Mayor Richard M. Daley said that he will not propose an increase in property taxes in next year's budget and said he has asked his staff to implement new management improvements and to continue to review the way government structured so that City government works even better for people.
“We're at a critical point in Chicago, where the decisions we make about Chicago's future are more important than ever. Either we continue to transform our economy, improve our schools and reshape government so that Chicago works better for everyone, or we risk falling behind. I will not let that happen,” Daley said in remarks before the City Club of Chicago at the University Club, 76 East Monroe St.
“We have an ongoing obligation to our taxpayers to make government more efficient and accountable and to do more with less. And, of course, we've got to make sure that government is affordable for people,” Daley said.
“To protect our homeowners and taxpayers, I want to announce today that I will not propose an increase in property taxes in next year's budget. People are hurting and I don't want to add to their burden,” he said.
Daley said the City is seeing some increases in revenues, but not enough to conclude that an economic recovery has taken hold in Chicago.
He said that at this point in the budget process, other increases and service cuts are still on the table to balance next year's budget -- primarily because the City doesn’t yet fully understand how much the economy and our revenues will improve.
“But, I assure you that should it come to this, that it will be only as a last resort.
I know that we can't balance the budget through better management alone, but we can lessen people's pain in terms of possible service cuts and revenue increases by the steps we take, now, to make government more efficient," he added.
Daley devoted the major portion of his remarks to outlining ways the City will meet the challenge of better managing government and protecting taxpayers, especially in difficult economic times.
“It frustrates me that so many elected leaders across the nation turn as a first resort to tax increases and services cuts as a way of dealing with slower revenues. I believe there's a better way and that is to put better management of government first and to only raise taxes and reduce services as a last resort,” he said.
The Mayor said that to achieve that goal, he has challenged his staff to develop an updated spending plan for the next several years that focuses on three areas -- cutting the cost of government, better managing our resources for greater efficiency and transforming its structure to maximize tax dollars and better respond to people's needs.
He outlined some of the steps he is taking, making it clear that more steps will be announced in the coming weeks and months:
Controlling and Cutting the Cost of Government
- He has ordered that a one-year hold be placed on some city beautification efforts, including tree planting and some other annual beautification projects. The step will save about $4 million.
“This is a difficult decision for me to make. Keeping Chicago looking good is important to many people and it improves the quality of life in our neighborhoods, but we're facing a tight budget and we must set our priorities,” he said.
- The City has begun to consolidate leased city space at a number of locations, including the DePaul Center, resulting in savings approaching $5 million.
- The Department of General Services is conducting a broader Space Utilization Audit, the purpose of which is to maximize the use of City-owned space, eliminate unnecessary leased space, and consolidate existing space to correspond with current staffing levels.
- As a result of its recent audit of heath care charges, the City has been able to save $9 million in health care costs.
- The City has just negotiated the city's and sister agencies’ pharmaceutical contract to Caremark with provisions that will save the City $12 million alone. City sister agencies will also save millions of dollars.
- The City has already cut non-safety and non-personnel spending across the board by another 6 percent and implemented a wide variety of other efficiencies such as reducing use of rented vehicles to save $1.7 million, locking in $8 million in natural gas savings, and utilizing the lower-cost Build America bonds to save $2.8 million in debt service payments.
- It has asked vendors to accept a 10 percent cut in the value of their contracts.
- Daley also has ordered a comprehensive management review of the Chicago Police Department and an audit of healthcare benefits.
- Most union and all non-union employees are taking pay cuts of more than 9 percent through furlough days this year, as is the Mayor, who led the way.
Transforming and Reshaping Government
“Transforming the structure of government so that it works better for people is especially important. I know there are more ways we can eliminate duplication, especially in on the administrative side and by better coordinating our planning and service delivery,” Daley said.
- He has ordered his staff to continue its review of the way government is structured with the goal of better providing needed services more efficiently, with less overlap and with fewer departments.
The city has already reduced -- by five -- the number of its departments by consolidating functions.
As examples, Daley said he has told staff to consider consolidating all of the city's inspections into one department and to find a way to consolidate the City’s neighborhood and business development efforts with land use regulation to enhance coordination and amplify economic development work.
And he has directed staff to look at ways to reduce and consolidate some of the City’s internal service departments to reduce the cost of administration.
- He has ordered the consolidation of the city's public safety technology function, which currently has 51 positions associated with it.
- The City will centralize invoice payment in the Department of Finance, instead of performing the function in the separate departments.
- The City will look to make use of advancing technologies to improve the quality and efficiency of city services.
Better, More Responsive Government
Beginning soon, the City will expand information that is posted online so potential homebuyers can learn more about developers and contractors in Chicago who have been taken to court or had their licenses revoked for improper residential building activities.
- To support efforts toward better budget management, the City has partnered with McKinsey Consulting, which is advising on how to eliminate Chicago’s structural deficit.
Daley said that since he has been Mayor, he has delivered on his commitment to make government smaller in size but greater in performance.
“Managing government better is something I've taken seriously in the past and will continue to do in the future. I want government to work better for people,” Daley said.
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