Quick Hit Micah Maidenberg Wednesday October 13th, 2010, 3:47pm

Daley's Bad News Balanced Budget

Outgoing Chicago Mayor Richard Daley's last budget (PDF) isn't pretty. To close a gaping deficit of nearly $655 million, Daley leans on the city's reserves ($120 million from the city's parking meter fund, $38 million from Chicago's tax increment financing districts), the city's employees (non-union workers will take furloughs and the mayor hopes unionized city staff will agree to something similar), $91.3 million in "more favorable revenues," and relatively undefined operational changes (a press release promises savings from "lease renegotiations, contract reductions, locked in lower utility costs, the reduction of custodial services, and savings in healthcare costs, among others").

The budget makes room for 150 to 200 new police officers next year but maintains a freeze on hiring new non-safety personnel. Thirteen million in savings is projected by cutting 277 budgeted positions. Recycling may be privatized.

While the budget doesn't raises taxes or fees for next year, by draining all but $76 million from the parking meter reserve fund, it does essentially take money from future generations of Chicagoans. From a statement released by the Illinois Public Interest Research Group:

The city received $1.16 billion for the parking meter lease. Of the $1.16 billion, $400 million was reserved for a long-term reserve/reinvestment fund, which was anticipated to provide $20 million per year to replace lost revenue from the meters. By raiding these reserves and leaving a mere $76 million in the rainy day fund, future generations of Chicagoans are going to be denied $16.2 million annually in accrued interest. Mayor Daley said today that these funds will be paid back over the next few years, after he leaves office, burdening future mayors with recovering this revenue.

City Council hearings about the budget start next Monday and are expected to last through early November. For more background about ways some aldermen would like to improve the city's budget process, check out our post from yesterday.

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