December 2, 2009

City Council Approves Mayor Daley's 2010 Balanced City Budget

Budget Responsibly Addresses Challenges of Tough Times, Addresses Urgent Needs, Better Manages Government, and Provides Property Tax Relief
Mayor's Press Office

Budget Responsibly Addresses Challenges of Tough Times, Addresses Urgent Needs, Better Manages Government, and Provides Property Tax Relief

The Chicago City Council today approved Mayor Richard M. Daley's balanced budget for 2010 that maintains services, better manages government, protects taxpayers and includes a $35 million property tax relief program targeted to help property owners affected by the phase-out of the "7% cap" in Springfield.

The Council voted 38 to 12 in support of the budget ordinance.

Mayor Daley said that despite the recession and the severe decline in the City's key revenues, the 2010 budget addresses Chicago's most urgent needs: job creation, violence against young people, and getting more from every tax dollar in difficult economic times. The City will also maintain essential services and the number of sworn police and fire officers.

"I know there are those who will say we haven't done it right, but my job is to balance the need to manage government prudently for taxpayers with making the investments that keep Chicago moving forward," Daley said.

"And my job is to fight for the interests of Chicago's working and middle class families who so greatly need our support right now," he said.

The 2010 budget does not raise property taxes or contain any new tax, fine or fee, or increase any current tax, fine or fee. "With so many people struggling, this isn't the time to ask them to pay more," Mayor Daley said.

"I choose to be on the side of Chicago's working- and middle-class families. With this budget, I'm confident that we will get through these tough times and that we'll build a better, stronger Chicago for them and every Chicagoan," he said.

The reason for the City's projected 2010 $520 million budget deficit is twofold: economically sensitive revenues have dropped by 17% this year because of the recession and are projected to fall an additional 9.7% in 2010; and the costs of wages, pensions and health care - which accounts for 80% of City expenditures - continues to increase. Mayor Daley said that in a step he had hoped he would not have to take, the City will borrow from its parking meter reserve funds to fund some essential services.

"Chicago was far-sighted in creating these reserves and now is the time we must draw on them," he said.

About $270 million will be taken from the parking meter long-term reserve, with the plan of replenishing it when city revenues have rebounded. The City also will advance the $100 million 2012 parking meter mid-term reserve to 2010.

The Skyway long-term reserve of $500 million will remain intact, as will $130 million in the parking meter long-term reserve fund and $100 million in mid-term reserves split evenly between the Skyway and parking meter funds.

Therefore, the city's long term reserve fund will have a balance of $730 million, the Mayor said.

Mayor Daley said that it was because of the parking meter and Chicago Skyway concessions that the City would be able to fund many programs to help working families and those who most need the city's support next year.

He also said that "without these agreements, we would have been forced to raise property taxes - both this year and next year. And we would have been forced to raise other taxes and fees, as well. Without them we would have been forced to eliminate key programs upon which people depend."

The major areas addressed by the 2010 budget are:

Expense Reductions
Mayor Daley said that the City will reduce expenses in 2010 through a variety of management initiatives and efficiencies, including:

  • Continuing to implement the agreements reached this year with both union and non-union personnel regarding work hours and furlough days. The agreements will save the City $70 million next year. Non-union employees - including the Mayor - will take 24 unpaid and furlough days in 2010.
  • Eliminating 220 vacant positions and cost-of-living increases for non-union employees for a savings of $24 million.
  • Implementing $20 million in savings from non-personnel reductions in contractual services, fuel costs, real estate and equipment rentals.
  • Closing out two Tax Increment Financing district funds that are inactive or set to expire soon. This will generate another $8 million for the City.

Property Tax Relief
The City of Chicago Property Tax Relief Program is one of a number of programs in the budget funded by the City's parking meter Human Infrastructure Fund.

"During these tough times, more than ever, Chicago's working and middle class families need our support," Mayor Daley said. "They need property tax relief and they need it now."

The property tax relief program will provide grants to help homeowners offset any increases in their 2008 property tax bills for their primary residences, particularly for those homeowners hit hardest by the lack of a 7% cap on assessment increases that expired and was not renewed by the state.

Homeowners who apply will receive a grant up to $200 based on their income and the size of their property tax increase.

Addressing the Needs of People
Mayor Daley also said that by using parking meter fund proceeds the City would also be able to increase funding for meals to seniors, housing rental subsidies for low income families and programs for ex-offenders.

The City will also use the meter proceeds to increase funding for the Share the Warmth program, which helps needy families pay their heating bills, for homeless shelter beds and to maintain funding for the Plan to End Homelessness.

Preventing Violence Against Chicago's Young People
Mayor Daley said that the 2010 budget tackles the challenge of youth violence.

He said he had instructed the Chicago Police Department to deploy more officers to troubled schools and on the CTA during dismissal times and asked the CAPS program to help create safe passages for students to and from troubled schools and to strengthen and create new block clubs to become the "eyes and ears of the community."

He said that despite troubled times he had made it a priority to fund after school and jobs programs to keep the City's children involved in positive activities. The 2010 budget invests over $33 million in these efforts.

Growing Chicago's Economy
Mayor Daley also said the 2010 budget invests in programs to help turn around Chicago's economy by creating new jobs and opportunity, new businesses and by providing job training.

He said the City will use up to $25 million ($8.4 million in 2010) in parking meter human infrastructure funds to support a job training program, called TechCorps, for Chicago workers who have been laid off during the bad economy.

Preventing and Uncovering Misconduct
Mayor Daley said he knows the people of Chicago are concerned about wrongdoing at all levels of government and business across the country. The 2010 budget will help the City uncover and prevent misconduct and improve the transparency of government in several ways:

It supports the Office of the City's Inspector General, to which position Mayor Daley recently appointed veteran Assistant U.S. Attorney Joseph Ferguson.

It will strengthen the Office of Compliance and its ability to uncover fraud and misconduct in the women and minority owned business program

It calls for posting online all current statements reflecting the financial holdings of elected officials, city employees and members of boards and commissions, starting with Mayor Daley and his top staff.

Improving Neighborhood Quality of Life
Through the City's capital program it will reconstruct 11 miles of sewers and lining and rehabilitate an additional 40 miles of them. It will resurface more than 550 blocks of local streets and more than 110 alleys and replace more than 150 blocks of sidewalks.

Mayor Daley said the City will start construction of a new fire station, a new police station and five new branch libraries.