As it turns out it’s darned hard to determine the rate of economic growth in the City of Chicago. It’s easy enough to determine for the Chicago metropolitan area but not the city as such. However, there’s one thing that is pretty easy to research that I think is a pretty fair proxy for economic growth: city revenues.
Here’s a graph of Chicago’s revenues derived from the city’s own analysis of its fiscal position:
My interpretation of that is that Chicago’s revenues have been flat since 2007. If you exclude “Proceeds and Transfers In”, the city’s revenues have increased about 3% since 2007 or, said another way, dollar revenues are nearly flat while real revenues have actually decreased. Most revenue classes have declined since 2007. A few, e.g. non-tax revenue which includes various fees the city collects like parking fines, penalties for traffic tickets, license fees, and so on, have increased sharply, as anyone who lives in the city could tell you. That’s what all those red light cameras were for.
You can click on over to the whole report but I’ll save you the trouble. The good news is that the city’s expenses have been flat since 2007, too.
The really bad news: even with flat expenses flat revenues leaves nothing to pay extraordinary expenses like the big payment the city owed its pension fund, mostly the result of not having paid anything into it over a period of 15 years.
Just about anything you can do to increase revenues will be regressive and have an adverse impact on the city’s economic growth, something it can hardly afford. Consequently, I think the real solution is for the city to roll wages back, a view that doesn’t exactly make me popular around here. What makes me think that is in the early Aughts during the housing boom, city employees got a big raise. Although revenues were as high after 2007 as they’d been expected to be, expenses remained just as high as they were expected to be. The difference has to be made up somewhere.
It is jard to explain: Chicago is run by Democrats.