Cut From the Top

I didn’t want to let the day go by without talking about the city of Chicago and its new budget:

Mayor Richard Daley warned Wednesday it will take longer to repair potholes and replace burned-out streetlights as he unveiled a 2009 budget plan that would slash the city’s workforce and increase a long list of taxes and fines.

The mayor said his proposal would close a $469 million shortfall and be the first step in a four-year plan to grapple with hard times.

“We think next year will be worse,” Daley told the Tribune’s editorial board after presenting his plan to the City Council.

Even factoring in modest increases in now-plummeting tax revenues, city officials project budget shortfalls of about $200 million a year in 2010, 2011 and 2012. Wages and benefits will grow by about $150 million a year, largely due to the 10-year deal that Daley reached last year with labor unions representing many city workers.

In just the last year Chicago’s property taxes have been raised sharply and we now have the highest sales tax in the country. Mayor Daley is shrewd enough to understand that he’s gone to that well as often as he can for a while and cutting costs is the only alternative at hand.

Where was that fiscal prudence when the mayor reached the last year’s agreement with the city’s labor unions?

My prescription is the same one I’ve been making for the state and federal governments: the city needs to start doing a lot more with a lot less, a total re-thinking and re-imagining of city government and services. The time to do that was ten years ago when the situation wasn’t desperate.

Failing that here’s another suggestion: cut from the top. A salary cut for every department head, every manager. They’re not covered by union contracts.

I’ve never bought the argument that government needed to pay fat salaries to get the best talent, to compete with the private sector, largely because I don’t think that’s what they’re doing—I think they’re paying the usual suspects more money.

Another key factor in getting the city’s budget under control requires health care reform. Health care costs are rising significantly faster than the city’s tax base is. That’s a subject I’ve written about frequently but it’s also something that’s beyond the city’s control.

2 comments… add one

Leave a Comment