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Daley Budget Called a "Band-Aid on a Bullet Wound"

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But use of one-time revenues to shore up budget postpones city's day of reckoning.

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Mayor Richard Daley on Wednesday morning proposed using one-time revenues to temporarily shore up the city's budget hole, effectively postponing Chicago's day of reckoning.

"Because our people and our businesses are hurting -- and you know that on a personal basis in your own wards -- I will not propose any increase in taxes, fines or fees next year, including property taxes," Daley told aldermen after unveiling his proposed, $6.15 billion budget for 2011.

Collectively and initially, aldermen seemed to embrace the budget, even given Daley a standing ovation following his remarks.  But at least one alderman denounced the proposal, calling it a "Band-Aid on a bullet wound."

"It is a quick fix.  It is a Band-Aid, a Band-Aid on a bullet wound.  You're going to bleed through it, so what you don't do today you're still doing to have to face next year and it gets worse and worse," said Ald. Leslie Hairston (5th).  "We really have not done what is necessary, what is necessary to make sure that we have cut in every cut that which we need to cut."

Other reactions from aldermen:

"I would have liked to have seen a little more honest talk about the fact that we do have this ongoing structural deficit which really cannot be resolved without really doing something other than coming up with these quick fix, one-time solutions," said Ald. Joe Moore (49th).

He called for the creation of an "Independent Budget Office," similar to what New York City employs.

"We have serious, serious structural problems here, but they require some long-term planning as well as some long-term solutions, so I don't know how you can do it in today's document in the next seven months," said Ald. Freddrenna Lyle (6th).

"There’s no simple solutions to these problems," said Ald. Edward Burke (14th). "I think we’re down to about the bone now in terms of reducing expenditures and there’s no viable source of increasing revenues.

Ald. Walter Burnett called Daley's budget "very considerate in a lot of areas," but said there was more work to be done.

"I still don't understand why we can't utilize TIF dollars to acquire foreclosed properties and put them back on the tax rolls," he said.

Unofficial mayoral candidate Rahm Emanuel called it a "moment of truth for the city of Chicago."

    We can no longer deny that we are living beyond our means.   We must go beyond the temporary fixes to confront our structural deficit in a permanent way.  While this budget may achieve its goal for this year, this cannot be a model for the long term.  We can't keep doing the same thing and expecting a new result.

Emanuel called for a "top-to-bottom review of how taxpayer dollars are spent," including a review of Tax Incremental Funding programs "to determine whether they are achieving their goals."

Highlights of Daley's budget include:

  • Holding the line on property tax increases, fees and fines.  No new taxes, fees and fines proposed...
  • Raiding reserves generated by the Chicago Skyway and parking-meter leases...
  • Siphoning $180 million in "surplus" funds generated by TIF districts...
  • Saving $142 million by refinancing old borrowing in a way that will extend debt payments to another generation of taxpayers...
  • Reapproaching union officials to ask for more concessions, including furlough days, potentially saving $20 million...
  • Continuing a freeze on non-safety hiring, saving an estimated $20 million...
  • Cutting 277 budgeted positions, including 60 managers, supervisors and IT personnel, saving an estimated $13 million...
  • Further consolidating six departments into three...
  • Privatizing some city services, like recycling, equipment maintenance, and festival management -- including the Taste of Chicago...
  • Offering a suprise concession to business by raising the income level for the head tax to those employees earning $4,300 per quarter, up from $900 per quarter... 


Bond rating agencies aren't thrilled the idea of raiding reserve funds. Two major bond rating agencies have already lowered Chicago's rating because the city relies on one-time revenue sources to fill in the holes. The plan to draw down reserves won't be the only bitter pill to swallow.

And what was supposed to be a popular proposal, a plan to add 200 police officers to the city streets -- a plan Daley announced in advance of his budget -- is already drawing skepticism.

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