city of chicago 2016 budget forum - wttw news · 2017-07-12 · draft - staff policy deliberation -...
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Draft - Staff policy deliberation - Not for circulation
City of Chicago
2016 Budget Forum
Malcolm X College
Monday, August 31, 2015
Draft - Staff policy deliberation - Not for circulation
Budget Forum Speakers
• Mayor Rahm Emanuel
• Juan Salgado, Moderator
• Reverend Albert D. Tyson, III
• City of Chicago Finance Team
• Carole Brown, Chief Financial Officer
• Alexandra Holt, Budget Director
Draft - Staff policy deliberation - Not for circulation
City of Chicago Budget Facts
Fiscal Year: January 1 – December 31
Legal Requirements Must be approved by December 31 Must be balanced—revenues must match spending
Size Over $8.9 billion budget for the City of Chicago in 2015
This budget provides services including: police officers, firefighters, snow removal operations, garbage and recycling collection, street paving, public libraries, airport operations, water and sewer maintenance, afterschool programs
Does not include Chicago Public Schools (CPS), Chicago Park District,
Chicago Transit Authority (CTA), City Colleges, or Chicago Housing Authority (CHA)
Combined budgets of the City of Chicago along with CPS, Chicago Park District, CTA, City Colleges and CHA totals almost $18 billion
3
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Where the Money Comes From
4
2015 Budgeted Revenue
Grants 17%
Airline Fees 15%
Sewer & Water Fees 13%
Property Taxes 10%
Other Local Taxes
9%
Other Non-Tax Revenue
8%
Sales Taxes 8%
Other Resources 5%
Utility Taxes 5% Income Taxes
5%
Fines and Penalties 5%
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Where the Money Goes
5
2015 Budgeted Expenditures
Police, Fire, 911 25.2%
Other 0.4%
Debt Service for Airports, Water and
Sewer System 10.0%
Employee Benefits 12.7%
Finance and Administration
6.8%
Airports 8.4%
Roads, Bridges, Graffiti Removal, etc.
10.4%
Water and Sewer 6.8% Community Services
6.4%
Economic Development
2.1%
Legislative and Elections
0.6%
Permitting, Inspections, Licensing
0.8%
Debt Service for Infrastructure
9.4%
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Addressing the Challenges Ahead
6 Yearly Operating Budget Shortfall
($220.4)
($94.1)
($64.5)
($217.7)
($420.0)
($519.7)
($654.7) ($635.7)
($369.0)
($338.7)
($297.3)
($232.6)
($700)
($600)
($500)
($400)
($300)
($200)
($100)
$0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
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Addressing the Challenges: Reforms Before Revenue for Every Budget
7
($5
2.1
)
($8
3.1
)
($4
14
.1)
($1
42
.3)
($2
41
.6)
($2
58
.5)
($1
68
.3)
($9
4.1
)
($6
4.5
)
($2
17
.7)
($4
20
.0)
($5
19
.7)
($5
71
.6)
($2
21
.6)
($2
26
.7)
($9
7.1
)
($3
8.8
) ($220.4)
($94.1) ($64.5)
($217.7)
($420.0)
($519.7)
($654.7) ($635.7)
($369.0)
($338.7)
($297.3)
($700)
($600)
($500)
($400)
($300)
($200)
($100)
$0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
One-Time Resources
Reform/Recurring Revenue
Gap
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Addressing the Challenges: Reforms and Savings
8
2012 budget: $246 million
2013 budget: $66 million
2014 budget: $84 million
2015 budget: $81 million
Starting with the 2012 budget, the City has used real structural reforms
and lasting savings to close operating shortfalls each year
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Addressing the Challenges: Ending Bad Financial Practices
COMPLETED
Terminated all risky interest rate swaps to eliminate risk for taxpayers
Converted general obligation variable rate bond debt to fixed rate to reduce risk for taxpayers
Stopped raiding reserves to fund general city operations
IN PROGRESS
End practice of using debt restructuring to pay operating expenses by 2019
Increase use of operating funds to pay for legal settlements and judgments
Invest in City’s rainy day fund
Since 2012, the current administration has invested $45M in the City’s rainy day fund
9
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Addressing the Challenges: Reforming Tax Increment Financing (TIFs)
TIF is a funding tool used by the City to promote public and private investments across Chicago including: roads, bridges, affordable housing, schools, parks and economic development
Currently 147 active TIF districts citywide, down from 162 active TIF districts in 2011
More than 95% of TIF commitments under the current administration has supported public projects, such as schools, transit, economic development projects, and affordable housing
Recent Reforms on TIFs:
Freeze new spending in downtown TIFs and sunset them when the current and committed projects are paid off
Making the Mayor’s TIF surplus permanent law; building on the $300 million in TIF surplus allocated to local governments since 2012
10
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Growing Pension Payments and Legacy Debt
Despite the many savings and efficiency improvements and structural reforms, significant financial challenges remain – both operating and legacy
Wages and benefit costs continue to grow
Pension payments and liabilities are growing
Legacy debt must be addressed
11
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Addressing the Challenges this Fall
12
$232.6 million operating shortfall in 2016; lowest since 2008
$328 million additional contribution for 2015 public safety pension obligations
$93 million incremental increase in pension costs for all four pension funds in 2016
$100 million debt repayments to start ending practice of “scoop and toss” in 2016/restructuring debt obligations and pushing payment off in future years at a higher interest rate
Draft - Staff policy deliberation - Not for circulation
Community Dialogue
Or send us your ideas via email at: [email protected]
Share your ideas on social media using the hashtag: #ChiBudget2016