Politics

CHICAGO (CBS) ― Mayor Richard Daley's $6 billion 2009 budget — precariously balanced with 784 or fewer layoffs, slow police hiring and $52.5 million worth of taxes, fines and fees — sailed through the City Council Wednesday amid concern about even tougher times ahead.

The final vote was 49-1 after a two-hour debate. Last year, a Daley budget that included a record $276.5 million in tax and fee increases, including the largest property tax increase in Chicago history, drew 13 dissenting votes.

Budget Committee Chairman Carrie Austin (34th) warned that the biggest financial crisis of Daley's 20-year reign "will get worse before it gets better."

"I'm concerned about the revenue projections in this budget and whether they are realistic…What tricks do we have up our sleeve next year?" Ald. Robert Fioretti (2nd), warning that "nickel and dime" tax and fee increases won't cut it.

With an unreserved corporate fund balance of just $1.5 million, Chicago has precious little wiggle room.

"We're very conservative in our revenue estimates," Daley said. "Unless everything goes in the sewer system, then the whole country is in trouble."

If already depressed revenues fall even shorter than expected, Wall Street rating agencies warn Daley faces difficult choices: Raid the $500 million Skyway fund; establish a new line of credit to pay employees, contractors and retire debt; or order even deeper budget cuts beyond those already planned.

And there's another potential pitfall. If the mayor doesn't seal the deal to privatize Chicago's 35,000 parking meters by year's end — and get at least $150 million from the transaction to use for operations this year and next — he'll have to find another way to close that gap.

Daley's decision to lay off 784 employees and eliminate 1,346 vacancies means Chicago will wait longer to hire police officers, plow a side-street, fill a pothole, trim a tree, sweep a street and clean a vacant lot.

And Ald. Ed Smith (28th) is afraid that some neighborhoods will wait longer than others.

"Now we have a responsibility to the city. This is our city and if we sit by and allow our city to sink into financial ruin, then it's on us," Ald. Smith said.

To save $10 million, only 200 police officers will be hired during all of 2009. With more than 400 vacancies already and an annual attrition rate of 600, Chicago could end the year 800 officers short of the police strength it had on Jan. 1, 2008.

The city had announced it planned to cut 929 jobs to plug the budget hole. But there was a last-minute agreement with the unions representing city employees to save some jobs.

The unions agreed to rules that reduce the city's overtime costs and called for mandatory unpaid furlough days during which the government would shut down. The unions also have agreed to voluntary retirement buyouts ranging from $5,000 to $15,000 for employees with long seniority. The city says that voluntary severance program will likely clear the decks for younger workers to come on board.

The layoffs would have been worse if not for an unprecedented agreement that reopened the 10-year contract that guranteed labor peace through the 2016 Summer Olympic Games.

"If there was any heavy lifting done in this budget process, the belt goes to the union leadership and to the administration for working together up to the very last day to reduce the number of layoffs," said Police Committee Chairman Isaac Carothers (29th), with union leaders seated in the Council gallery.

But even with those concessions, the city still plans to shrink the size of 80 more garbage collection crews, from two laborers on a truck to one.

Aldermen from across the city have questioned whether smaller crews can keep pace with garbage collection and bulk pickups in densely populated wards. Aldermen say constituents will still notice a measurable decline city services. They say they hope Chicagoans will understand the economy is making times tough for everyone.

"I think we'll notice cuts throughout the winter – filling the potholes; we'll see the snow removal maybe a day later," said Ald. Bob Fioretti (2nd).

"I think the basic services of street cleaning, garbage pickup, and more importantly police protection and fire protection are going to be there," said Ald. Danny Solis (25th), "but we're not going to get it done as quickly as we normally do."

"Tough budget. Terrible budget. Terrible times," said Ald. Richard Mell (33rd). "Not only terrible budget, but terrible times in this city."

Ald. Billy Ocasio (26th) cast the only vote against the budget. He was one of the few aldermen who spoke out against the mayor's budget. He argued that most of the layoffs affect not the desk jockeys, but "people who do the work and get paid the least."

"We find millions of dollars in private and public funds when it comes to places like Millennium Park, the 2016 Olympics or Buckingham Fountain. But when it comes to finding….$75,000 for a woman's homeless shelter, the city says it's an ongoing process. We all know what that means. It means no," Ocasio said.

"For the reasons mentioned — the wrong people being laid off, my community being taken for granted, all of the false promises and the fact that this administration believes that everything and everyone is expendable — I vote no."

At least it's a balanced budget. Atlanta, Phoenix and Philadelphia are facing so much red ink, they're begging for $50 billion in bailout money from the feds. Chances are they won't get it.

The STNG Wire contributed to this report.

(© MMIX, CBS Broadcasting Inc. All Rights Reserved.)

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