Rahm Emanuel promises no tax hikes or police cuts in face of budget crisis
By FRAN SPIELMAN City Hall Reporter firstname.lastname@example.org July 29, 2011 11:02AM
City Council Budget Chairman Alderman Carrie M. Austin, joins Mayor Rahm Emanuel during 2012 Budget Projections City Hall Press Conference, Friday, July 29, 2011. | John H. White~Sun-Times.
BUDGET CRISIS BY THE NUMBERS
2012 SHORTFALL: $635.7 million
WORST CASE 2014 SHORTFALL: $790.7 million
OVERALL CITY DEBT: $19 billion
AVERAGE 2010 ANNUAL CITY WORKER SALARY: $74,700 ($91,000 with benefits)
TOTAL 2011 WASTE DISPOSAL COST: $465.5 million
RESERVES LEFT FROM SALE OF CITY ASSETS: $624 million
TOTAL 2010 OVERTIME SPENDING: $82 million (down from $124 million in 2007)
ANNUAL COST TO SUPPORT RED LIGHT CAMERAS: $18.1 million
Updated: November 2, 2011 12:45AM
Mayor Rahm Emanuel vowed Friday to make the tough choices Chicago has avoided for a decade — without raising taxes, cutting police or using one-time revenues — to erase a $635.7 million budget shortfall that will rise to $790 million by 2014.
“We have come to that moment of truth as a city. We now must make the tough choices to deal with that [in] a structural and fundamental way,” Emanuel said.
The bleak outlook in the new mayor’s preliminary 2012 budget and three-year financial forecast will require fundamental changes in the way the city delivers services and elimination of other functions.
Ald. Robert Fioretti (2nd) went so far as to suggest that the city start picking up garbage every ten days, instead of every seven.
“It’s not two weeks. It’s in between. It extends it three more days. People will get used to it and understand that fundamental change. I don’t think it would impact that much,” Fioretti said.
Ald. Pat O’Connor (40th), the mayor’s City Council floor leader, said he, too, is open to discussing an “extended period” between garbage pick-ups. But, he said, “The question is whether the whole city is ready to do it next year, or whether that change would be a disaster. I’m not sure you can treat the whole city with a one-size fits all. The whole city isn’t recycling.”
At a City Hall news conference Friday, Emanuel talked more about what he will not do than about the rocky road ahead.
He will not raise taxes. He will not cut the number of police officers on the street. And he will not use one-term revenues or other short-term fixes, as former Mayor Richard M. Daley did, to avoid the tough choices any longer.
“The capital I’ll spend will be political capital to make the tough choices that we have to do for the city. The capital I won’t spent is the taxpayers’ dollars and asking them to put more into a system that hasn’t been reformed. This system needs reform. It is calling out for it,” he said.
Without mentioning Daley by name, Emanuel pointed the finger of blame at his predecessor for a decade of deficit spending.
“If you run a deficit in 2001, 2002, 2003, 2004. You get it. All the way to 2011. ... Every year, the city ran a deficit — good times or bad. ... That says to you explicitly, `We have a structural problem and that moment of truth has arrived,” he said.
Pressed for specifics on how he intends to tackle the problem, Emanuel would only talk about more of the “managed competition” that he is about to bring to household recycling.
That means city employees will compete with private contractors to provide essential services such as garbage collection, and whoever offers the best service for the lowest price will get the business.
That’s a concept that the Chicago Federation of Labor appeared to embrace in the report it released earlier this week suggesting $242 million in potential savings.
The mayor’s call for more managed competition was music to the ears of Civic Federation President Laurence Msall.
“Privatization of garbage is something he should be doing. Not stopping at recycling, but moving forward with managed competition to test the notion of whether we need to maintain three workers on a truck vs. the private sector, which operates with just one,” Msall said.
Normally, preliminary budgets are sketchy documents required by law. The level of detail provided by the new administration was unprecedented. So was the fact that Emanuel personally conducted some of the City Council briefings.
Aldermen came away impressed, even though they’re not eager to confront the politically unpopular choices ahead.
“It has the potential to get somewhat ugly,” with organized labor, O’Connor said, noting the Round One stand-off over work-rule changes that has prompted Emanuel to send layoff notices to 620 employees.
Daley postponed Chicago’s day of reckoning — and set Emanuel and the new City Council up for a fall — 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.
The loss of one-time revenues literally accounts for $500 million or 79 percent of the shortfall. Other key factors tied to the revenue decline include Chicago’s loss of 200,000 residents in the 2010 U.S. Census and the change in the formula for distributing state income tax revenues to cities.
Henry Bayer, executive director of AFSCME Council 31 challenged the new mayor to follow the Chicago Federation of Labor blueprint — by “preserving essential city services” and cutting “fat contracts and redundant management” instead.
Picking up on the mayor’s theme, Bayer said in a statement, “Chicago is at a crossroads. Will Mayor Emanuel ensure city services like health care, public safety, education and more are strong, accessible and provided by dedicated frontline employees? Will he cut top-heavy management and clout-heavy contracts and make big corporations pay their fair share of the costs? Or will he continue the Daley legacy of privatization, slashing jobs, and cutting vital services?”