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City of Chicago 2014 Budget Overview Mayor Rahm Emanuel The Government Finance Officers Association of the United States and Canada (GFOA) presented a Distinguished Budget Presentation Award to City of Chicago, Illinois for their Annual Budget beginning January 1, 2013. In order to receive this award, a governmental unit must publish a budget document that meets program criteria as a policy document, as an operations guide, as a financial plan, and as a communications device. 2014 Budget Overview Letter from the Mayor Dear Fellows Chicagoans, When I became Mayor, this City faced a projected deficit of $790 million in 2014. In the last two budgets, we’ve managed to cut that structural deficit in half. We’ve accomplished this by making our government smaller, smarter, and simpler. We’ve coupled necessary reforms with improved services so City government works better. The 2014 proposed budget builds on the solid progress we have made in changing the way Chicago works. We must put our finances in order without adding to the burden that Chicago families face today. That’s why, for the third year in a row, we have balanced the City’s finances without raising property, sales, or gasoline taxes. At the same time, this proposed budget includes continued investments in our children and our neighborhoods, and encourages economic growth. I believe that we all share a vision for Chicago: a city with thriving neighborhoods, a prosperous economy for all, and where people enjoy the same level of safety – no matter where they live. The journey to this shared vision is not an easy one. It requires tough choices and shared sacrifices. However, through continued reforms, this budget proposal keeps Chicago on a path of financial stability, and provides Chicago’s taxpayers with the quality services they deserve. Rahm Emanuel Mayor 2014 Budget Overview Table of Contents This Budget Overview is a companion to the other documents that together comprise the City’s annual proposed operating budget, all of which are avail- able on the City’s website - the 2014 Budget Recommendations, which contain the City’s proposed line-item budget, the 2014 Anticipated Grants Budget, and the 2014 Draft Action Plan, which relates to federal Community Development Block Grant funding. 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In 2011, Chicago was on track to have a $790 million deficit in 2014. Through reforms that reduced the cost of City Revenues services and made government work more efficiently, that HBQXBTDVUJOIBMGUPKVTUNJMMJPO Continued growth in the economy in 2014 is expected to increase City revenues without placing the financial burden This year, because of the choices made over the past two years on taxpayers. The City projects increases in revenues in and because of the structural reforms put into place, the City many of its most critical and economically sensitive revenue GBDFEUIFTNBMMFTUCVEHFUEFmDJUTJODFUIFSFDFTTJPO sources in the coming year. The proposed 2014 budget builds on that progress. A steady revival in the housing and commercial real estate This budget balances the City finances without raising markets is expected to lead to a 10 percent increase in real QSPQFSUZ TBMFT PSHBTUBYFT-JLFUIFCVEHFU JUNBLFT property transfer tax revenues; thriving local tourism is a significant investment in the education, health, and safety BOUJDJQBUFEUPDPOUSJCVUFUPBQFSDFOUJODSFBTFJOIPUFMUBY of the children of Chicago. It also enhances public safety and revenues; and overall growth in the economy and improving invests in the neighborhood businesses across Chicago that consumer confidence positively impact sales and income tax are so vital to providing local jobs and keeping communities revenue projections for 2014. strong. In 2014, revenue generated through the addition of In addition, because of the reforms made over the past year, automated speed enforcement devices to protect children the City is able to continue to build its reserves in order to and pedestrians near schools and parks will be dedicated enhance its long-term financial stability. The 2014 proposed to maintaining and expanding programs that improve the budget makes an additional $5 million investment in the safety of our streets and provide safe learning opportunities 2014 PROPOSED BUDGET SUMMARY $ Millions Table 1 2013 2014 % Budget Proposed Budget Change Corporate Fund 4% 4QFDJBM3FWFOVF'VOET Pension Funds 479.4 0% %FCU4FSWJDF'VOET 797.4 Enterprise Funds 9% Grant Funds 4% Total Resources Less Proceeds of Debt (95.0) - Less Internal Transfers - Net Appropriations $8,173.7 $8,672.1 6% Proceeds of debt issuances transferred between funds and reimbursements or internal transfers between funds are deducted from the total resources to more accurately reflect the City appropriation. Total resources include revenues generated during the year and prior year savings and available resources. 1 2014 Budget Overview Summary of Proposed Budget (continued) for Chicago’s children. These revenues will be used to fund programs such as summer and after school opportunities, early childhood education, homeless services for youth, and violence reduction and prevention. In addition, a proposed increase in the cigarette tax would fund an initiative to enroll $IJDBHP 1VCMJD 4DIPPMT $14 TUVEFOUT JO .FEJDBJE BOE QSPWJEFWJTJPOTDSFFOJOHTBOEFZFXFBSGPS$14TUVEFOUT 4ĒħĚğĘĤĒğĕ&ėėĚĔĚĖğĔĚĖĤ Even as revenues continue to grow, the City is continuously looking to make lasting structural changes to keep expenditures in check and its finances sustainable so that taxpayers can continue to receive the quality services they deserve. Through forward-thinking changes and reforms, $40 million of the 2014 budget gap was closed through instituting efficiencies and reducing departmental non-personnel spending. The City has put into place a 90-day rolling IJSJOHGSFF[FPOOPOFTTFOUJBMQPTJUJPOTUIBUJTFYQFDUFEUP save $2 million in 2014. The 2014 proposed budget also continues the process of evaluating vacant positions to determine if they can be eliminated. Over the past two years, this reassessment process has resulted in the elimination of more than 2,000 vacancies, which would otherwise divert resources from critical needs. The proposed 2014 budget Key Investments and Reforms also reflects savings from the first year of a three-year phase- out of City funding for healthcare benefits for some retirees. Programs for Children These changes to healthcare costs will save upwards of $24 The Mayor’s budget continues to invest in after school million in 2014, with additional savings achieved in 2015 PQQPSUVOJUJFTGPSOFBSMZ DIJMESFO8JUIBQFSDFOU BOE increase in funding since the Mayor took office, the City will TFSWFOFBSMZ NPSFDIJMESFO ɨF$JUZXJMMBMTPSFBMJ[FTBWJOHTBGUFSNPWJOHPċDFTGSPN leased spaces to City Hall and other downtown buildings; This budget also increases summer job opportunities for switching cellular phone carriers and eliminating unused youth. Federal government funding for summer jobs has landlines; re-negotiating contracts; and collaborating with been cut by 90 percent in the last three years, but Mayor Cook County to eliminate redundancies, coordinate service
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