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Rahm's Fiscal House

"City of Chicago debt payments are expected to soar by $278 million next year to the record level of $1.55 billion, according to a city financial analysis released Tuesday by Mayor Rahm Emanuel," the Tribune reports.

I hope we've learned by now not to trust any numbers coming out of the Emanuel administration, but then again, not learning that lesson helped get us into this mess in the first place.

"The debt problem began to grow a decade ago, under former Mayor Richard Daley. Overall city long-term debt has nearly doubled during the past 10 years as the city borrowed money to expand O'Hare International Airport, upgrade its sewer and water systems, fix streets and build new libraries and police stations. More than $1 billion also was borrowed to pay retroactive police and fire raises and cover legal judgments against the city. Payments are expected to surge in 2013 because of the way the debt is structured."

At the same time, while Daley was hardly a prudent or even attentive manager when it came to spending, these stories always forget the enormous fact that it was Wall Street's recklessness and greed that imploded the economy and is chiefly to blame for turning manageable problems into unmitigated disasters.

Now, however, we have every right to judge officeholders - including the president - for how they respond to crises we know they inherited but we hired to solve.


"The analysis indicates that Emanuel has continued the trend, started under Daley, of reducing the number of city workers. Payroll records verify that, showing the number of workers has dropped by nearly 1,300, to the current 32,925 employees, since Emanuel took office in mid-2011."

Is this really wise? Throwing 1,300 more people out of work is likely to hurt the local economy not help it, right? Democrats argue one thing nationally but behave differently locally. Yes, the city budget must be balanced, unlike the federal budget. But the city budget, as we have just seen, hasn't been balanced for a long time. And there always seems to be money for pet projects and corporate subsidies. We need a change of thinking. Otherwise it's just the same old game.


"Although the size of the city workforce has decreased by about 20 percent in the past decade, personnel costs have gone up by 14 percent, with rising wages and higher health care costs fueling that increase, the analysis states."

I'd like to see - and I haven't dug into the report so maybe it can be teased out of it, maybe not - if a rise in personnel costs are in any way the result of lower-wage employees being let go and while higher-wage employees get hired on and/or get even sweeter deals. There always seem to be raises on hand for the city's executives, who somehow need to be motivated in a way that the rank-and-file don't.


Meanwhile, the Sun-Times reports that "Worker's compensation costs now the subject of a jurisdictional dispute between Inspector General Joe Ferguson and Finance Committee Chairman Edward M. Burke (14th) have also continued their steady climb - from $58.4 million in 2003 to $114.5 million last year."

Typically, this is where the tough-talking Rahm goes wobbly.

"Mayor Rahm Emanuel refused Monday to take sides in the political battle between Inspector General Joe Ferguson and Ald. Edward M. Burke (14th) over access to information needed to investigate Chicago's $100 million-a-year worker's compensation program," the Sun-Times also reports.

Burke is the chairman of the council's finance committee, which administers the program.


"(Burke) has sole authority to process and settle workers compensation claims and handpick attorneys when claims are challenged."

In other words, the workers comp buck stops on Burke's desk. So do Rahm's balls.


"My budget is aggressive about reforming the worker's comp," Rahm said. "We're aggressively pursuing $15 million in savings from worker's comp. I don't need a report to do that. I know that it needs reform."

So worker's comp costs have gone from $58 million to $114 million and Rahm's working super hard to save $15 million. And he knows the program needs reform, he just doesn't want to know exactly what is wrong with it. That's leadership! He'd rather close mental health clinics than tangle with Ed Burke.


"The mayor has ruled out the politically toxic move of raising property or sales taxes, administration sources said," the Tribune reports.

It wasn't politically toxic during Rahm's campaign.

And he just raised property taxes - for the second time since coming into office.

Not according to the Trib: "But Emanuel avoided property and sales tax increases, which can prove politically fatal to government leaders."

And don't argue that the school budget is a different story; Rahm made the decision. And some funds are apparently fungible; the same Trib article reports that Rahm "also began shifting pension costs off City Hall's books to Chicago Public Schools."

Finally, keep your toxic and fatal remarks to yourself. I'm not arguing in favor of increased taxes, but embedding an anti-tax message as received wisdom into news stories only furthers a talking point and constrains terms of the debate.


And was now really the time to do this? Guess who makes up the difference.


Don't fear though, help is here. From Wall Street.


Comments welcome.


Posted on August 1, 2012

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