CFL News
October 13, 2011

Emanuel Budget Calls for Cuts and Higher Fees

Mayor Emanuel's 2012 budget includes cuts, fee increases, layoffs but also a massive water infrastructure project over the next decade

Source: Chicago News Cooperative

By Dan Mihalopolous

The water and sewer bill for the average household in Chicago will go up $120 in 2012 — a 25 percent hike — and rise by a further 15 percent in each of the next three years, according to the budget documents released Wednesday by Mayor Rahm Emanuel’s administration.

In his first annual budget speech to aldermen, the first-year mayor emphasized that he did not propose raising property taxes or the sales tax rate, and he noted that he wants to halve the tax that companies pay on each employee.

Still, Emanuel’s proposal to close a projected $636 million shortfall in 2012 included many revenue-raising moves that will affect the pocket books of Chicagoans. A day after giving a sneak peak to aldermen in closed-door briefings, the Emanuel administration revealed details of how it wants to increase a long list of fees, including city stickers for sport-utility vehicles and trucks. Owners of larger vehicles would pay $135, or $60 more than drivers of standard-sized cars, who will see no increase in their sticker fees.

The mayor said SUVs and trucks cause the vast majority of the damage sustained by streets. Some of the increased fees that their owners would pay would be earmarked for filling the city’s potholes.

Downtown businesses with loading zones would pay $500 instead of $100, even as the size of the standard loading zone is trimmed by five feet, from the current 25 feet.

The city also would reap $28 million by charging a “congestion premium” of $2 on every car that parks in downtown garages and lots.

And city property owners should prepare to pay more in fines for such violations as uncut weeds, drag racing and “over-accumulation of refuse in containers,” according to budget documents.

(Read The Bottom Line, CNC’s series examining budget pressures facing Emanuel)

But perhaps the most ambitious proposal in Emanuel’s budget speech was his 10-year plan to replace all 900 miles of Chicago’s century-old water pipes and upgrade the sewer system.

The mayor said Chicago water rates would remain among the cheapest in the Great Lakes, and the rate hike would amount to “five cups of Dunkin’ Donuts coffee a month” in the first year. He also said the project would create “18,000 good-paying jobs.”

“This will be one of the largest infrastructure projects in the country initiated by a city,” Emanuel said in his 30-minute speech to City Council members.

While “revenue enhancements” would raise $78.8 million in 2012, the vast majority of next year’s project budget shortfall of about $636 million would be bridged through what the administration’s plan described as “cutting spending and reforming government.”

The cutbacks will include laying off 500 city workers and closing three of Chicago’s 25 district police stations.

“Closing police districts has always been the third rail of Chicago politics, but that should not stop us from doing what’s right,” Emanuel told aldermen, adding that public safety departments could no longer enjoy their long-time immunity from budget cuts.

Another politically unpopular cost-cutting move that Emanuel put forward would re-draw the city’s boundaries for collecting garbage, a system that has been based on the lines between wards. Aldermen long have opposed the notion of grid-based waste pick-up, a sentiment that Emanuel acknowledged before saying: “We cannot cling to a garbage system based on politics rather than cost.”

Continuing his campaign theme of bringing a business-like mentality to running City Hall, Emanuel said FedEx and UPS would not base their routes along political lines.

“We have always done it that way because we could afford to, but we cannot afford it any longer,” the mayor said.

Without mentioning his predecessor, Richard M. Daley, by name, Emanuel again discarded Daley’s defense that the poor general economic climate was to blame for the city’s perennial budget woes. Emanuel said the recession “added to the crisis,” but he noted that Chicago had been spending beyond its means for a decade, since long before the economy soured.

“Chicago cannot afford this kind of government any longer,” Emanuel said. “We can’t kick the can down the road because we have run out of road.”

Click here for the complete budget and other supporting documents

Click here for a Sun-Times analysis of the 517 proposed layoffs in the 2012 budget