of several other city departments whose pension and benefit costs are in other budget buckets. But CPD deserves special attention, Silverstein argued, for its size and the extent that it drives up the overall budget with overtime and legal costs that exceed budgeted amounts. CPD responsibilities are also a significant cost driver at the newly-created Office of Public Safety Administration, which provides shared services for Chicago’s public safety departments.
A recent analysis from the Better Government Association suggested that office cost more than it saved, which the city has pushed back against.
Silverstein, who now works for another municipality in the region and wrote his study independently, put together his analysis using the city’s own budget documents and data. In some cases, where the city reports things such as benefits and pension payments for civilian employees as a lump sum, he created estimates based on the Police Department’s head count, or the number of employees in certain bargaining units.
Laurence Msall, head of the Civic Federation, a fiscal watchdog group, said the analysis “points to the biggest policy debate going on in cities across the country: how much we should be spending on policing.” The topic is especially relevant for Chicago, he said, which is under a federal consent decree and where the department has come under scrutiny for transparency around officer deployments. Msall has previously called for more transparency around consent decree and personnel spending.
Msall said while the Civic Federation doesn’t evaluate other organizations’ research, Silverstein’s analysis appears reasonable based on the federation’s past reviews of city budgets. The Civic Federation has similarly sounded the alarm about the city lumping costs together in the budget bucket known as “finance general,” which includes debt, insurance premiums, pension contributions and other benefits for employees across city government. Combining those costs makes it difficult for the public and policymakers to track changes over time, and gives “enormous discretion” to the mayor’s budget team “without real cost measurements,” Msall said.
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It’s become more problematic, Msall told the Tribune, because “the city’s use of the category finance general has been growing at a rapid clip, especially over the past five years.” It totals $7.8 billion in the mayor’s 2023 budget, which Msall noted is a huge chunk of overall spending “in this one category that increased in the last five years by more than 56%.”
The city also tucked away $183 million for the Fraternal Order of Police contract within finance general in 2020 and 2021 .
The largest Police Department cost counted in “finance general” instead of the department’s budget is pension payments. The city pays into two funds for CPD employees: one for sworn officers; the other civilian employees. Payments to the Policemen’s Annuity and Benefit Fund of Chicago (for sworn officers) totaled $5.3 billion between 2012 and 2022 , according to city budget documents. Silverstein also estimated what the city pays for civilian employee pensions, estimating during the same period, the city has paid more than $330 million to the Municipal Employees’ Annuity and Benefit Fund for CPD employees.
Benefits are also a significant cost driver in “finance general.” Silverstein similarly reverse-engineered an estimate of how much the city pays for CPD benefits — including premiums, insurance claims, deferred compensation, and disability and line of duty deaths — based on the department’s head count. He found the city had paid more than $2 billion in such benefits between 2012 and 2022 .
And the city does not include the cost of CPD’s fleet of vehicles, or the cost of building maintenance and utilities, in its police budget — it’s instead managed by the Department of Assets and Information Services. Silverstein obtained cost estimates for various police stations and CPD headquarters, utilities and vehicle repair costs between 2017 and 2019 and adjusted them for previous years based on inflation. Together, he estimates they have cost the city more than $30 million per year .
Other large cities Silverstein’s looked at, such as Los Angeles, Houston and Phoenix, include the cost of pensions and employee benefits in their police budgets, the analysis notes. While New York City doesn’t include pension and retirement costs in its police budget, spending on building services, natural gas and electricity, and vehicle fuel and maintenance is reflected in NYPD’s budget. Houston includes fleet services; Los Angeles budgets for water and electricity, building services and bond interest and redemption. Phoenix’s budget notes out services provided to its Police Department from nearly two dozen other departments.
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Msall and Silverstein credit Lightfoot’s administration with certain budget improvements, including moving the cost of legal settlements and judgments into CPD’s budget, and for better budgeting on settlements and overtime.
Even with those improvements, though, both have still been over-budget in recent years.
The city paid out $639 million in police-related judgments and settlements between 2012 and the end of 2021, but only budgeted for $329 million in that span . It went over budget every year except 2020, when courts were largely shut down because of the pandemic.
Between 2012 and 2021, the city also budgeted for roughly $720 million in CPD overtime, but spent about $1.2 billion . If current trends continue, the department is on pace “to overspend its 2022 overtime budget by $65 million,” as well, Silverstein’s analysis says.
Ald. Maria Hadden, 49th, whose work before joining the City Council included heading up participatory budgeting projects, said the report is “definitely food for thought,” especially given disagreements that have bubbled up over the current police budget.
“It’s concerning to me to know that if we have costs broken out in this way, when we already have concerns about (police) staffing management, overtime or settlements, if we’re looking at these numbers broken down in this way, maybe we’d have different decision making,” Hadden told the Tribune.
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The city would benefit if it took up a similar exercise for every department, she said, because current budgeting practices “don’t paint the whole picture.”
Cara Hendrickson, executive director of the good government group BPI, said, “This report, the city’s budget overall, should really be causing Chicagoans to ask whether their money is being spent effectively to promote public safety.”
Hendrickson said the report raised questions about cost controls and budget transparency overall. She pointed out that “a number of technology contracts that the city uses, like ShotSpotter, are expenses that are included under the Office of Public Safety Administration rather than in the CPD budget,” reducing the Police Department’s budget and also making it “harder for communities who may be concerned about surveillance or the use of technology like ShotSpotter from analyzing how those tax dollars are being spent by the department.”
Aldermen are expected to take the final vote Monday.
