Daley says the city's revenues have seen some increase but it's hardly enough to qualify as an economic recovery. He says he doesn't want to burden taxpayers by increasing property taxes when some homeowners are still at risk of foreclosure.
But Daley warns other increases and service cuts are possible as he works to develop a balanced budget for next year.
He says the city is already taking steps to lower government spending with employee furlough days, other efficiencies and cuts.
"Too many Chicagoans are still at risk of losing their home to foreclosure and I don't want to make that situation worse at this point. Other increases and service cuts are still on the table primarily because we don't yet fully understand how much the economy and our revenues will improve," said Daley.
Among other the cost saving measures, the mayor plans to propose cutting back on tree planting and other city beautification efforts. He says that should save about $4 million.
The Associated Press contributed to this report.