Daley hopes cuts will save city millions

March 13, 2008 3:55:16 PM PDT
Major belt tightening at Chicago's City Hall Thursday: Mayor Daley is slashing millions from the city's budget and implementing a citywide hiring freeze. The mayor says its a fallout from an economy in recession.

The mayor says the state of the economy is affecting revenue and he is looking for ways to balance the budget to avoid increasing the burden on city taxpayers.

The city is expecting to lose revenue, on everything from the sales tax, to the money it collects when someone buys or sells a house. All of it is a result of the downturn in the economy. And, if you work for the City of Chicago, your own economic outlook may be softening just a bit.

"I'm worried," said Mayor Daley Thursday.

Daley is using the "R" word: Recession. That has City Hall preparing for tough economic times.

"We're just like you. We're just like any other company. It's a huge company. You have the taxpayers, you have your shareholders. You have to do things to protect them," said Mayor Daley.

The Mayor hopes to cut spending by $20 million on top of $67 million already cut from this year's budget.

How's he doing it? Eighty city jobs currently vacant won't be filled, a hiring freeze and no more overtime for every city department, except those that handle public safety.

Daley previously announced non-union city workers will have to wait six months for a raise. Plus, all city departments will be asked to cut 3 percent from their budgets. It's happening despite the fact City Hall's budget gurus say, so far, they haven't seen a drop off in revenues.

"I'm going to stand here before you today and say we have not seen anything turn down significantly. That's the message today. The message is this is proactive, not reactive," said Paul Volpe, Chicago's chief financial officer.

But it has been an expensive winter for the city. Each year there is only $18.5 million budgeted for snow removal. Last year, the city spent $30 million. So far, this year, they've spent almost $23.5 million.

"You can't predict the weather year to year. So you can't really base it on last year," Said Bennett Johnson, Chicago's budget director.

And what happened to all the money the mayor hopes to make from leasing city assets like Midway Airport and parking meters? Daley says that money should only be used for big infrastructure projects, not the day-to-day running of government.

Instead, he'd like the feds to make up for the drop off in private sector spending by spending on big projects, a "new" New Deal if you will.

"If Roosevelt did this during the Depression, why can't we do this immediately?" Mayor Daley said. "And trying to give everybody $600. Everybody loves $600 or $1,000. But that's -- what's going to happen in July and August and September and October and November? And that's the issue."

Talking about city jobs, to give you some perspective, in 1990, just after Mayor Daley took office, there were 38,689. After a brief rise, the budget is now nearly 3,000 employees lighter. That's despite an increase of about 1,500 cops on the street.

As for the future, Mayor Daley says he hopes to avoid layoffs -- but it will depend on just how long the economy stays soft.