Dear Member of the
International Olympic Committee:
|We continue to update you on the state of Chicago's finances. Like most of America, we are running extremely large deficits and have no sensible solution in sight to balance our budget. As life on the ground for our citizens gets worse, people are demanding accountability and new priorities from our city government.
Tax increases, spending cuts or layoffs possible to fill city's $520M budget gap
July 30, 2009 - FRAN SPIELMAN City Hall Reporter
after wringing concessions from organized labor and drying up a "rainy
day" fund created by privatizing parking meters, Chicago has a $519.7
million budget shortfall in 2010 that can only be filled with tax
increases and spending cuts.
"There are no obvious sources of revenue that have not already been tapped," said Civic Federation President Laurence Msall.
"You have to make very severe and structural cuts in the city's
operating budget. City government is going to be forced to re-invent
itself in the way it delivers services and eliminates services not
critical. ... Police and fire have to be part of it."
The shortfall in the city's $6.2 billion preliminary 2010 budget is
the highest in recent memory -- even after Mayor Daley ordered 431
layoffs from two recalcitrant unions and cut a two-year deal with
organized labor that averted the need for nearly 1,100 other firings.
The gaping budget gap caused by declining revenues would have been
bigger without the "rainy day fund" created with proceeds from the
75-year, $1.15 billion lease that privatized Chicago parking meters.
The preliminary budget assumes that $268.7 million of that money
will be used to wipe out this year's budget shortfall and that the
remaining $51.3 million will be exhausted in 2010.
The outlook for taxpayers is bleak. They'll either face higher taxes, dramatically reduced services or both.
Chief Financial Officer Gene Saffold said nothing is ruled out. But,
the mayor has instructed his staff to avoid a property tax increase at
"We understand people are hurting out there. ... The last thing we
want to do ... is to further burden the citizens of Chicago. That's why
that is a last resort -- the last thing that we'll turn to," he said.
The sky-high budget gap comes as the city has asked an independent
arbitrator to dictate a new contract with Chicago Police officers after
more than two years of nowhere bargaining.
Fraternal Order of Police President Mark Donahue accused the city of crying poor-mouth with a purpose.
"Traditionally, initial budget shortfalls are inflated. ... It
wouldn't surprise me that these inflated numbers are being established
to sway an arbitration decision," Donahue said.
Ald. Tom Allen (38th) added, "People are getting tired of hearing
that the sky is falling. There are some signs already that the economy
is leveling off."
Saffold countered, "These are real numbers. ... There's no smoke and mirrors here."
If Daley's numbers turn out to be solid, it could jeopardize the
city's ability to fill 509 police vacancies and to replace as many as
874 additional officers over the next four years who could be lured
into retirement by the city's offer to extend health benefits at age 55
to officers and their dependents.
That's especially true now that Chicago has received only enough
federal stimulus funds to hire 50 officers, down from the 400 officers
the city had hoped to hire.
Donahue acknowledged that he is concerned about a continued slowdown in police hiring.
But, he said, "They recognize the savings between the salaries of
potential retirees and new hires. And they assured us their intent was
to fill those vacancies."