PI Original Josh Kalven Tuesday November 18th, 2008, 11:17am

The Chicago City Budget: Preparing For Round Two

Yesterday, Mayor Daley and the Chicago Federation of Labor (CFL) reached a deal aimed at reducing the number of layoffs originally proposed by the city. The Sun-Times lays out the details:

Union leaders have agreed to work-rule changes to reduce the city's
...

Yesterday, Mayor Daley and the Chicago Federation of Labor (CFL) reached a deal aimed at reducing the number of layoffs originally proposed by the city.  The Sun-Times lays out the details:

Union leaders have agreed to work-rule changes to reduce the city's overtime costs, the soures said. They have also agreed to drop their opposition to a partial shutdown of city government around the holidays.

In exchange, Daley has agreed to offer cash incentives — at least $5,000 and as high as $15,000 — for members of Laborers Local 1001 to induce retirements by eligible union members.

The City Council is expected to approve Daley's budget when it comes up for a vote tomorrow.  But members of the Independent Caucus, as well as the unions, appeared to take notice when the Tribune reported last Friday that the mayor's 2009 budget projections may be overly optimistic.  Reporters "City Hall soon will be scurrying to balance its books yet again" because Daley "is relying on revenue estimates that are rosier than what the city might expect given the dire economic prognosis."

Appearing on FOX last weekend, Ald. Toni Preckwinkle (4th Ward) and CFL President Dennis Gannon both seemed to anticipate dealing with further shortfalls early next year.  Rather than focus too much on the current budget, they each hinted at proposals that may be on the table several months from now. For instance, Gannon brought up the idea of a gas tax, while Preckwinkle endorsed cuts to the city's PR budget.  Watch:

Absent from this discussion, however, was any mention of the money locked up in the Tax Increment Financing (TIF) system.  But if the mayor's budget requires a second look in six months, that may be on the table as well.  As a reminder, here's Ald. Tom Allen (38th Ward) back in early October:

"We need to go to Springfield and change the state law so we can reclaim our TIF dollars that are being held hostage and put that money back in the general fund," said Ald. Thomas Allen (38th). "We're at least partly in the trouble we're in because of the TIFs."

If this budget ultimately sees a second round, it's sure to be rougher on Daley than the first.

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