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| Economy |
| Chicago facing $654.7m budget shortfall, aldermen told |
| 2010-08-01 |
| Chicago's hereditary 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. |
| Posted by:Fred |
| #4 $655 Million? That's like double the annual national budget of Nowhereistan or something isn't it? Or was that Wyoming. |
| Posted by: Whiskey Mike 2010-08-01 18:07 |
| #3 It's the Chicago (and Washington) way to break the bank. |
| Posted by: JohnQC 2010-08-01 10:34 |
| #2 Chicago endemic graft lords facing $654.7m budget shortfall, aldermen told FIFY |
| Posted by: Procopius2k 2010-08-01 07:42 |
| #1 $655 million? That's chump change to the federal government. They could pay that and not even notice that. So all Hizzoner has to do is explain to The One about some things he knows that would be very embarrassing if they came out. Obama tells Rahm to release some money from petty cash, and the problem is solved. It won't work for other cities because Obama is not from there. |
| Posted by: Rambler in Virginia 2010-08-01 00:19 |