Friday, July 23, 2010

Chicago's 2011 budget $700 mil in hole

Where did the money go?

What is the price of corruption?

What is the City of Chicago's projected budget deficit for 2011?

There's a question with an answer. It's a mind-boggling $700 million. Assuming a population of 2.9 million, each resident would need to donate $241.38 to the city to balance the budget. ($659.18 per capita.) A grand for a family of four.

Remember the telethon for Detroit in Robocop 2? This is far worse.

It's almost inconceivable that the city's budget situation has reached this nadir. City residents spend thousands of dollars every year on taxes and fees. Vehicle sticker, handgun ownership fee, sales tax, restaurant tax, liquor tax, gas tax, parking garage tax, parking tickets, traffic tickets, red-light camera tickets, and amusement tax (a portion of the ticket price of a movie, sports event or show). Businesses in the city pay for operators' licenses, liquor licenses and an employee head tax. There are probably other examples. Tourists and business visitors are hit hard, with steep airport, hotel and car rental taxes and fees.

Parking meter revenue is not part of that list because the city doesn't see it. Mayor Richard M. Daley and a compliant City Council sold the parking meter revenue to LAZ Parking for 75 years. They sealed that deal less than two years ago, in December, 2008. Now the Sun-Times reports 90 percent of that up-front money is gone. Of course some of it was intended for immediate budget deficit needs. But all of it? Even if the city drained the fund to prop up its 2011 budget, a $520 million deficit would remain. And the parking meter revenue would still be off-limits for 73 years.

How did the city financial situation get this bad, this fast? There are two costs that are difficult to quantify but play major roles in budgeting malfeasance: corruption and the lack of any political opposition in the city.

There is a corruption scandal linked to Hizzonerdamare's office about every six months. It's always about money--lots of it--and contracts.

In other large cities, proposed budgets with their tax and fee increases are subject to lively debate. In Chicago, the budget is whatever the mayor wants it to be. As a result, there is no control--no system of checks and balances to fight tax/fee increases or egregious spending. The result is predictable: a $700 million shortfall.

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