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Watchdog budget options: Tolls on LSD, city income tax, privatized garbage

Just in time for budget season, Chicago’s City Hall watchdog agency is putting forth more than $2.8 billion in spending cuts and revenue hikes – from imposing a city income tax to charging tolls on Lake Shore Drive to privatizing trash collection – in order to ease a massive budget deficit.

In his latest menu of “budget options,” Inspector General Joe Ferguson’s office lays out 63 ideas to mitigate a projected $635 million city budget deficit for 2012. The options hit both sides of Chicago’s balance sheet, and range from often-discussed policy proposals to pie-in-the-sky political non-starters.

The single largest-netting option is imposing a city income tax, which the report estimates could bring in $500 million a year to the city’s coffers. Another $450 million could come from broadening the city sales tax to include more services, while raising water and sewer rates could net $380 million a year, according to the report.

As for spending cuts, the report estimates Chicago could save $190 million by cutting nearly 1,400 management jobs in city government, including more than 700 firefighters and more than 300 police officers. Privatizing the garbage collection for all city households – something Mayor Rahm Emanuel has suggested on a smaller scale – could save another $165 million.

Some of Ferguson’s ideas could enjoy support from the Emanuel administration. Collecting trash based on a grid system, rather than ward-by-ward, was an idea Emanuel mentioned during his campaign, for example. That could save the city nearly $47 million a year, according to the report.

But other ideas seem likely to be dead-on-arrival at City Hall. Proposed revenue increases could butt up against the mayor’s pledge to tackle the city’s budget crisis without raising taxes. And while the report identifies millions of dollars in potential revenue from other sources, some could prove politically toxic: doubling the city ambulance fee ($13.2 million), imposing a toll on Lake Shore Drive ($87.5 million); and axing free sewer service for seniors ($17 million).

Last year, city officials gave the inspector general’s budget ideas an icy reception. Some aldermen complained when the report was dropped on them in the final week of city budget hearings, and the Daley administration suggested the watchdog agency should keep its nose out of budget talks.

In a letter to city officials this year, Ferguson said he isn’t advocating for any one budget idea, but looking to spur public debate at a time when Chicago can no longer rely on cash-strapped state and federal governments for fiscal help.

“This will require difficult choices,” he wrote.­

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