Best way to end Chicago’s budget woes

Economic development
Here’s our situation in a nutshell. The cost of running the city has been greater than the money coming in for a while, and it’s been getting worse each year. The city is prevented by law from running a deficit, which is how the federal government addresses this problem. So the city gets around the law with a couple of tricks: one, it tweaks the system to allow it to put less money into the pension system for city workers than the system needs to fund the obligations it is incurring for current workers and, two, the city finds ways to convert a stream of future revenues from a particular source, say parking meters, into a lump-sum payment today, which can then be applied to the budget shortfall. Both are short-term fixes that create long-term problems. The under-funded pension fiasco is already coming home to roost; privatization is limited by what resources you can find a market for. Privatization is also a particularly dangerous fix during times of operating deficits, since it offers an “easy” Band-Aid but means that future revenue streams are gone: if the money is spent, as it has been in recent cases, future budget shortfalls will be exacerbated for years to come. (Privatization is not inherently bad and can offer a mechanism for monetizing underpriced assets, like parking, where political will might not be strong enough for the city to simply realize the value itself through sharp price increases. But the money must be banked for the future, not spent now.) Cutting government budgets seems to be the political cause du jour at all levels of government, and years of stories about ghost payrolls, nepotism and other poor uses of city funds makes it seem especially apropos locally. And we agree that budgets should be brought in line with revenues through cuts, but only as a gradual, future process, not all at once. The all-at-once approach would do more damage than good, since the great majority of city costs are payroll. Cutting jobs, or reducing pay in this economy, will only add to our economic woes. Likewise raising taxes on mostly middle-class workers. Needless to say, we’re in a real fix. The holy grail is to increase tax revenues without tax increases, and the only way to do that is through economic development, to bring jobs and companies into Chicago. Not necessarily Fortune 500 types; they require so many concessions and are often so quick to outsource jobs to other countries that the return on our investment is risky. No, we need to cultivate small-business development, with the hope that creating a fertile environment for innovation will yield another Groupon or two, as well as hundreds of mini-Groupons. Sadly, this cannot be done overnight, but it needs to start right now. And meanwhile, perhaps, we can explore a legislative change to allow the city to operate at a deficit for a certain number of years, rather than forcing it to make deals with the devil to get by.

Audience choice:
Legalize and tax marijuana
Others that were mentioned a few times, amused us or seemed especially weird:
“Tax the rich, sell everything, stop privatizing”; “Sell naming rights to El lines. I suggest the Apple Red Line, the Southwest Orange Line, the United Blue Line (assuming it doesn’t go Chapter 11), the Victoria’s Secret Pink Line, the Mello Yellow Line, the UPS Brown Line.”; “Departure tax when Oprah packs up and leaves for California”; “Fire all Daley’s nephews.”; “Stop wasting money on stupid things like those inflatable bouncy germ factories that the city has for certain residents.”

Best of Chicago 2010