CHICAGO — Mayor Rahm Emanuel presented a preliminary 2013 budget Wednesday that adds police officers but doesn't raise taxes.
Emanuel unveiled his $8.3 billion budget at a special meeting of the City Council Wednesday morning. It called for no new fees or taxes while adding 457 police recruits.
Emanuel's budget office closed an estimated $370 million shortfall, in part through $70 million in health-care savings and $67 million in government cuts and reforms, along with $45 million in expected revenue increases, thanks to the improving economy.
Emanuel contrasted the city's rising homicide rate with a declining crime rate overall, but said he would keep the Chicago Police Department "at full strength at all times."
"At first blush, it looks like a very solid budget," said Ald. Joe Moore of the 49th Ward in Rogers Park. "Who can argue with a budget that has no tax increases and no layoffs and increases services?"
"Chicago is known as 'The City that Works', and this is our opportunity to deliver a budget that works for our taxpayers," Emanuel said. "This is a budget that allows us to make critical investments by reforming government instead of raising taxes. As I pledged, we will not raise property taxes, we will not raise sales taxes, we will not raise the fuel tax, we will not raise the amusement tax. We will, however, cut the employee head tax."
First instituted by Mayor Richard J. Daley in the mid-'70s, the head tax — $4 a month per employee for what is now 27,000 city businesses with more than 50 employees — was cut in half in the 2012 budget and will be eliminated by the end of 2013, according to Emanuel's plan.
The budget includes other business-minded reforms, including a new Small Business Center and streamlined licensing.
Emanuel also said the city was bucking a nationwide trend in cutting funds for education and children by "investing in our children" through augmented early childhood, after-school and summer jobs programs.
Fraternal Order of Police President Mike Shields, however, said adding 457 recruits doesn't offset the annual retirement of about 500 officers.
"It's basically treading water from last year," Shields said. "Do you want to have the same amount of officers as 2012? If the answer's 'yes' we're going to maintain that title of homicide capital of the nation."
He said the department was still down 350 detectives, resulting in low clearance rates for homicides and gang shootings.
The budget expects higher revenues with an improved economy, but does not address the city's pension shortfalls.
"It's not bad," said Ald. Ariel Reboyras of the 30th Ward. "But I think the worst is yet to come if we don't take care of this pension business."
Moore called the pension shortfall "the 65,000-pound canary" in the budget debate.
"The mayor has proposed a reasonable plan that helps reduce the city's structural deficit," said Laurence Msall, president of the Civic Federation, a business-oriented government watchdog. Yet the 2014 budget will present immense difficulties, he said, starting with $700 million owed for police and firefighter pensions.
"The city is far from out of the woods financially," Msall added, "and the pension crisis is very real."
Emanuel's 45-minute budget address was generally upbeat, but closed on the note that, within four years, the city's pension obligation will reach $1.2 billion — 22 percent of the budget. He urged the General Assembly to adopt statewide pension reforms to relieve the impending crisis.
"We can't tax our way out of this pension mess," said Ald. Edward Burke, chairman of the Finance Committee.
Reaction to the budget proposal was generally favorable, although Ald. Scott Waguespack (32nd) called for "more substance" in actually pinning down the budget figures.
City Council budget hearings begin Tuesday on a schedule to adopt the 2013 budget in mid-November.
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