What will Trump’s sanctuary city threat cost Chicago?

Does Chicago stand to lose $1.3 billion from Donald Trump’s threat to pull federal money from so-called “sanctuary cities”? Or $78 million? Or nothing at all?

The president-elect’s signature issue — a crackdown on immigration — includes a pledge to end all federal funding for cities that don’t cooperate with federal agencies to enforce immigration laws. Chicago and many other immigrant-heavy cities have long made a refusal to do so part of their official policies, on the grounds that it would break trust between law enforcement and immigrant communities. Most of those cities, including Chicago, have suggested that they won’t back down under pressure from a Trump administration.


But exactly what that means for Chicago is more of a legal — and political — question than an accounting one. And it means that, depending on how courts rule, Trump’s threat may be a crushing hit to the budget — or an unfortunate setback that the city can overcome relatively easily.

That’s because the president’s authority to cut off funds for lack of compliance with federal law is constrained by the Constitution — but in ways that are ambiguous and up for debate. Based on conversations with experts in constitutional law and published legal opinions, CTBA has put together a kind of timeline of what a Trump Administration crackdown on sanctuary cities might look like.

1. Trump wants to pull funding — but he needs Congress’ help. William Baude, a law professor at the University of Chicago Law School, says most experts agree that the feds can’t just decide to take away money from local governments if they don’t follow a particular policy. Rather, that condition needs to be made clear in the law that grants the money. That means Trump can’t just make an executive order on his first day in office: he needs to get a law passed by Congress.

2. Congress tries to cancel all funding — but is it “germane”? Let’s say Congress passes a law tying all federal funding to compliance with immigration laws. For Chicago, that means $1.33 billion in 2017 — nearly 14 percent of the city’s $9.81 billion budget, and a crippling blow.

But here’s where things get tricky. Some legal scholars argue that such a law would likely be unconstitutional, because courts have ruled that conditions put on federal funding must be “germane” to the funding’s original purpose: that is, you can’t put strings on a particular federal grant if they have nothing to do with what the grant pays for.

In the most limited view, that probably means Trump could only pull funding related to immigration and law enforcement. If the Supreme Court ruled in this way, a CTBA review of federal grants to Chicago suggests the city would lose about $78 million in 2017, or less than one percent of the city’s budget.

But Baude says that courts could also make a broader interpretation, and say that any money that might eventually benefit undocumented immigrants is fair game. That would cover virtually all public services, and bring us back to the $1.33 billion number. But that brings us to another question.

3. Is it “a gun to Chicago’s head”? Ironically, a Supreme Court case cheered by Republicans — the decision to strike down the Affordable Care Act’s requirement that states expand their Medicaid programs or risk losing federal money — could pose a problem for Trump’s effort to do something similar with immigration.

That’s because the Court ruled that the ACA threatened to take away so much money — around 20 percent of state budgets — that it constituted a “gun to the head” of state governments. In other words, it was toocoercive.

If the Supreme Court decides that all federal funding is “germane” to immigration enforcement, it could still decide that a $1.33 billion cut to Chicago’s budget was an unconstitutionally harsh threat. But that’s far from certain. For one thing, the federal funding at stake here is 14 percent of Chicago’s budget, as opposed to 20 percent in the ACA case. There are other complicating factors as well. And if it did rule that $1.33 billion was too much, it might simply cut down the number to some more “reasonable” level — potentially hundreds of millions of dollars a year, still a substantial blow.

In conclusion, if Trump does follow through on his pledge and can convince Congress to back him, CTBA believes that Chicago would stand to lose anywhere between $78 million and $1.33 billion in 2017. That’s obviously a huge range: on the low end, a serious budget shortfall, but one smaller than many of the tax and fee increases the city has recently implemented to shore up its pension system. On the high end, it’s a truly devastating blow that would require unthinkable combinations of service cuts and revenue increases.

Another important piece of the puzzle is Chicago’s so-called “sister agencies”: governmental bodies like Chicago Public Schools, or the Chicago Housing Authority, which are not legally part of the City of Chicago but which are in many cases governed by boards appointed by the mayor. These agencies obviously provide hugely important public services to city residents, and in many cases receive significant federal funding. Experts we spoke to were unsure of whether they would be vulnerable to punishment under a Trump crackdown. Stanford law professor Michael McConnell said he “could imagine courts upholding the revocation of grants to municipal law enforcement, but not to schools.” But William Baude thinks it’s not out of the question.

It’s clear that the new administration’s sanctuary city threat is a serious one for Chicago. But it’s important to understand what the federal government is permitted to do, what it is not, and what the grey areas are. In all likelihood, any law passed by Congress attempting to remove federal funding from sanctuary cities will be litigated for years — and it will be the result of that litigation that determines how badly Chicago will be hurt.

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