Proposed Chicago Budget Avoids Necessary Spending Cuts
by Amanda Griffin-Johnson Since 2000, Chicago’s city budget has increased 11% (adjusted for inflation). Spending reforms are needed to ensure the long-term health of city finances, but it appears that Mayor Daley would rather continue depleting the city’s reserves. Failing to make tough spending cuts today will only make the situation worse down the road. The Chicago Tribune reports: The...
by Amanda Griffin-Johnson
Since 2000, Chicago’s city budget has increased 11% (adjusted for inflation). Spending reforms are needed to ensure the long-term health of city finances, but it appears that Mayor Daley would rather continue depleting the city’s reserves. Failing to make tough spending cuts today will only make the situation worse down the road. The Chicago Tribune reports:
The Civic Federation warned Wednesday that Chicago taxpayers would pay a heavy price for Mayor Daley’s decision to balance his final budget with a trick-bag of one-shot revenues that include another raid on parking meter and Chicago Skyway reserves.
“If the city does not stop deferring necessary, but difficult changes to its spending, hefty tax hikes and/or enormous budget cuts will needed to balance the budget when one-time revenues have run out,” said Civic Federation President Laurence Msall.
“The longer major structural cuts are delayed, the larger they will have to be . . .when asset lease reserves are depleted and the city can no longer turn to major non-recurring revenue sources.”
During a public hearing on Daley’s proposed, $6.15 billion budget, the Civic Federation declared its opposition to the 2011 spending plan on grounds that it ignores the city’s massive structural deficit and “relies too heavily on asset lease reserve funds and debt restructuring” to erase a record $654.7 million shortfall.
Instead of taking the easy way out by putting off tough choices until after the Feb. 22 election, Msall urged the City Council to: make $85.4 million in additional spending cuts recommended by Inspector General Joe Ferguson; create a formal “withdrawal policy” to protect proceeds from the sale of city assets and build up an unreserved cash balance expected to drop to an alarming $2.7 million.
You can read the full article at the Chicago Tribune website.