Monday, July 28, 2008

City Faces $400 Million Budget Shortfall

Sun-Times:
Top mayoral aides have been meeting privately with union leaders to prepare them for the loud noise they'll hear this week, when Mayor Daley lowers the budget boom.

Daley's preliminary 2009 budget is expected to include the largest shortfall in recent memory -- more than $400 million, according to some sources -- setting the stage for service cuts, employee layoffs, unpaid furlough days or a combination of the three.

One union leader, who asked to remain anonymous, said Chief Financial Officer Paul Volpe and Intergovernmental Affairs Director John Dunn tried to prepare him for the worst.

"They said it's going to be very bad. I said, 'There's always a black hole when we're in negotiations.' They said, 'This is more than a black hole,' " the union leader said. "They're looking for cooperation. They're probably looking at unpaid furlough days again. They said that could be one of the ways we could show a cooperative effort."

The mayor has already tied his own hands by promising to hold the line on property taxes on the heels of last year's record increase.

With expenses rising, real estate transfer taxes plummeting and sales taxes down as strapped consumers cut spending, painful budget cuts appear to be the only alternative. Other cities and states are facing equally painful choices.

"Food prices go up. Gas prices go up. And expenses go up. The dollar is losing value continually. We are in a serious financial crisis in America. I keep saying that. People look at it and, maybe, dismiss it. But, I think we're in a much more serious financial crisis than people . . . believe. It's gonna have a long effect on this economy," Daley said Friday.

"It's not gonna be decided by one budget. It is gonna be over a period of years that you have to make some tough decisions. . . . You don't threaten people you're gonna have layoffs and all that. . . . You have to work together, and you have to find out how you can come through this crisis as quickly as possible."

And how does he propose to do that while holding the line on taxes?

"You work at it. . . . You roll up your sleeves, and you start working, and you look at it. You just don't have magic answers today. You look at each department, 'What are you doing?' and find out how you can correct this," Daley said.
Via Chicagoist!

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