Examining Chicago's Budget Crisis

By Marcus Gilmer in News on Oct 7, 2008 7:30PM

Mayor Daley likes to remind everyone about the current national economic crisis as a way of explaining Chicago's estimated $420 million budget shortfall. But Dan Mihalopoulos at the Chicago Tribune examines four areas in which the Daley administration could save millions of dollars. In short, city employees make a lot of money, the city depends too much on real estate taxes, there are way to many TIF districts, and not enough money is put aside in reserves. No doubt there will be a few readers upset over the omission of the "corruption tax," but at least the Trib's talking about TIFs.

All in all, the analysis shows that the current budget crisis affecting the city is deeply rooted in the way it operates, which can't be easily solved by privatizing city assets like Midway Airport. It's interesting how this plan appeared only a week ago and is being pushed through the city council (albeit slower than Mayor Daley probably wishes). Sure, the deal could bring in about $900 million for infrastructure purposes and around $100 million for the city to use at it pleases, but if Mayor Daley is right and the economy continues to dive, the city's going to need to do some extra heavy lifting (and we don't mean another bottled water tax).

Mayor Daley says he'll announce a new budget plan on October 15 that will cover the city for the next four to five years. While he's mum on the specifics, layoffs certainly appear to be on the table even though most of the cuts will affect two crucial departments—streets and sanitation and the police department. This may seem like a terrible idea considering this year's brutal winter and the increase in crime, but more than 80 percent of the city's funds go to wages and salaries. So it's a good thing some city aldermen just received a pay raise. Let's just hope they put in the extra hours needed to figure out this mess.

By Hunter Clauss