March 16, 2010

Mayor Daley Tells Commercial Club Chicago Will Come Through Recession By Creating Jobs, Better Managing Government

Pension System Needs Reform Too, He Says
Mayor's Press Office    312.744.3334

Chicago will emerge from the recession and secure its economic future through a combination of job creation and better managing government, Mayor Richard M. Daley said today.

“I am determined to do everything that's needed to turn our economy around and get people back to work. At the same time, I will not rest until we've done more to restructure government, do more with less and make it more accountable to our city's taxpayers,” the Mayor said in a speech before the Commercial Club of Chicago held at the Chicago Club, 81 E. Van Buren St.

Daley also repeated his call for reform of the City’s pension system, which he said “isn't working for our city's budget or our city's taxpayers.”

The Mayor said it has been a difficult two years for the City and the nation. Far too many families continue to lose their jobs and struggle to pay their bills, businesses are restructuring and in government, revenues are slowing while the cost of government -- driven by the cost of personnel -- continues to grow.

“Still, we will get through these tough times. Government must do all it can to recruit new businesses, which will bring new, good-paying jobs to Chicago.
And government can support the efforts of every business in Chicago to grow and better compete in the new economy,” Daley said.

The Mayor summarized some of the many steps the City has taken over the past two years to help reshape the economy with a clear focus on creating the jobs and expanding the businesses of tomorrow. They include: 

  • The American Recovery and Reinvestment Act, which has provided Chicago with $1.85 billion, which has been used for, among other things, subway track replacement, street surfacing, purchase of new buses, rehabilitation of 6,800 public housing units, foreclosure prevention, providing more than 7,000 summer jobs for young people, construction and repair of school buildings and creating “green” jobs.
  • Establishing the City’s “Digital Excellence Initiative,” which aims at eliminating the digital divide that holds back parts of the City from benefiting fully from the new economy that emerges from this recession.
  • A series of steps -- including a loan program -- aimed at helping Chicago’s small businesses retain and create jobs despite the recession.
  • Temporary elimination of the City’s so-called “head tax” on new employees hired by businesses for two years as a way to encourage job creation.
  • Legislative proposals to restore Chicago's competitive edge in the global convention and tourism marketplace.
  • Modernizing O'Hare International Airport, a project on which the Commercial Club has taken such a key leadership role.

Daley said the City is also taking a comprehensive, long-term view of the critical issues of workforce training and development.

“Instead of looking separately at our city's job training programs, our public schools and our City Colleges, we're trying to coordinate each of these resources so that we have the greatest impact on our efforts to train and retrain our workers for the jobs of the future,” he said.

Specifically, Chicago has:

  • Re-focused its ongoing workforce and education programs on the sectors that are critical to the future of our local economy: health care, hospitality, transportation and technology.
  • In January, we announced a comprehensive re-structuring of the Chicago Public Schools Career and Technical Education programs that will create 80 new “College and Career Academies” at 35 high schools over the next seven years.
  • Announced new leadership at City Colleges of Chicago aimed at re-inventing the institution and dedicating more of its resources to job training and retraining.
  • Established a major, new workforce training initiative -- called Chicago Career Tech -- that is aimed over the long term at helping about 30,000 unemployed Chicago middle class workers get retrained in technology.

Getting people back to work and creating new jobs -- not just replacing those that have already been lost – is a big challenge. But it’s not the only big challenge and it’s not the only big responsibility we have,” Daley said.

“As Mayor, I have a responsibility to make sure that City government provides the services that the people of Chicago need, but at a cost they can afford.”

Toward that goal, he said the City has made hundreds of management improvements over the years aimed at controlling and cutting spending so that tax increases are the last resort. 

  • Last month, Daley ordered each department in City government to immediately implement an across-the-board reduction in non-personnel expenses of 6 percent, except for critical public safety operations. This step should save about $11 million and not affect service delivery.
  • He ordered a comprehensive management review of Chicago Police Department headquarters to assure the City is using every possible dollar to prevent and fight crime on our streets and in our neighborhoods.
  • The City’s ban on hiring new employees remains in effect. New hires will be made only in a limited number of situations, including positions important to public safety and revenue-generating or other critical positions.
  • Daley has said he will not approve any departmental budget proposal that increases spending in 2011 unless there is a compelling reason to do so, such as contractual obligations.
  • Daley has challenged his budget and financial leadership team to do more to rethink the role of government and even restructure it both to control costs further and better serve the people of Chicago.

Daley called the pension issue “one of the most daunting budget challenges we face.”

He said the City’s growing structural budget deficit is the direct result of the increasing cost of personnel -- health care, salaries, but especially public employee pensions.

“It’s my sense that people across the nation -- and in Chicago -- are angry at what they see as a system that puts pensions for government bureaucrats ahead of taxpayers’ needs,” he said.

The Mayor said he has asked his staff to review how the City can reform its pension system, including addressing the issue of “double-dipping” and the frustration that average people feel over it.

Soon, a pension commission that Daley appointed two years ago will release its recommendations.

“I don't know whether I'll agree or disagree with their ideas. But, what I know is this. It's time to reform a system that isn't working for our city's budget or our city's taxpayers -- or for some of our employees, for that matter,” he said.

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