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Mayor Richard Daley warned Wednesday that service cuts might be required to balance next year’s city budget.

The mayor’s annual State of the City speech marked the first time he has held out cutting services “permanently or for a year or two” as an option to dig out from a $655 million budget shortfall. Daley previously has acknowledged that all possibilities to fill the budget hole other than a tax increase were on the table.

“We cannot balance the budget through better management and growing revenues alone,” Daley told a ballroom packed with aldermen and other city officials at the Chicago Hilton.

As he considers running for a record seventh term in February, Daley’s 40-minute speech touched on many of the accomplishments that he said have made Chicago a stronger city.

He cited improvements in test scores this year and falling dropout rates as evidence Chicago schools are getting better.

Recent agreements to bring Wal-Mart stores to the Pullman and Chatham neighborhoods will create thousands of jobs and bring in millions of dollars in tax revenue, Daley said in the first of several lines that drew applause from the friendly audience.

Daley also laid out a template for what Chicago needs to do to remain economically competitive. He talked about transforming Chicago’s economy in part through “Chicago Growth Accelerator,” a privately funded job training and business incentive program he announced to bring technology companies to the city. In a comparison he brings up often, Daley urged Chicagoans to think like China, “20 or 25 years down the road in planning their economy.”

It needs to be easier for businesses to get permits and licenses in Chicago, Daley said.

“Government should not stand in the way of business growth,” he said.

And Chicago schools need to be able to provide the employees with the skills to work in those businesses by providing practical, technologically based educations, he said.

Though he has not said whether he will run again, the mayor’s eye toward the future had several aldermen in attendance predicting he will be on the ballot early next year.

Ald. Latasha Thomas, 17th, said Daley sounded like a politician who wants to be in office to get some of the ideas he discussed rolling.

“Everything he said had future goals attached to it,” Thomas said.

And Ald. Daniel Solis, 25th, said the mayor might be the only one capable of making the ambitious plans a reality.

“If those are going to get implemented, he’s the person to do it,” Solis said.
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Source: The Chicago Tribune

City Hall would need to be “very careful” in using economic development funds to fill a $654 million budget hole, Mayor Daley said Saturday, while refusing to rule it out.

The funds “were never intended to [shore up] budgets — I mean you have to be very careful there,” he said at a ribbon-cutting on the Southwest Side. “You have to look at everything. You just can’t say, ‘That’s the answer.’ ”

The mayor’s comments keep open a door city Budget Director Gene Munin cracked Friday. Munin suggested the administration won’t rule out tapping funds from tax-increment-financing districts — TIFs — to help shore up the city’s crumbling financial state. In those districts, now numbering 159, a portion of property tax is set aside for area redevelopment.

Audits show Chicago TIFs held a collective $1.2 billion by the close of 2009.

About $500 million of that money, Munin said, is committed to projects, leaving about $700 million unallocated. That last number is just slightly more than the $654.7-billion shortfall the city unveiled last week as part of its preliminary 2011 budget.

City Hall could move to declare all or some of that unspoken-for TIF money as surplus. Taking that step would allow it to inject its share of the surplus — more than $140 million — into its revenue stream. City Hall would then have to divvy up the rest of the $700 million between a host of local government agencies.

Tapping TIFs might challenge the viability of social service programs, Daley said, at the same time ruling out tax or fee increases as a way of balancing the budget.

“If you take all the money out of TIFs then there’s no money next year,” he said. He was also lukewarm to the suggestion of privatizing Midway airport given the weak seller’s market.

“The economy is getting worse every day,” the mayor said Saturday, “again, you have to look at the long term, what do we use TIFs for? Building new schools, for parks, for employment in communities; we use TIF money for training people, for ex-offenders — how can they get a job if they don’t have any training. You have to set your priorities and we have to talk about it. It isn’t one over the other, these are all priorities in the city.”

Addressing other issues Saturday, Daley said he has now sent a letter to Michigan Gov. Jennifer Granholm offering assistance after last week’s massive oil spill in the Kalamazoo River.

Daley on Thursday demanded Michigan’s attorney general launch a criminal investigation into the spill that dumped a million gallons of oil into a waterway leading to Lake Michigan.

He noted that the State of Michigan was quick to react to the Asian carp scare, filing a series of lawsuits demanding that the O’Brien and Chicago locks be closed to shipping, a move that could cost Illinois $4.7 billion in the next two decades by one estimate.

“Oil is worse than carp. Oil basically destroys your drinking water,’’ Daley fumed.
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Source: The Chicago Sun-Times

City Hall faces a budget shortfall next year of $654 million, Mayor Richard Daley’s top budget officials told aldermen this morning.

The large gap is a result of continued weak tax revenue, rising city worker pay rates, union contract settlements and the costs of lawsuits, said Ald. Robert Fioretti, 2nd, who attended a meeting of aldermen and the budget officials, including Chief Financial Officer Gene Saffold and Budget Director Eugene Munin.

Saffold and Munin plan to brief the media at noon, and city budget officials declined to comment before then.

It’s the second year in a row that the city faces a shortfall of more than half a billion dollars, but this year the city has less in reserve to help close the gap.

So the Daley administration is looking for new, so far unspecified ways to make up the difference, Fioretti said. Some aldermen recommended taking money out of tax increment finance district funds dedicated to rehabilitating blighted neighborhoods, but other aldermen spoke out against that idea.

Aldermen, including Fioretti and Ald. Richard Mell, 33rd, made it clear that they want to see more police officers hired.

“If anything came out of it, one thing they heard loud and clear is keep our streets safe and increasing the ranks is the most important priority here,” Fioretti said.

Last year, Daley relied mostly on onetime funding sources to close the gap.

He pulled $102 million out of a rainy day fund created when the city leased its parking meter system for $1.15 billion. And he “borrowed” $270 million in parking meter funds intended to generate revenue for the 75-year life of the lease.

He also used other parking meter and Skyway lease funds, as planned, to cover costs in this year’s $6.2 billion budget. By the end of the year, the city will only have $223 million left from the proceeds of the parking meter lease.

The city this year also saved $118 million by refinancing debt. Much of the remaining 2010 budget gap was closed by getting some union and all non-union workers to take a total of 24 days off work without pay — which city officials said today would remain the same next year.

But city costs not anticipated in this year’s budget have made the city’s financial condition in these tough economic times even more uncertain.

After an arbitrator settled a police contract dispute, the city owes $160 million in back pay. When firefighters settle their dispute, they could be owed up to $40 million.

As a result, the city plans to borrow money to cover those costs and $45 million to $100 million it will owe as a result of a U.S. Supreme Court ruling in a lawsuit brought by black applicants for firefighters’ jobs who said the city’s 1995 entry exam discriminated against them.

In May, Daley ruled out raising property taxes to close any gap in next year’s budget. He stuck to a similar pledge last year. City elections are in February, and a tax increase so close to decision day would be politically unpopular.

The mayor each year issues his preliminary budget by the end of July and then goes to a series of community meetings in August to get citizen input. People who attend those sessions typically raise a myriad of concerns but rarely address the budget itself.

Daley’s full budget proposal for next year is due in October. The City Council then holds hearings and votes on the budget by the end of the year.
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Source: The Chicago Tribune

Mayor Richard Daley today asked the City Council to kick in $98 million toward a housing and shopping development on part of a massive former steel mill on the Southeast Side lakefront.

The city would take out bonds to be repaid using property taxes generated by the development on the site of the former U.S. Steel South Works, south of 79th Street along Lake Michigan.

The long-discussed development of the 500-acre site has been moving forward slowly, with the City Council recently approving the construction of condominiums, apartments and a million square feet of commercial property on the northern 77 acres.

The city has agreed to cover the cost of laying roads and putting in other infrastructure on the now barren land, which the bonds would cover.

The mayor’s proposal heads to the Finance Committee for further consideration.
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Source: The Chicago Tribune

Mayor Richard Daley’s administration is making plans to limit the number of handguns allowed in Chicago homes as it grapples with a U.S. Supreme Court opinion gutting the city’s long-standing gun ban.

Each qualified gun owner in a home could have only one handgun under a new ordinance being drawn up that could be heard by the City Council Police and Fire Committee as soon as Thursday, officials said. The ordinance would require handgun owners to register their weapons with the Police Department and keep them secured inside the home.

The measure also likely would force gun owners to take safety training classes, undergo a criminal background check and obtain liability insurance, city officials said. City Hall also is mulling a formal ban on gun shops, said Mara Georges, the city’s top attorney.

“Reducing the number of handguns in Chicago is critical to public safety,” Georges said. “The same concerns that motivate a one handgun per person per residence limit — reducing the number of guns in circulation in Chicago and the risk of illegal traffic in guns — motivate the gun dealer ban.”

Chicago makes it tough to open a gun shop because the city has outlawed the display of guns for sale. There are no city stores that sell guns — but 45 suburban outlets that do within 13 miles of the city, Georges said.

The scramble to pass new gun restrictions took place at a hearing the day after the U.S. Supreme Court struck down the city’s gun ban, enacted under then-Mayor Jane Byrne in 1982. Despite the ban, Chicago continues to struggle with gun violence.

City officials are trying not to cross a fine line. The Supreme Court ruled that citizens are entitled to keep handguns in their homes for self protection, but also said “reasonable” restrictions could be placed on handgun ownership.

Pro-gun groups that backed the lawsuit overturning the ban said they are watching Chicago to make sure the restrictions are not unduly burdensome or costly to citizens exercising their Second Amendment rights as interpreted by a closely divided top court.

“We are trying to figure out how far we can go and survive a (legal) challenge, because we know it will be challenged,” Georges said.
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Source: The Chicago Tribune

A South Side alderman who has long advocated building the city’s second Wal-Mart in his ward says he plans to make “a big announcement” later today about the retail giant building more stores in Chicago.

But several other aldermen and union officials said they are unaware of any new agreement with Wal-Mart, and Ald. Anthony Beale, 9th, would not specify what he plans to discuss at his news conference.

The idea that a deal was reached “is ridiculous,” said Jorge Ramirez, secretary treasurer of the Chicago Federation of Labor, adding that there are plans for Wal-Mart and union officials to meet this afternoon.

Beale “set up a press conference just to get ahead of it in anticipation that something good would come out of it,” Ramirez said.

Asked if he expected an agreement this afternoon, Ramirez said: “There’s no telling. We honestly don’t know. We haven’t had any communication with them since the beginning of May.”

Beale has long been at the center of negotiations with Wal-Mart, even while trying to maintain ties to the unions that oppose more Wal-Mart stores without the Arkansas-based retailer agreeing to pay a higher minimum wage than other businesses.

In May, as the City Council mulled a proposal to build a Wal-Mart that would anchor the proposed massive Pullman Park development in Beale’s ward, Wal-Mart met with union officials for the first time — but no deal was reached.

Wal-Mart long has agreed to a community benefits agreement and hiring union labor for construction, but it has not agreed to the higher minimum wage sought by unions.

In December, Mayor Richard Daley said the tough economy and resulting dearth of jobs made the time right to allow Wal-Mart to expand beyond its sole city location in the Austin neighborhood on the far West Side.

That statement reignited a political firestorm first sparked in 2004 when the City Council approved the Austin store but rejected another on the South Side, with aldermen saying it would depress wages and put smaller, local stores out of business.

Two years later, aldermen approved an ordinance mandating that large retailers like Wal-Mart, Target and Home Depot pay a higher minimum wage than other businesses. The mayor vetoed that measure.

The unions then poured millions of dollars into the 2007 elections for aldermen and defeated several Daley allies, even as the mayor won reelection in a landslide.

But the message was sent, and the mayor’s administration has not signed off on any more Wal-Marts where the proper zoning already was in place, saying he wanted council approval. Pro-union aldermen have blocked any such agreement.

Meanwhile, Wal-Mart in recent months has launched a public relations campaign, taking out advertisements boasting of how well it treats its employees — even as the world’s largest retailer has proved to be a national lightning rod for criticism in that area.

At last weekend’s Puerto Rican Day parade, Wal-Mart distributed fliers and fans that said new jobs would come with new stores.

The first real test of its efforts could come as early as Thursday, when the council Zoning Committee could vote on the proposal for the Pullman Park development. It has already heard testimony, but Chairman Daniel Solis, 25th, put off a vote in the hope that Wal-Mart and the unions would continue to talk.

Daley recently met with Wal-Mart officials, who told the mayor that if they could build the massive Super Wal-Mart stores they had proposed, they also would build smaller stores to sell groceries in the city’s food deserts — areas where grocers have abandoned business, making it tough for local, often poor residents to buy fresh food, source said.

But that tactic may have backfired, with some pro-union aldermen grousing that Wal-Mart should have put that proposal on the table right from the start.
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Source: The Chicago Tribune

As Chicago awaits a U.S. Supreme Court ruling this month that could overturn its 28-year-old handgun ban, City Hall is considering a host of countermeasures that might set off another round of legal fights with gun advocates.

In an interview with the Tribune, Mayor Richard Daley acknowledged an uphill battle against the gun industry, which he described as the most powerful lobby in the United States. Even so, he vowed that in the event residents are allowed to have handguns at home, the city would take steps to ensure that officials can account for the weapons.

The mayor said his primary goal would be to protect police officers, paramedics and emergency workers from being shot when responding to an incident at a home. He said he also wants to save taxpayers from the financial cost of lawsuits if police shoot someone in the house because the officer felt threatened.

“If the ban is overturned, we will see a lot of common-sense approaches in the city aimed at protecting first responders,” Daley said. “We have to have some type of registry. If a first responder goes to an apartment, they need to know if that individual has a gun.”

The city is looking closely at models adopted in Washington, D.C., after the Supreme Court struck down its handgun ban two years ago and in California, which has some of the most comprehensive gun laws in the nation.

Chicago already requires registration of rifles and shotguns, which are legal in the city, and those regulations could easily be applied to handguns, according to the city’s corporation counsel, Mara Georges. The city also has the option of rewriting its current ordinance to include stronger, more controversial measures, such as databases that track a gun from the manufacturer to the gun shop to its current owner, and ballistic fingerprinting, which requires manufacturers to test-fire guns and keep a record of the unique ballistic markings left on bullets and shell casings.

Gun control advocates said such requirements can help law enforcement identify guns that are linked to crimes. But gun rights advocates said such requirements deter law-abiding citizens from obtaining guns and lead to further litigation.

“What cities need to realize is that the 2nd Amendment is a normal part of the Bill of Rights,” said Alan Gura, the lead attorney representing plaintiffs in the case against Chicago being considered by the Supreme Court. “Laws that can be justified as having a real solid public safety purpose that don’t interfere with people’s rights, those will survive.”

Gura also represented plaintiffs in the District of Columbia lawsuit in 2008.

Daley said he likes all aspects of the D.C. law and that Chicago could look there for ways to strengthen its licensing procedures. After its gun ban was overturned, the district adopted stringent requirements for prospective gun owners, including a four-hour class on firearm safety, at least an hour of firing training and passing an exam. The newly purchased gun also must undergo ballistics identification firing by police.

Next year, the district will require semi-automatic pistols to be micro-stamped, a controversial technique in which serial numbers are marked on cartridge cases that can be traced back to registered gun owners. California also has adopted a requirement for micro-stamping, a technology that was recently developed and is not yet in use. New York’s legislature is considering a micro-stamping bill.

The NRA and other gun advocates said such measures could lead to a national database of gun registrations, which they oppose. And they said much of the new technology is unproven or ineffective.

“The D.C. City Council has made it nearly impossible for people to purchase and register firearms in the district,” said NRA spokeswoman Rachel Parsons. “That’s stepping on the Supreme Court decision that the 2nd Amendment is an individual right.”

Gun advocates have lawsuits pending across the country challenging laws enacted after the district’s gun ban was struck down. Two aspects of Chicago’s firearms registration law — that guns be registered before the purchaser takes ownership and that gun owners re-register weapons every year and pay an annual tax — are also being challenged in the gun ban lawsuit. Attorneys said it is unlikely the Supreme Court will rule on those issues at this time, leaving the city open to further litigation.

Daley, who has made gun control a cornerstone of his administration, said he and other mayors struggle daily with the common philosophy that places too much value on guns and too little emphasis on the consequences of gun ownership.

“What has happened in this nation is we really believe that guns are better than the law to settle things,” the mayor said. “We’re not talking about hunters and gun collectors, but this whole idea that America should be governed more by guns than by the law. That really disturbs me.”

The federal government, Daley said, has abdicated its responsibility of regulating interstate commerce in guns and placed that burden on local governments, without giving them leeway to make decisions based on situations in their own communities.

“It’s their responsibility, not ours,” Daley said. “Guns come here from other states, and we have to figure out how to respond to it.”

The result, he said, is that the gun industry now has “carte blanche” across America.

Juliet Leftwich, legal director for the San Francisco-based Legal Community Against Violence, said Chicago could have a unique opportunity to fill the gaps in federal and state law. Gun dealers, for example, must have a federal license, but they are only minimally regulated by federal or state law, she said.

Requirements such as background checks for gun store employees, liability insurance and zoning restrictions could help to better regulate gun sales, said Leftwich, whose gun control group helped D.C. rewrite its law and has been in contact with Chicago.

There are no licensed firearms dealers in the city, and such regulations could keep Chicago from seeing an influx of dealers if the handgun ban is overturned, according to Georges.

“Much of the reason gun dealers haven’t opened shop is because if they were to do so, as soon as someone were to purchase a handgun and take it out of the shop, they would be in violation of the city’s ordinance and subject to arrest,” Georges said.

She said the city could ban firearms dealers altogether or make gun shops subject to extremely tight regulations with requirements such as reporting what kind of guns they are selling and to whom they are selling them, perhaps even requiring such reports daily.

The Supreme Court declined to establish clear standards for regulating guns in the D.C. case, leaving it open to interpretation and further court challenges, legal experts said. While the Chicago case is expected to establish law on gun bans for every state, no one expects all the regulatory questions to be answered.

“Chicago has a great deal many restrictions already on the books. It is difficult to see how they could get them much tighter even if they wanted to,” said Gura, the attorney challenging Chicago’s gun ban. “Hopefully, the city will sit down with the court decision and read it carefully to make sure the city’s laws are constitutional.”
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Source: The Chicago Tribune

Chicago public high school students will be able to take online courses this summer for classes they failed, in a move Mayor Richard Daley hopes will save money.

Thirty high schools around the city will keep their doors open so students can use computer labs to retake the classes they need to advance to the next grade, Daley said Thursday at a news conference at Chicago Military Academy in the Bronzeville neighborhood. It’s part of an expansion of the Web classes made available over the summer by Chicago Public Schools.

Certified teachers will teach the online classes, but schools CEO Ron Huberman said the district will save money by allowing a single teacher to teach a course to students around the city.

“There is no part of this program that violates our collective bargaining agreement (with teachers) in any way,” Huberman said.

“You have certified teachers teaching the courses. It just may be a lot more students behind the screens who are learning from that certified teacher,” he added.

Huberman and Daley said they don’t know how many fewer teachers will be required to teach online summer school than traditional classes.

Extra-motivated students also will be able to take advanced classes for credit on computers at home or elsewhere, an option Daley said will help the schools take advantage of technology without increasing costs.

“Just think, online, you can go to every public library and use it, to any of these 30 public schools and use it,” Daley said. “So there’s always opportunities out there for every child and parent to take advantage of it.”
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Source: The Chicago Tribune

More than 160,000 Chicago homeowners left money on the table — in some cases, as much as $200 — by failing to apply for a property-tax relief program that Mayor Richard Daley pushed to be included in this year’s budget.

City Hall said about 200,000 homeowners could apply for the money, but records show only 36,621 applications were filed by the March 31 deadline.

That means the city stands to pay out less than $4.5 million of the $35 million set aside for the payments, which start at $25. There also will be promotional and administrative costs. So far, less than $900,000 has been paid out to 6,991 homeowners, officials said.

The money is coming from Daley’s much-criticized $1.15 billion lease of the city parking meter system. When Daley promoted the property-tax relief idea last fall, some aldermen questioned the value of spending millions on a program they said would do little, if anything, to help cash-strapped homeowners.

“It was a political gimmick, and the voters saw it for what it was,” said Ald. Joe Moore, 49th. “Most people didn’t even see any value in taking the time to apply for it.”

Daley has been criticized by some aldermen and budget watchdogs for relying too heavily on the parking meter proceeds to balance recent budgets. Much of the one-time windfall was supposed to be set aside. So, some aldermen aren’t lamenting the small number of property-tax rebate applications.

“I guess the good news is that we didn’t spend as much of our reserves on this gimmick,” Moore said. “The bad news is the mayor probably has more to raid for next year.”

The administration, however, is satisfied with the number of applicants to the heavily promoted program, said a spokesman for the Office of Budget and Management.

“You can’t expect everyone who is potentially eligible to make an application, and we’re satisfied with the results,” spokesman Pete Scales said. “Thousands of people got property-tax relief.”

Aldermen initially balked at approving the program, but the opposition withered after Daley suggested homeowners could politically punish aldermen who voted against it.

Daley said it is designed to blunt the impact of the phasing out of a state law that limited property-tax increases caused, in part, by rising home values.

That break, which ended this year in Chicago, was recently reauthorized by the General Assembly, in an effort fraught with political implications as November elections approach. It awaits the signature of Gov. Pat Quinn.
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Source: The Chicago Tribune

Mayor Richard Daley reacted coolly Monday to a suggestion the National Guard be called in to help slow the violence on Chicago’s streets, suggesting the idea offered up a day earlier by two state representatives was too simplistic.

“You have to look at long-term solutions,” Daley said, adding he understood the “frustration” expressed by the legislators.

“You just can’t think you’re going to fix it in one weekend and walk away,” Daley said. “And that’s what the problem would be.”

Daley’s remarks came a day after state Reps. John Fritchey and LaShawn Ford, both Chicago Democrats, suggested Gov. Pat Quinn dispatch the National Guard to Chicago to quell the violence, at a time when the city’s murder rate is up slightly from the same time last year but still much lower than it was a decade ago.

Quinn also downplayed the idea, saying it could be counterproductive to police efforts, as law enforcement officers and military personnel are trained differently. He wouldn’t take the step unless Daley asked him to, he added.

Quinn took pains to defer to the mayor, perhaps recalling that Daley two years ago suggested that ousted Gov. Rod Blagojevich “should be careful” when he suggested sending in the National Guard.

“It is, I think, imperative that any governor work always with local law enforcement,” Quinn said. “The notion of trying to step in, in any way step on the toes of people who are on the front line every day fighting crime in tough neighborhoods, I think is really not the way to go.”

Mark Donahue, president of the city police union, said more police officers are needed, at a time when hundreds are retiring while hiring is slowed.

“Members of the Chicago Police Department can handle the situation with the proper resources,” Donahue said. “Right now, the proper resources needed are more police officers.”

Donahue also said police officers are schooled in the federal and state constitutions.

“With the Guard coming in, it’s making a statement that your constitutional rights will be diminished,” he said. “They don’t have the training that Chicago police officers do.”

The mayor also sounded his familiar theme of needing more gun control laws and suggested Fritchey and Ford back him in those efforts.

“This is all about guns, and that’s why the crusade is on,” Daley said. “We hope to get their cooperation in Springfield.”

Daley declined to completely dismiss the idea, saying all ideas for quelling violence should be entertained, but he also noted a host of complicated issues that would ensue if the Guard were called in.

“You put them on for a weekend, without ammunition?” he asked. “Think of the repercussions you have to look at. … A fully automatic weapon?”

Daley made his comments minutes after delivering opening remarks at the Richard J. Daley Global Cities Forum, attended by dozens of mayors stretching from suburban Channahon to Johannesburg, South Africa.

This year the conference is focused on public-private partnerships.
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Source: The Chicago Tribune