“…ALL HE LEFT US WAS ALONE…”

10/14/11

Earlier this week, Mayor Rahm Emanuel formally revealed his previously well leaked budget to the press. (See my 10/13/11 piece, A SPECIAL PICKUP, for some background on one aspect of the budget.) Despite all the, in most cases, justifiable talk of change in Chicago under Mayor Emanuel, at least one thing hasn’t changed around this town: The City Council will rubber stamp this budget, continuing the time-honored Chicago tradition of bleating obediently like the lambs that they are when the mayor, be his name Daley or Emanuel, demands whatever he feels necessary, or just desirable. But I digress.

The Mayor, citing the desperate budget situation his predecessor and sponsor bequeathed him, has proposed increases in water and sewer fees, “congestion fees” on downtown parking, increased city sticker fees for politically disapproved vehicles, and all manner of methods of reaching into the taxpayers’ already nearly empty pockets. Fair enough; the city has, even using the phony-baloney accounting most public entities use, a projected $600mm plus shortfall this fiscal year, and closing a yawning gap of that size will require some tax (er, sorry, fee) increases. However, in announcing these various stickups of the taxpayers, the Mayor nearly simultaneously announced a variety of uses for the money. For example, some of the revenue from the “congestion fees” will be used for a new Green Line station on Cermak Road and for express buses linking our commuter rail stations with north Michigan Avenue. Some of the money from the increased water and sewer charges will be used to dramatically pick up the pace on replacing and refurbishing water pipe and sewers. Such spending is designed to mollify taxpayers, showing them that they are actually getting something for the increased spondulicks they are forking over to the Mayor and his sycophants in the city bureaucracy and Council.

A non-politician, however, might ask how we are going to address the city’s budget problems if we are spending the new revenue generated on new projects, even spending on seemingly worthy projects. We were told we had to come up with more money because Mayor Daley (er, sorry, the woeful state of the national economy, to hear Mr. Daley tell it) left the city in such a fiscal pickle. But now we are being told that the extra money will be used to give us things like better water (Chicago water is already the best in the world, by the way.) and new and better el stops. So what gives?

Doubtless Mayor Emanuel, and his budget, says that only a portion of the increased fees will go to various improvements in the infrastructure and that most, or at least a substantial chunk, of the revenue will go to balancing the budget. But one would hope that the citizenry is not sufficiently naïve to think that things will work out as planned. Here in Chicago, or anywhere, for that matter, public spending projects almost never come in at or under budget; consider, for example, Millennium Park.

Yes, yes, I know; Mayor Emanuel is Superman, so the media tell us, and the days of cost overruns, etc., are over. Okay; let’s concede for a moment that Uber-Manager can keep these projects at or under cost. The new Green Line Station is projected to cost $50mm ($50mm!!!!! Wow! Must be a nice station, but I digress.) and the downtown express bus system is projected to cost $30mm. The “congestion fee” is supposed to bring in $28mm. Suppose a modern day version of the conversion of water into wine takes place and these numbers turn out to be right. Those two projects will account for nearly three years of revenue from the tax (sorry, fee) that’s supposed to finance them. And, yes, as a former bond guy, I understand that we are only supposed to look to the congestion fee to service the bonds necessary to pay for the aforementioned improvements and only a portion of the $28mm will be necessary for debt service. Still, we are not talking small dollars here and such a financing method involves piling more debt on an already indebted city. Yes, yes, I know, it’s capital improvement debt, not operating debt, and therefore it’s good debt. Right.

Any way you look at it, much of the new money raised by the Emanuel fees will go toward new spending, not to pay the bills Mr. Emanuel’s political Godfather has already left us. In a sense, Mr. Emanuel may be following much more closely in his sponsor’s footsteps than the new Mayor would have us believe, leaving us with plenty of debt to service, debt used to finance projects the main objective of which is to assure his continuation in office. Only, in Mr. Emanuel’s case, the ultimate objective may not be remaining in his current office but burnishing his image to the point at which he can seek higher office…and be safely out of town before the bills come due.