Chicago Mayor Emanuel To Present Proposed Budget

Chicago continues to wrestle with a massive budget gap and severely underfunded pensions. Fresh off a negotiating tussle with the city's teachers and a school strike, Chicago Mayor Rahm Emanuel on Wednesday presents his proposed 2013 budget to the City Council.

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STEVE INSKEEP, HOST:

Here's a story we've been tracking for years. The recession left many cities struggling to find a fiscal balance. Chicago is among them, wrestling with a massive budget deficit and severe shortfalls in pension funds. Today, emerging from a school strike and bitter negotiations with city teachers, Chicago Mayor Rahm Emanuel presents his proposed budget to the city council. NPR's Cheryl Corley reports.

CHERYL CORLEY, BYLINE: This will be Rahm Emanuel's second budget for Chicago. When he crafted his first one, he faced a deficit of more than $600 million. This time it's less than half that amount but still daunting at 298 million. Emanuel hasn't provided too many specifics beforehand about what's expected to be a $6 billion spending plan for 2013, but he will say what the budget won't include.

MAYOR RAHM EMANUEL: It will not have an increase in property taxes. It will not have an increase in sales tax. It will not have an increase in fuel tax. We will hold the line on that two years in a row.

CORLEY: So the question remains what cuts are in store. There have been lots of suggestions about how to erase some of the city's red ink. Emanuel has held small gatherings with city residents and has invited everyone to send in ideas to a budget website. Some aren't pleased with that approach. Protesters at city hall criticized the mayor for refusing to hold public hearings. Amisha Patel, with a group called the Grassroots Collaborative, says many working families didn't have a chance for their voices to be heard.

AMISHA PATEL: And if you don't know how families are struggling, then your policies and your economic recommendations are certainly not going to address the needs of people who are in struggle.

CORLEY: Meanwhile, the city's police and firefighters are working under expired contracts. Labor costs make up the bulk of the Chicago operating budget. Some officials suggest cuts such as reducing the number of firefighters on fire trucks; that's wading into tough political waters. Lessons learned from a bitter dispute with Chicago teachers during contract negotiations may be helpful, but Chicago Alderman Pat O'Connor, Mayor Emanuel's floor leader, says the school strike isn't a good indicator.

PAT O'CONNOR: The Chicago teachers union unfortunately is one step removed from the city. It's not a city bargaining unit, if you will. Our success rate - in terms of bringing negotiations to a close, getting what we consider to be fair deals and deals that both the union and the city has approved - it's been a pretty remarkably good record over the last year.

CORLEY: Mayor Emanuel says some city business just needs to be done differently, like in garbage collection. He has to persuade Chicago aldermen, who must approve the budget, but he says he's going to continue making fundamental reforms.

(SOUNDBITE OF GARBAGE TRUCK)

CORLEY: I'm standing in one of the Chicago Streets and Sanitation district's parking lots where workers are emptying black garbage carts into a huge blue garbage truck. During this budget year, the mayor created a process where garbage is picked up on a grid system instead of by ward boundaries. It's expected to save the city millions of dollars.

Laurence Msall with the Civic Federation, a local government watchdog group, says there have been significant reforms and Chicago, under Emanuel, is starting to see slight increases in revenue.

LAURENCE MSALL: But nothing to the magnitude of the deficits that he faces.

CORLEY: Not just in the city's operating budget but also the unfunded liabilities in the city's four pension funds, more than $17 billion of promises made to city workers for which there are no assets. So although Msall says Emanuel's efforts at streamlining Chicago's budget are good...

MSALL: We are far from out of the woods in the city of Chicago financially.

CORLEY: And the mayor would seem to agree. The city's financial analysis says even under optimistic projections, Chicago will face an annual budget shortfall for several years.

Cheryl Corley, NPR News, Chicago.

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