Daley warns of growing budget problems

February 11, 2009 3:23:39 PM PST
Mayor Daley is warning the City Council about Chicago's growing budget problems. He says there could be service cuts and more layoffs in the future. Mayor Daley says the city has seen a revenue shortfall of $50 million in just three months.

The weather outside City Hall Wednesday fit the gloomy mood inside the council chambers. The mayor described the national and local economy as being in something worse than a recession. His budget staff says the signs of hard times are evident in the unprecedented bad numbers reported by the city revenue department.

As Chicago's economy worsens, taxes, fees and fines collected by City Hall are shrinking. Aldermen were gathered in small groups Tuesday and told the bad news: during the first three months of the 2009 fiscal year, revenues are $50 million below what they had been projected to be by the mayor's budget office.

"Not only is real estate going down, and then you look at your income tax, and sales tack is going down. So your revenue across America is going down in regard to taxes," Mayor Daley said.

Late last year, the city laid off more than 400 workers, most in the Streets and Sanitation Department. The mayor's office has warned that more personnel cuts could happen during the budget year if revenues don't recover.

"I expect that what we're going to see is more furlough days for all of us as a way of both meeting our needs and keeping from having more layoffs," said Ald. Toni Preckwinkle, 4th Ward.

Other aldermen say that city officials might have to reassess city services if the economy worsens.

"We first have to make sure that we place a priority on core services and making sure that those core services are delivered with the highest degree of quality," said Ald. Manny Flores, 1st Ward.

Alderman Pat Dowell is concerned that the economy could affect the city's bid to host the 2016 Olympics.

"I'm not a great big cheerleader for the Olympics. I think if we get it, you know, it's a good thing. But we should focus on what's needed in our city right now," said Ald. Pat Dowell, 3rd Ward.

The mayor did not mention any affect on the Olympic bid in his statement or during his news conference Wednesday.

Chicago 2016 and Daley administration officials are quick to point out that the Olympic bid is not dependent on city expenditures or tax revenues. Aldermen are very concerned about the public perception if there are city cuts being made during the spring and summer as the Olympic decision countdown continues.