How Do You Solve a Problem Like Chicago?

by Amanda Griffin-Johnson Earlier this week, Chicago’s Inspector General (IGO) released the second annual “Budget Options” report featuring 63 options for the city to cut costs or raise revenues. While the ideas range from low-hanging fruit to political non-starters, the report highlights the severity of the fiscal difficulties the city is facing with personnel costs and...

by Amanda Griffin-Johnson

Earlier this week, Chicago’s Inspector General (IGO) released the second annual “Budget Options” report featuring 63 options for the city to cut costs or raise revenues. While the ideas range from low-hanging fruit to political non-starters, the report highlights the severity of the fiscal difficulties the city is facing with personnel costs and debt service obligations driving the budget’s growth.

Source: City of Chicago Office of the Inspector General

In total, the report includes nineteen revenue options totaling nearly $2.2 billion including changes to sales, transportation and recreation taxes. Some of the more contentious ideas, such as creating a city income tax, were written off by the mayor and city council. But not all new taxes were dismissed so quickly. The Chicago Tribune reported:

There was plenty of discussion at City Hall. Several aldermen winked at the idea of a so-called commuter tax on the income of suburbanites who work downtown, conceding it would be easier to tax people they don’t represent. Ferguson’s report noted that such a tax could raise $300 million a year, but when Philadelphia enacted it, some businesses left.

New taxes are not the solution. Between 2000 and 2010, the population of Chicago decreased nearly 7 percent. In comparison, Houston grew by 7.5 percent in the same time frame. Chicago needs to attract new businesses, workers, entrepreneurs and families through more efficient, transparent and accountable government. With an unemployment rate of 10.4 percent as of August 2011 for the Chicagoland area, residents cannot afford an added burden.

The report also included 44 spending reductions with an estimated total savings of $660 million. The ideas range from some big ticket items like reducing the number of supervisory employees ($190 million) and privatizing city garbage and recycling collection ($165 million) to small administrative changes such as always printing double-sided ($200,000) or switching from Microsoft Office to comparable free software ($175,000).

Other revenue and spending options in the IGO’s report include:

• Eliminating all Tax-Increment Financing Districts ($100 million)
• Increase the Work Week of all City Employees to 40 Hours ($40 million)
• Eliminate 200 Motor Truck Driver Positions ($19 million)
• Eliminate Tuition Reimbursement for all City Employees ($7.3 million)
• Reduce the Number of Holidays for City Employees to 10 ($4.9 million)
• Conduct Competitive Bidding when Issuing Bonds ($500,000)
• Eliminate Additional Pay for Certain Water Department Workers when They Work on Weekends as Part of Their Normal Schedule ($400,000)

You can check out the entire report at the Inspector General’s website where you can also leave comments on specific options. Think it’s time to get rid of TIFs? Hate the idea of a commuter tax? Make your opinion known.