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Mayor Emanuel says city’s budget deficit cut in half

Mayor Rahm Emanuel met with employees Braintree 111 N. Canal St. discussed job growth city’s “technology economy.” He answered reporters

Mayor Rahm Emanuel met with employees of Braintree, 111 N. Canal St., and discussed job growth and the city’s “technology economy.” He answered reporters questions with Founder Bryan Johnson. | Rich Hein~Sun-Times

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Updated: September 1, 2012 6:09AM

Chicago is facing a $369 million budget gap in 2013 — less than half the budget abyss forecast a year ago — thanks to Mayor Rahm Emanuel’s aggressive efforts to cut costs and dun deadbeats, officials said Monday.

Normally, City Hall exaggerates the size of the budget shortfall whenever it’s negotiating new contracts with police officers, firefighters and other unionized city employees to strengthen its hand at the bargaining table.

This year, Emanuel has flipped the political script.

His preliminary 2013 budget forecasts a $369 million hole — less than half the $741 million gap predicted by the mayor’s own budget team a year ago.

More than 500 layoffs, aggressive debt collection, a “wellness program” to reduce skyrocketing health care costs, police station closings and the switch to a grid system for collecting garbage all contributed to the improving financial picture, officials said.

As he did last year, Emanuel has ruled out raising property taxes or the city’s sales tax.

The deficit will rise to $466 million in 2014 and $580 million in 2015 without fundamental changes in the way the city does business and the services it delivers, according to the three-year financial plan expected to be released Tuesday.

“What could have been a deficit….north of $700 [million]—we’ve cut it in half,” Emanuel said Monday.

“That’s through the hard decisions we made, the tough decisions to re-invent, re-think how we as a government operate. But our work is not done. While we’ve done that and I’m proud of that, we’re only one year into a process of…really changing it.”

Fraternal Order of Police President Mike Shields and Tom Ryan, president of the Chicago Firefighters Union Local 2, refused to predict whether the shrinking shortfall would strengthen their efforts to stave off cost-cutting concessions.

Ald. Pat O’Connor (40th), the mayor’s City Council floor leader, argued that the rosier-than-expected forecast should have no impact on police and fire talks.

“Without police and fire being part of the solution, we can’t get there — no matter how creative we are or how successful we are with the rest of the workforce,” O’Connor said.

“Police and fire unions are normally exempt from cost-saving measures but we just can’t afford it. You can’t take the biggest part of your budget and pretend it doesn’t exist when you’re looking for savings.”

Civic Federation President Laurence Msall noted that the city is “far from out of the financial woods.” There’s still no negotiated plan to solve a pension crisis that would require property taxes to double by 2015 without changes in both retirement benefits and employee contributions, he said.

“No one should be taking this as a sign that the city has untapped sources of money for extraordinary increases or that the city’s long-term financial health has stabilized,” Msall said.

“Police and fire work rules and contracts still contribute significantly to the city’s costs. In the Fire Department in particular, they must modernize staffing so it relates to hard evidence of need — not historical political decision-making.”

Former Mayor Richard M. Daley postponed Chicago’s day of reckoning by balancing his final budget with $330 million in Skyway and parking meters reserves and other short-term fixes. That left just $76 million remaining from the 75-year, $1.15 billion deal that privatized Chicago parking meters.

Nearly one year ago to the day, Emanuel vowed to make the tough choices Chicago had avoided for a decade — without raising taxes, cutting police or using one-time revenues — to erase a $635.7 million budget shortfall that, he claimed, would rise to $790 million by 2014.

His $6.3 billion 2012 budget was subsequently balanced with $220 million in taxes, fines and fees and 535 layoffs.

It doubled water and sewer rates over the next four years, locked in annual cost of living increases after that and raised city sticker fees by $10-to-$15, also followed by annual inflationary increases.

By a 50-to-0 vote, the City Council also agreed to raise the city’s hotel tax, imposed a $2-a-weekday hike in parking taxes ­— billed as a congestion fee, even though it’s confined neither to rush periods nor congested downtown and River North areas — and hiked a laundry list of criminal, nuisance and parking fines.

Despite concern about the perception of public safety, aldermen also signed off on the mayor’s plan to close the three district police stations and eliminate 1,252 police vacancies to save $82 million.

This year, O’Connor said, “All of those things would be on the table — with the exception perhaps of a property tax hike, which I have heard no discussion about. But, everything else is on the table. We’re looking at places where it makes sense to raise revenue and, more importantly, cut expenses.”

Ryan has characterized the city’s initial demand from firefighters as “horrendous,” “insulting,” and “ridiculous.”

It takes aim at such treasured union perks as: holiday and duty availability pay; clothing allowance; pay grades; premium pay; non-duty lay-up coverage; the physical fitness incentive and the 7 percent premium paid to cross-trained firefighter paramedics.

The mayor also wants to alter the minimum manning requirement that triggered the bitter 1980 firefighters strike. Instead of requiring every piece of fire apparatus to be staffed by at least five employees, Emanuel’s plan calls for all “double houses” that include both engines and trucks to be staffed by nine firefighters.

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