Mayor Rahm Emanuel addressed the Chicago City Council yesterday and presented his recommended budget for the Fiscal Year 2014 budget, totaling $8.7 billion and discussed the good stuff up front. He saved the tough stuff for the end as he ominously warned, "We must deal with our looming pension crisis."
Emanuel also addressed the issue of hiring more police officers and keeping the streets of Chicago safer, calling it the "tale of two cities when it comes to public safety."
But first, Emanuel touted the third consecutive year without introducing new property, sales or gasoline taxes.
"To balance our budget for the past three years without any increase in property, sales or gas taxes was only possible by changing the way Chicago does its business," Mayor Emanuel said. "We have reduced our structural deficit by making city government smaller, smarter, and simpler. We have coupled necessary reforms with improved services so city government works better for all our residents."
In 2011, the City faced a projected deficit of $790 million for 2014. In the last two budgets, that structural deficit has been cut by more than half, to $339 million.
The City began the 2014 budget process with a projected deficit of $338.7 million. The gap was closed through spending reforms and cuts, and improved revenue growth, including: $40 million through reduced technology, equipment and telecom costs; $26 million in healthcare savings; $101 million in additional revenue growth and children’s safety zones; $35 million from sweeping aging revenue accounts and grant funds; $34 million in targeted revenue enhancements; $18.7 million through proper allocation of costs to enterprise and grant funds; and $53.4 million from 2013 surplus captured through spending controls.
Part of the $26 million dollar savings in "healthcare," is a change in health benefits for city of Chicago retirees. The changes announced are part of a three year phase-out of benefits that will affect those who retired after August 23, 1989. Those who retired prior to that date will continue to receive up to a 55 percent subsidy for the City’s retiree healthcare plan, which will continue for their lifetime.
There are other new fees and increases in old fees. One of the areas in which Emanuel expects to raise revenues is with the hated speed cameras in school zones. The 2014 budget calls for the establishment of a “Children’s Fund,” what Emanuel calls a "protected fund" that is supported largely by an anticipated $65 million to $70 million in revenue from children’s safety zones.
The school zone speed camera has been the source of controversy.
Emanuel explained the rationale for the speed cameras. "I promised that revenue from the new camera enforcement in children’s safety zones would go to keeping our children safe – and this budget does exactly that."
He added that a "Children's Fund" would be established, or as he called it a "Kids Fund."
"We will be creating a Kids Fund to ensure that this new money is dedicated to keeping our kids learning and safe. As the federal government continues to slash funding for children, we’ll keep our priorities straight by maintaining current spending and expanding the most successful after-school and summer programming," said Emanuel.
The Children’s Fund will allow the city to not only maintain current funding for children’s programs, said Emanuel, but will allow for the following investments:
• $13 million in afterschool opportunities for nearly 16,000 kids. This represents a 25 percent increase in funding since Mayor Emanuel took office in 2011, more than making up cuts in federal funding and allowing the City to serve 3,000 more children.
• $14.5 million in summer jobs for more than 12,000 youth, more than doubling the number of children served by City-funded programs since 2011.
• $11 million in early education opportunities, part of a three-year, $36 million investment announced last year that will provide early education to 5,000 kids.
In addition, Emanuel is proposing an increase in the city cigarette tax of 75-cents a pack. "With this budget, we will use revenue from a 75-cent increase in the cigarette tax to enroll these children in Medicaid. Working with CPS and our community partners, I am setting a goal of enrolling 15,000 CPS students in Medicaid by the end of the year," said Emanuel.
Last year, free vision tests and eye care to 30,000 CPS students and the increase in the cigarette tax will add another 15,000 children who still lack eye care, said Emanuel.
The budget also continues to promote job growth and improves public safety and the quality of life in our communities through various initiatives, including:
• Increasing funding for graffiti removal, rodent control, tree trimming, tree removal and tree planting.
• Expanding the microlending initiative in partnership with the City Treasurer’s Office to help support 300 businesses by 2016.
• Launching a pilot program that will pay out Earned Income Tax Credit in advanced quarterly payments. This will provide an option for families who need money before tax season to make ends meet, rather than going to a predatory lender. The program will serve 500 working families.
• Adding seven new Family Net Centers to provide residents with training in technology skills such as using email, online banking, online research, and accessing government services.
• Funding for the Chicago Police Department to hire officers to remain at full strength at all times.
• Expanding CAPS’ focus on youth and upgrading the CAPS communication strategy with a citywide tool kit to help groups self-organize around public safety issues.
"We should all be proud that we’ve kept up these investments while cutting our inherited deficit in half. We have come a long way by working together over the past three years," Mayor Emanuel said.
Emanuel announced that the Police Academy would graduate 741 police officers and "put them on foot patrols in the neighborhoods that most need them. This is the most new recruits since 2000. Our new budget will fund another full year of academy graduates – ensuring that Chicago’s police force remains at full strength."
Emanuel said he would not be satisfied until all residents realize the same sense of safety "regardless of neighborhood, zip code or income." Emanuel put forth a simple plan of four P's – policing, prevention, penalties and parenting. Emanuel also made an a claim that "We have reinvented our community-policing program."
Emanuel also advocated strong gun control laws, saying that we "cannot overcome the weakest link in our public safety strategy – the proliferation of illegal guns on Chicago’s streets."
In the most pressing financial issue facing the city, Emanuel cautioned that the City’s progress over the past two years will be for naught without pension reform in Springfield. The City faces a $600 million pension cliff in 2015.
Emanuel warned of the consequences of pension reform, warning that meeting current pension obligations would require the city of Chicago to nearly double the city’s property tax. That is a move that would send residents and businesses streaming out of Chicago, Emanuel said.
"Should Springfield fail to pass pension reform for Chicago soon, we will be right back here in Council early next year to start work on the city’s 2015 budget – a budget that will either double city property taxes or eliminate the vital services that people need," said Emanuel. "Without reform, we cannot make the critical investments in our future, and the future of our children. Without reform, we cannot be the city that we want to be."
In this case, it is out of the control of Mayor Rahm Emanuel and in the hands of Illinois Senate President John Cullerton and Illinois House Speaker Michael Madigan.
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