Chicago is in the red.
Deep red.
Mayor Daley's top budget officials said today that the city will face a $654 million budget shortfall next year.
"It's a large gap, our revenues are flat," said Pete Scales from Chicago's Budget office. "We have yet to see any improvement."
Weak tax revenue figures, increased pay for city workers, lawsuits and contract settlements hurt the bottom line.
Scales said that the city has not ruled out layoffs as a possible salve.
"It's a significant challenge," he said. "[We'll be] sitting down with the unions to ask what they can do after June 30th."
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The city faced a similar situation last year, but Daley closed the gap by grabbing money from a number of different long-term funds, including $102 million from a rainy-day fund created when the city sold its rights to parking meter revenue and took another $270 million from a different parking meter fund.
When the city finally closed its books on the 2009 fiscal year they had just $2.7 million in reserve, which is more than the roughly $200,000 they had at the end of 2008, which is a step forward. This year, however, Daley may not have the luxury of tapping the parking meter funds because only about $223 million remain from its sale.
