October 13, 2010
As Nation's Recession Continues, Mayor Daley's Balanced 2011 Budget Controls Spending, Continues Needed Services And Provides For The Future
No Tax Increase; Improved Management, Spending Cuts and Use of TIF and Parking Meter Funds Help Balance Budget; $500 Million Skyway Reserve Fund Remains Untapped
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Mayor Richard M. Daley today proposed to the City Council a balanced 2011 budget that makes government more efficient, continues to provide basic services and provides limited new spending to make neighborhoods safer, help grow Chicago’s economy and create new jobs.
“For next year we projected a City deficit of over $654 million, a direct result of the worst national recession in seventy years. The recession caused us to lose more than $1 billion in revenues. The nation's recession is the biggest reason we -- and every other city and state -- continue to face major financial challenges today,” Daley said in remarks delivered in the Council chambers.
“I deeply believe that had we not worked for years to better manage government and control costs and had we not worked day in and day out to transform our economy and create new opportunity, the recession would have been far worse in Chicago,” he said.
Daley said that to balance the budget he will not raise any tax, fee or fine, including property taxes. "I don't believe it's right to raise taxes with the economy as bad as it is," Daley said. This makes three years in a row that Mayor Daley has not raised property taxes.
Daley also said that the budget "holds the line on spending for most programs” and that basic services will continue. “This is not the time to expand government,” he said.
Daley reviewed his record of managing government saying that "we have brought City government into the 21st Century."
The Mayor said that: there are 6,600 fewer non-safety employees than when he took office; that spending has increased by only 18.8 percent since in that time; that he has eliminated ten City departments and that he has increased property taxes by an average of less than 1.3 percent a year during his time in office.
Among many steps to balance the budget Daley said the City will:
- Continue the freeze on non-safety hiring, which has been in effect since 2008, saving an estimated $20 million in 2011.
- Continue to consolidate departments to reduce costs and avoid duplication. It will consolidate the Departments of General Services and Graphics, the Department of Cultural Affairs and the Mayor’s Office of Special Events and the Departments of Community Development and Zoning and Land Use Planning.
- Continue to require that all non-union employees, starting with Mayor Daley, to take 12 furlough days and 12 unpaid holidays, resulting in a cut in pay of 9.2% and an overall savings of $20 million. Similar cuts for union employees are also included for a savings of $32 million.
- Cut 277 budgeted positions from the budget, saving $ 13 million.
- Continue to generate savings from lease renegotiations, contract reductions, locked in lower utility costs, the reduction of custodial services and savings in healthcare costs, among others.
Further, Mayor Daley said that he will declare a surplus of $180 million in more than 20 of the 160 Tax Increment Financing districts across Chicago, which will provide the city with $38 million to help balance the budget. In addition to the new three-year TIF projection reports online, the City has included financial information about all TIF districts in this budget.
Under this TIF proposal, Chicago's public schools will receive a one-time infusion of $90 million to help address their budget challenges.
And in a step Daley said he knows will be “controversial,” he proposes to borrow an additional $120 million from the lease of the City’s parking meters to balance the budget. That will leave $76 million remaining in the parking meter accounts.
The City will maintain its commitment to provide $21 million this year from the parking meter account to support people's needs -- from home meals for seniors, to youth jobs programs and job training for ex-offenders.
“To protect taxpayers, we will not use any funds from the Skyway long-term reserve account to balance next year's budget. This will leave a half billion dollars in that account – a reserve fund that most cities don’t have. We've helped protect Chicago's future with this decision,” Daley said.
Daley reminded Council members that without the asset leases -- which were reached when the recession wasn't in sight that "we would have been forced to raise taxes substantially and eliminate or reduce many services that people depend on."
Daley also said that to encourage job hiring and creation next year's budget will reduce the head tax paid by some employers by raising the employee earnings threshold.
Under Daley's proposal, employers will have to pay the head tax on all employees earning $4,300 per quarter, up from $900 a quarter.
Daley also said that to address Chicago’s pension challenges, he will seek the passage of legislation in Springfield to change the pension system for new police and fire fund employees to bring it in line with similar changes enacted earlier this year for new laborer and municipal fund employees.
The Mayor said the budget puts a priority on finding a way to invest a limited amount of additional money for programs that make neighborhoods safer and help grow the economy and create new jobs.
Daley said the City’s first priority remains to put more police on street duty.
- Next year, the City will invest in and conduct two more police classes, which should add 150-200 new officers to the force -- and to street duty.
"With other steps that have been taken the Police Department will have
assigned more than 800 new officers to street duty in the last two years, a
significant number", Daley said.
- The Police Department will continue to invest in the strategies that have reduced violence in many neighborhoods.
- The City will roll out a reinvented CAPS program that more fully engages neighborhood volunteers.
- And, the City will continue to work in Springfield to enact stronger gun laws, protect children by enforcing the curfew, end gun trafficking and support ex-offenders.
Creating New Jobs:
Daley said the proposed budget will invest in the City’s small businesses and continue to improve neighborhood infrastructure, "which creates the foundation for job and business growth," Daley said.
- The budget creates a new $2 million small business fund -- to be supported by City government and the private sector -- to provide loans for start ups, expansions and day to day operations.
- Chicago’s $1.9 billion capital improvement program for 2011 will again provide funds to invest in a broad range of important projects, including water and sewer improvements, street resurfacing, streetscapes, street lighting, sidewalk, curb and gutter repairs and the ongoing construction of new community anchors like police stations, fire stations and libraries.
Daley concluded his remarks by reflecting on his 21 years in office.
“It sometimes gets lost, but in 1989 when I took office Chicago was a rust belt city that many people had written off. But, you and I knew that Chicago had promise,” he said. The Mayor said that in that time, working with many partners, the City has:
- Moved past the years when race divided the city. "We've lowered our voices and raised our sights and worked together to make Chicago a city where people want to live and businesses want to locate," Daley said.
- Rebuilt, strengthened and further diversified its economy so that today Chicago is among top tier of cities in competition for jobs of the 21st century. "We've recruited the businesses of the future in technology, health care, financial services and transportation and strengthened manufacturing and small business", he said.
- Taken responsibility for educating its children in order to build a workforce with modern skills. "And, today our schools are on the path to become the best in the nation,” he said."
- Invested in every neighborhood and turned around many of them – to improve quality of life and provide them with the infrastructure improvements that are needed to create jobs and opportunity.
"Working together, we've made Chicago a stronger city today and neighborhood quality of life has improved. We've laid the foundation for a hopeful and more optimistic future," Daley concluded.
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