Saturday, July 31, 2010


Chicago facing $654.7 budget shortfall, aldermen told
And things could get even worse to pay for firefighter claims

By FRAN SPIELMAN City Hall Reporter

Mayor Daley has ruled out a pre-election property tax hike — but other tax increases, layoffs and a raid on previously sacred economic development funds are “on the table” — to erase a record $654.7 million budget shortfall that could rise considerably.
"There's nothing off the table, other than the property tax increase," Budget Director Gene Munin said Friday, insisting that spending cuts would come first.
After unveiling the city's $6.3 billion preliminary budget, Munin acknowledged that another raid on parking meter and Chicago Skyway reserves was "not a long-term solution" because revenues generated by the sale of those assets are "finite." But he didn't rule it out.
"We will take a look at that after we look at the expense side, just like we would look at other revenue items," he said.
Under pressure from aldermen, Munin also opened the door to a possibility that Daley had previously foreclosed: declaring a surplus in tax-increment-financing districts — known as TIF districts and used for economic development — and distributing the unallocated revenue to the city and other local government agencies.
That would have the added advantage of easing the budget crisis at the Chicago Public Schools, since schools get 53.5 percent of that money. The city gets just over 20 percent.
Year-end audits show Chicago’s 159 tax-increment financing districts had a collective balance of $1.2 billion on Dec. 31, with all but $37.1 million of that money uncommitted. But Munin insisted that the unallocated figure is more like $700 million.
"There's obviously a price to be paid if you do that," Munin said. "That's an economic development tool. To declare a surplus, distribute it, get the city's share back in a much smaller amount and not be able to build police stations, firehouses and public libraries ... is a serious policy discussion we're gonna have to have."
Ald. Tom Allen (38th) countered, "That's the only logical place to find revenue. There's nowhere else to go. It's a recurring revenue stream. If that causes us to hold off on spending TIF money on building projects, we have to take that step."
Ald. Pat O'Connor (40th), the mayor's unofficial City Council floor leader, agreed that it's time to talk about raiding Daley's favorite piggy bank for economic development projects.
With the February 2011 election fast approaching, the only thing O'Connor would rule out is turning to Chicago taxpayers.
"My belief is that a tax increase [of any kind] would not be entertained under anybody's scenario. People can't afford it," he said.
The Chicago Sun-Times reported last week that the 2011 budget shortfall would approach a record $700 million when the cost of police and fire contracts are factored in, setting the stage for another raid on the parking meter and Skyway reserves.
On Friday, Munin confirmed that grim news during closed-door aldermanic briefings, citing a continuing decline in the real estate transfer tax and other “economically sensitive” revenues.
The shortfall is the highest in Chicago history. But it could rise considerably to expand curbside recycling and resolve claims tied to a landmark ruling by the U.S. Supreme Court on the city's discriminatory handling of a 1995 firefighters entrance exam. The preliminary budget merely anticipates that 130 bypassed black firefighters will be hired. It does not include back pay and benefits for those plaintiffs.
During Friday’s briefings, aldermen also demanded that the city hire more police officers — beyond the 100 new officers the mayor promised.
“This budget is an absolute nightmare. We have a massive structural deficit,” Ald. Brendan Reilly (42nd) said.
“Borrowing [from reserves] and future asset leases are not going to get us out of this problem. We need to make some deep painful cuts this year. We can't afford a 36,000-strong workforce with dramatically declining revenues.”
Reilly suggested something unheard of for City Hall: “zero-based” budgeting. That would force every city department to justify each and every position.
“We’re gonna need to look at getting out of certain types of businesses and focusing on the city's core mission: public safety, infrastructure and economic development. If a department doesn't fit into one of those three boxes, we need to talk about eliminating it,” Reilly said.
Munin acknowledged that the city has reopened discussions with union leaders about another round of furlough days, comp time instead of cash overtime and other concessions. Those agreements, which require the equivalent of 24 annual unpaid furlough days, expire on June 30, 2011.
Over the years, TIFs have become Daley's favorite — and he says only — economic development tool, diverting tens of millions of dollars from the city, Chicago Public Schools and other local taxing districts.
Within the boundaries of a TIF, property taxes are frozen at their current levels for 23 years.
When the value of property increases, the added tax revenue is set aside for infrastructure improvements needed to lure businesses to the area and subsidies for those that agree to come.

I suggest we start cutting at City Hall on the 5th floor. City workers and tax payers have done enough. This ship is top heavy.


  1. I agree; cut from the top for once. The people on the bottom do the work and pay the most. There are still some alderscum that haven't taken furlough days, yet layoffs and days off plague the workers.

    Lay off 20% of the alderman and recover all of their 2.2 million each and place it back into the general fund for starters.

  2. Eliminate half the alderthieves and get rid of their discretionary funds. That would be a huge start. We have too many alderthieves who do not do squat but pose for the cameras.

  3. Too many Aldermen! 10 would be more than adequate to handle city business!

    Too many $100,000 and up department heads and assistants!

    Too many staffers!

    Too many Private Contractors doing un-necessary work (flower planter decorators, grass waterers, weed pickers)!

    Too many black wrought iron fences!

    Enough is enough already!

    We need to bring an un-biased (nobody within the Mayors circle of thieves) professional team of cost cutters and trim the city budget and bloat dramatically.

    We haye probably 5 times more management than is necessary, all sucking the Mayors pp.

    His job privatizing has cost more than if he kept all the original city workers.

    The man has NEVER had a legit working job in his entire life, nor has any of his family. They ALWAYS fed themselves at the political trough or were GIVEN special appointments to corporations for favors rendered.

    Please God, Help us!