Chicago Mayor Rahm Emanuel will have to make difficult choices to close next year’s $600-$700 million budget shortfall and address the structural budget problems that have plagued the city’s finances, according to a new watchdog report released today.The 117-page report, from Chicago’s Civic Federation, offers a roadmap to financial stability, outlining 40 recommended reforms that would go into effect over the next three years.
Here are some of the key recommendations:
- Tackle the city’s $14.6 billion unfunded pension liability by reducing future benefits, raising city and employee contributions, and consolidating the four city pension funds.
- Set up a trust to fund Chicago’s $1.3 billion unfunded healthcare liability.
- Reduce police department costs by redrawing police district maps, streamlining management, and reducing “chronic absenteeism.”
- Cut the Chicago Fire Department’s $526.5 million budget by reevaluating staffing, as well as the number and location of fire stations.
- Reduce Chicago City Council size by half, down to 25 alderman. This would decrease the city’s annual overhead costs by at least $6.5 million and bring Chicago in line with other major U.S. city councils — Chicago has five times as many city council members per capita as Los Angeles and three times as many as New York.
- End a city pension subsidy to Chicago Public Schools and allow the school district to make up the loss with a $75 million annual property tax increase.
- Revive the $2.5 billion privatization of Chicago’s Midway Airport.
- Transfer city health clinics and election operations to Cook County. Pursue joint revenue collection and enforcement with the county.
Emanuel already appears to exploring some of the proposed measures, including layoffs and pension reforms. Personnel costs eat up 83% of Chicago’s budget and continue to rise, despite nearly 6,000 layoffs since 2002.
Other recommendations will likely set off strong opposition; proposals that would alter the public safety departments or increase taxes have been particularly unpopular. Unsurprisingly, Chicago’s elected officials have also resisted calls for cuts to the City Council.
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