Panel
City CFOs Report from the Frontlines of Public Finance
- Chicago projects achieving structural budget balance by 2023 following pension adjustments in the 2022 budget while maintaining pre-pandemic tax competitiveness.
- The city anticipates continued growth in its tech sector supported by computer lease revenues and expects a "flight to quality" toward Class A office space alongside adaptive reuse of Class B properties.
- Chicago is closely monitoring recovery trajectories for lagging revenues including work-from-home effective taxes, rideshare, utility taxes, and tourism sectors, aligning with Fitch and S&P state/national trends.
- A formalized Enterprise Risk Management process and enhanced employee cyber security training are planned to support risk factors arising from expected cyber security incidents.
- Dallas sales taxes are projected to remain elevated following a June 2021 surge driven by stimulus, e-commerce, and inflation, with a re-forecast scheduled with the city economist.
- Significant in-migration of businesses and corporations is expected in Dallas, which plans to leverage federal infrastructure bill funding for transformational projects in transportation, water, broadband, and climate resilience.
- Dallas commercial real estate markets anticipate residential vacancy rates of 5.7 percent at year-end 2021 and a continued decline in office vacancy rates, with downtown in-person occupancy expected between 45 and 55 percent.
- The City and County of Denver faces uncertainty regarding return-to-work trends, necessitating flexible downtown strategies and increased focus on residential viability along the 16th Street Mall corridor.
- Denver property transactions are expected to maintain pre-pandemic price points, though future downtown real estate activity remains undetermined for the coming quarters.
- Chicago intends to allocate approximately $400 million in its 2022 recovery plan to address public safety through community safety investments.
- Denver, Dallas, and Chicago all anticipate increased spending on public safety, with Denver focusing on personnel for emergency response and front-counter support, while Dallas and Chicago also emphasize behavioral health crisis teams and law enforcement to sustain crime reductions.
- Dallas plans to establish a regional cyber threat center for information sharing and anticipates potential shifts to self-insurance due to rising cyber insurance premiums and stricter controls.
- Both cities face long-term infrastructure and security funding challenges, with Dallas expecting to require budget planning for cybersecurity expenses after federal infrastructure funding concludes in approximately five years.
- Chicago and Denver intend to monitor inflation closely on the expense side and stress-test secondary systems for payroll and vendor payments respectively to address inevitable cyber security incidents.