RESOLVING THE LEDGER
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City Treasurer Melissa Conyears-Ervin wants to disband a fund created a decade ago to jump-start development in South and West Side neighborhoods, and use the remaining $57 million to prevent the city’s midyear budget shortfall from triggering police and fire department layoffs.
Even before confronting the $1 billion hole in next year’s budget, Chicago faces a $90 million midyear shortfall after alternative revenue approved over Mayor Brandon Johnson’s objections fell short.
Before resigning their jobs in rapid-fire succession, Budget Director Annette Guzman and Chief Financial Officer Steven Mahr warned of employee layoffs and pulled back on their commitment to make the second half of a $260 million advance pension payment at the center of the budget battle.
Now, Conyears-Ervin has a plan to eliminate more than half of this the midyear shortfall without laying off police officers and firefighters: Abolish the $57 million “Catalyst Fund” created by onetime Mayor Rahm Emanuel.
“The city is at a moment where we’re facing an over $90 million deficit. Responsible leadership … means being able to shift. It means recognizing when we need to address what is happening right now,” Conyears-Ervin told the Chicago Sun-Times. “And in this moment, we need to save city services of our police officers, of our firefighters. Residents do not want to hear that police officers and firefighters are going to be laid off.”
Then-Mayor Rahm Emanuel's 2017 budget included a $100 million "Catalyst Fund" to bridge the funding gap between Chicago's thriving Downtown and other neighborhoods. Then-City Treasurer Kurt Summers assured a skeptical City Council that the $100 million in seed money would be matched by “three times” that much in outside capital.
He said a seven-member board that included the treasurer would select private managers who would be required to invest the money in low-income neighborhoods and census tracts covered by the Community Reinvestment Act.
One year later, the Catalyst Fund still had not launched, and board members had not been appointed. Summers proposed that $57 million in excess “portfolio earnings" generated by his office be used to stop violence on Chicago streets — via investing in long-neglected inner-city neighborhoods.
Still, the Catalyst Fund went nowhere until the pandemic, when then-Mayor Lori Lightfoot forged a partnership with Conyears-Ervin and used the money to provide loans to small businesses fighting for survival.
Although the Catalyst Fund never lived up to its promise of attracting private investment, Conyears-Ervin said, “We did revive it.”
“We were able to help 762 small businesses … keep their doors open, keep employees in our community working during the pandemic. That was definitely an impact we were able to make, and it was a social impact that was necessary at that time. The loans have now been repaid in full,” she said. “Right now, I have identified that the greater need is to stave off layoffs for police officers and firefighters and other essential workers."
The Catalyst Fund was created by City Council ordinance, and only the City Council can disband the fund. Conyears-Ervin would only say that there “will be an ordinance drafted internally” and that she is working to determine who would introduce it.
“City Council members, I’m sure, would appreciate receiving $57 million toward the over $90 million deficit,” said the treasurer, whose husband is Budget Committee Chair Jason Ervin (28th), Johnson’s most powerful ally.
Summers could not be reached for comment. Conyears-Ervin's plan to abolish the fund was first reported by Illinois Playbook. Johnson's office had no immediate comment on the treasurer's proposal.
If he seeks reelection, Johnson could end up avoiding any kind of retreat from his signature promise to pump sorely needed capital into the South and West Side communities he has championed.
But Conyears-Ervin said, "South and West Side neighborhoods also do not want you to lay off police officers in our communities [where] we know and recognize the need for — as well as firefighters and other essential workers."
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