Watchdog: Next mayor should freeze hiring, spending on Day One

February 14, 2011

Chicago's next mayor should freeze hiring, privatize more city services and keep his hands out of the public piggy bank if he hopes to break the cycle of overspending at City Hall, according to a new report from a Chicago-based budget watchdog group.

The report released Monday by the non-partisan Civic Federation is also a cautionary note to the six mayoral candidates running in the Feb. 22 election, warning them not to succumb to the fiscal temptations and pitfalls that have led Mayor Richard M. Daley and the City Council to drag city budgets into the red since 2002.

"There is no magic wand for the next mayor," said Civic Federation President Laurence Msall. "They are going to have to face difficult financial decisions, and have to make up for the fiscal irresponsibility that has occurred in our pension funds and in overspending on our operating budget."

From his or her first day in office, Daley's successor should institute a freeze on all spending and hiring, and set to work on drafting a long-term financial plan that will guide the city's finances back into the black, Msall said.

But that feat is easier said than done. The Civic Federation is projecting the city will have to tackle a $500 million budget deficit for 2012, and the hole is getting harder to fill as officials continue to tap into the city's savings accounts to balance the budget.

And the budget problems that will face the city's next mayor haven't been eased much by its current one. In working to erase a record-high $654 million deficit for fiscal year 2011, Daley proposed just $97 million in spending cuts, but also proposed raiding nearly $288 million of the money the city received from privatizing the Skyway and its parking meter system, according to the report.

By the end of this fiscal year, the group projects that only $576 million will remain of the $2.98 billion the city has raked in since 2004 from the Skyway and parking meter lease deals.

Raising taxes, cutting city services, and slashing benefits for city workers may just be the beginning, Msall said. The report also urges the next administration to look into privatizing more city services, from garbage collection to payroll processing to the city's non-emergency call center.

The report also recommends the next mayor institute safeguards that would make it more difficult for deficit-desperate officials to burn through the city's savings. It says the next mayor must also come up with a plan to deal with the city's mounting pension obligations.

"When you have a budget deficit of over half a billion dollars, there are not going to be politically attractive and easy answers to solving it," Msall said.