The annual Chicago city budget process is trite and predictable. It is also negligent and irresponsible in several important ways, failing to address the core problems of the city’s finances.
Here’s how it goes.
Just before an autumn deadline, the mayor’s office releases a budget projection for the next year. It shows an alarming deficit but gives hope that money can be found to fill the gap. City Council members react by pleading for their fair share of city resources, whether for the South and West sides, ailing LaSalle Street or a potpourri of other pet projects. Then, there are a series of performative public meetings where officials cordially ignore citizens. The mayor’s office eventually uses creative accounting and storytelling to “balance” the budget, the council approves the budget and all is well.
Meanwhile, even though the city passes a balanced budget each year, as it is required to, Chicago’s net position — liabilities over assets — worsens. In the 10 years ending in 2022, the net position ballooned from minus $3.8 billion to minus $27.6 billion.
[ Editorial: Brandon Johnson’s formidable budget hole ]
What is taboo to talk about are the following:
First, the city spends too much on just about everything.
Big departments such as police and fire spend way more than those of other comparable big cities. Chicago spends $784 million for our Fire Department, and Los Angeles spends $835 million. But LA has 45% more people and double the flammable land area. If we had parity with LA, we would save $200 million. We spend $15 million on the Chicago Civilian Office of Police Accountability — equal to the $15 million spent on the mayor’s office.
Second, of the four main budget approaches — incremental, activity-based, value proposition and zero-based — Chicago uses only the first. Why don’t council members look at every line item and ask what Chicago gets for what taxpayers spend?
To practice activity, value or zero-based budgeting would require a robust effort by the council to investigate the performance and management of every department of city government. In a sense this is what the U.S. Department of Justice and the mayor’s commission did when they looked at the Chicago Police Department, leading to the current consent decree.
Why doesn’t the council look at every department that spends more than $10 million? Or dig into how police settlements are managed? (Last year, these cost the city $126 million.) They could do this directly or hire one of Chicago’s many consulting firms. This should be routine, not episodic.
Third, there is the longtime practice of failing to use generally accepted accounting principles in budgeting. It is irregular to include proceeds from bond issues as revenue. It is preposterous to count the savings from refinancing bonds as revenue.
Fourth, Chicago perennially skimps on including maintenance costs in the budget. Then, every new mayor calls for a capital bond issue to try to catch up. The previous mayor swept these expenses into a $3.7 billion program. Not all the money borrowed for the capital campaign will keep up city assets. One example: O’Hare International Airport, which looks shabby inside and out.
And finally, the city never budgets for contingencies. Every year, Chicago is visited by an unexpected fiscal surprise. This year, it is the cost of managing the influx of migrants. Last year, it was lead pipes. Households, businesses and construction contracts budget for contingency. Not the city.
So why does the City Council ignore these major elements of good budgeting? In part, it’s because, even though it is called a City Council, Chicago really has a confederation of neighborhood chieftains. Aldermen are too busy with the preoccupations in their wards to look at the big picture.
Perhaps the more important reason that the council doesn’t ask the big questions is that aldermen are afraid of the answers. To tackle these big problems after decades of budget mismanagement is to stare into an abyss. Maybe this is why they fail to adequately fund the Council Office of Financial Analysis.
Meanwhile, the council goes its predictable way and sings the same old song. Looking without seeing. Begging without asking. Voting without thinking. No one disturbs the sound of silence.
Ed Bachrach and Austin Berg are co-authors of “The New Chicago Way: Lessons from Other Big Cities.”
Submit a letter, of no more than 400 words, to the editor here or email letters@chicagotribune.com.
Ed Bachrach and Austin Berg: Why does Chicago ignore good budgeting practices?
2
0
08.11.2023
The annual Chicago city budget process is trite and predictable. It is also negligent and irresponsible in several important ways, failing to address the core problems of the city’s finances.
Here’s how it goes.
Just before an autumn deadline, the mayor’s office releases a budget projection for the next year. It shows an alarming deficit but gives hope that money can be found to fill the gap. City Council members react by pleading for their fair share of city resources, whether for the South and West sides, ailing LaSalle Street or a potpourri of other pet projects. Then, there are a series of performative public meetings where officials cordially ignore citizens. The mayor’s office eventually uses creative accounting and storytelling to “balance” the budget, the council approves the budget and all is well.
Meanwhile, even though the city passes a balanced budget each year, as it is required to, Chicago’s net position — liabilities over assets — worsens. In the 10 years ending in 2022, the net position ballooned from minus $3.8 billion to minus $27.6 billion.
[ Editorial: Brandon Johnson’s formidable budget........
© Chicago Tribune
visit website
login
who are we?
contact us
qosheapp
Toi Staff
Gideon Levy
Belen Fernandez
Andrew Mitrovica
Mort Laitner
Rami G Khouri
Ali Fathollah-Nejad
Nikkei Editorial
