Rahm on spending: ‘Day of reckoning has arrived’
BY FRAN SPIELMAN City Hall Reporter fspielman@suntimes.com February 8, 2011 3:28PM
Mayoral hopeful Rahm Emanuel greets Threadless CEO Tom Ryan (right) before outlining his plan to slash city spending during a news conference Tuesday at the T-shirt designer, 1260 W. Madison. | Jean Lachat~Sun-Times
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Updated: May 24, 2011 5:05AM
Mayoral hopeful Rahm Emanuel vowed Tuesday to cut city spending by $75 million in 2011 — long before the next mayor presents his first budget — to begin to tackle a structural deficit approaching $1 billion-a-year, including under-funded pensions.
“The day of reckoning has arrived. ... Denial is not a long-term strategy. ... We can’t wait until the 2012 budget to begin reforming city government,” Emanuel said.
“We need to get a handle on Chicago’s structural deficit. We can’t continue to spend money that we don’t have. We all know that the city’s current budget was balanced through one-time fixes and stop-gap measures. It relied on reserve funds and federal stimulus dollars that are no longer there.”
Emanuel’s plan to create jobs and solve the city’s financial crisis is one of three major addresses Emanuel has delivered during the mayoral campaign.
But the speech delivered at a Near West Side T-shirt company raised more questions than it answered.
Aside from an immediate spending freeze, following by giving city department heads 60 days to draft plans to cut spending, there was precious little new information.
Emanuel talked about creating so-called “charter” city departments that minimize “bureaucratic interference” and give commissioners “flexibility to achieve programmatic goals in innovative ways.” But, he never really explained what that means.
For the most part, the former White House chief-of-staff simply rehashed the proposals he has previously unveiled to save $500 million.
They include: reforming tax-increment-financing districts ($50 million); implementing an employee wellness program ($60 million); overhauling garbage collection ($65 million); streamlining bureaucracy ($110 million); measuring and driving performance ($40 million); reforming contracting ($20 million); bolstering collections ($20 million); improving grant management ($30 million) and establishing public-private partnerships ($30 million).
To create sorely-needed jobs, Emanuel vowed to streamline business regulation now spread over eleven city departments and create a technology campus similar to the one that Mayor Daley has proposed on the 37-acre campus that once housed Michael Reese Hospital.
He wants to create a pair of $15 million funds — one to assist manufacturers, the other to help small business. And Emanuel promised to modernize Chicago’s Regional Port District, eliminate the $4-a-month employee head tax and overhaul job training programs to establish “clear performance metrics and direct links to real jobs, employers and future job growth.”
Daley’s final budget was balanced without raising taxes with a trick bag of one-shot revenues that included draining all but $76 million from the 75-year, $1.15 billion deal that privatized Chicago parking meters.
The city’s finances are so precarious, the Daley administration is borrowing $254 million to cover back pay raises long anticipated for police officers and firefighters.
Emanuel has encountered strong opposition from organized labor for suggesting that benefits of existing employees would have to be cut to help solve the city’s pension crisis.
On Tuesday, he soft-pedaled those remarks, saying only that he would work with organized labor to craft a solution that includes shared sacrifice.
“There’s two options if you do nothing: Within the decade, the pensions begin to run out of money and can’t pay their obligations. Or you have to raise property taxes by 90 percent — and I won’t do that,” Emanuel said.
“So, you have to come from a cooperative basis. ... One, I want to preserve the pensions. Two, we’re gonna do this on a cooperative basis. ... Collective. You do it together.”
