Fact-Checking Mayor Daley's Budget Address | Bleader

Wednesday, October 21, 2009

Fact-Checking Mayor Daley's Budget Address

Posted By on 10.21.09 at 02:53 PM

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As predicted, Mayor Richard M. Daley proposed a $6.1 billion budget this morning that would be balanced by cutting city jobs, slowing services, and dipping deeper by hundreds of millions of dollars into the pot of money generated by leasing the parking meter system.

Most aldermen I spoke with after the mayor’s somber, half-hour budget address said they didn’t like the idea of using the meter reserve funds, but they bought the mayor’s argument that it was the only viable way to maintain core city functions like policing and garbage collection without a major tax hike.

“It’s a shame we have to borrow from the long-term funds, but we’re getting down to a bare-bones budget and people don’t want to see services cut,” said Tenth Ward alderman John Pope, who predicted that city department heads would be hit with tough questioning from aldermen when public budget hearings start next Wednesday: “Don’t just tell me we’re doing more with less,” he said. “Let me know how much longer it’s going to take to get a new garbage can or to change street lights that are out.”

Let’s hope he’s right about the vigorous questioning, because the mayor himself wasn’t accurate or honest about several of the claims he made in his speech today. Here are a few examples:

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DALEY SAID: “In addition to the $2.5 billion in spending we’ve cut during my administration, last year we cut another $168 million. This year, we’ve already cut over $59 million and in this budget we will cut another $114 million more.”
THE FACT OF THE MATTER: Along the way the Daley administration has made some cuts here and there. But the annual budget has grown by billions during his time in office. In 1991, for instance, the budget was $3.3 billion. This year it was $6 billion, and next year the mayor is proposing that it grow to $6.1 billion.

DALEY SAID: “In the last ten years, we’ve reduced the number of city employees by more than 6,200 even as we’ve added sworn police officers.”
THE FACT OF THE MATTER: The number of people on the payroll has been cut over the last decade, from 39,500 in 2000 to 36,300 as of this month—only about half the number claimed by the mayor. Among the job cuts over the past year and half were more than 400 police officers and detectives, according to payroll records.

DALEY SAID: “To protect taxpayers from misconduct by employees and those who do business with the city, we will strengthen the Office of Compliance.”
THE FACT OF THE MATTER: Daley created this fraud-prevention office in 2007 over objections that it would replicate, if not undermine, the work of the independent Inspector General’s Office and that it would actually add to the city’s budget woes—next year the mayor wants to set aside $4.3 million to run the office. And just a couple weeks ago Michael Shakman, the lawyer who’s waged a decades-long battle to end political hiring and firing in city government, ripped the Office of Compliance for complying with the mayor’s agenda instead of independently rooting out hiring abuse and waste.

DALEY SAID: “To make government even more open and transparent, we will soon put online all current statements reflecting the financial interests of city employees [and] elected and other city officials. We will also put online all members of boards and commissions.”
THE FACT OF THE MATTER: Chicago is years late in posting this sort of basic information about the people hired and appointed to manage the taxpayers’ money, but let’s be fair and offer congrats on finally doing what needs to be done. On the other hand, the city is still barely adhering to the tax increment financing sunshine ordinance passed last spring by the City Council, if it’s complying at all. And as Ben Joravsky and I report in this week’s Reader cover story, the Daley administration has created an entirely separate—and entirely private—budgeting process for the hundreds of millions of dollars it spends in TIF districts. In short, it’s probably accurate to say the city is becoming “more open and transparent,” but that doesn’t mean it’s actually hit the point of being open and transparent.

DALEY SAID: “I propose to eliminate two tax increment financing districts either because they are inactive or they are set to expire anyway. From this the city will receive approximately $8 million.”
THE FACT OF THE MATTER: So that would leave 156 other TIF districts up and running, diverting money that would otherwise end up in the city’s regular coffers as well as those of the CTA, Park District, and other local government agencies. And as we report in this week's story, while the city is “receiving” this $8 million, it’s planning to hand out tens of millions more in the form of corporate subsidies and neighborhood pet projects that aren’t subject to the same council oversight as the regular budget. Some aldermen are grumbling that it's time to dip into the TIF money now sitting in the bank.

DALEY SAID: “Now is not the time to burden people with higher taxes or the elimination of essential city services. So I believe it is responsible to borrow from the [parking meter] reserves. As the economy recovers, and after city revenues return to more normal levels, we plan to replenish it.” Specifically, the mayor proposed using $270 million of the $400 million long-term meter reserves to cover the 2010 budget.
THE FACT OF THE MATTER: If you recall, one of the city’s chief arguments in favor of leasing out the parking meter system for 75 years was that it would generate all sorts of up-front cash, some of which the city could use now and some of which it could save for later. In particular, city budget officials said they would put $400 million of the $1.2 billion meter payout into a bank account that would draw 5 percent interest, yielding payments of at least $20 million a year, roughly what the city had been bringing in from the meter system before it was privatized. Count us among the skeptics who wondered if it was reasonable to expect the city to get 5 percent in these economic times. But even if it does, the reserve won’t generate anywhere close to $20 million a year if, as Daley proposed today, it’s reduced to $130 million—instead the figure would be $6.5 million. That creates an automatic $13.5 million revenue shortfall for 2011 and every year thereafter, until and unless the city is suddenly able to come up with an extra $270 million to replenish the reserves.

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