The best way to handle Chicago`s 1988 budget problem was laid out early this year by one of the candidates for mayor. His agenda was tough-minded but fair, balancing demands among city taxpayers, city workers and the city administration.
Despite the payroll cuts of the last four years, he said, ”There is still waste in the budget. We`ve got to strive for a government that is tighter, more austere, really serious about productivity increases.
”We`ve got to be hard-nosed with the unions. I`m not saying we should cut wages, but we`ve got to rework the benefits package and do something in the state legislature about pension costs. I think labor is becoming aware of the plight of cities and will be reasonable about this.”
Chicago can`t tolerate new taxes, he said. It`s got to make do with the ones now on its books and lobby for more revenue for all Illinois
municipalities through a statewide tax increase.
The candidate with that firm, fair fiscal plan was Harold Washington. It will be interesting to see whether he will repeat in October, when his `88 budget is due, what he said in March, when he was running for re-election. The mayor already has flopped on two points in his agenda. He made no attempt to form a public-private coalition to lobby for modifications of the very generous pension plans mandated by the state legislature. And he did little to help Gov. Thompson get a state tax increase. The city`s 1988 budget would be at least $15 million richer if the Illinois income tax had been restored to its 1984 level.
The mayor may be able to patch together a balanced budget if he sticks to the rest of his campaign agenda, but it will take more energy and persistence than he has mustered so far in this second term.
He will have to resist pressure to fill the current 2,000 vacancies in the city`s work force, even though that may mean delays and cutbacks in services. His revenue department will have to collect an extra $20 million or so from the deadbeats who don`t pay parking fines, a 50 percent improvement over its past dismal performance. That`s not impossible, based on what other cities do, but Gov. Thompson made it much more difficult by vetoing a bill to crack down on scofflaws. And the mayor will have to keep the city`s property tax rate at its current level, gaining about $56 million from new construction and higher assessments. This will provoke howls from homeowners and businesses whose real estate increased in value. But Chicago is one of the few major cities without a municipal income tax, a distinction most of its taxpayers seem to like. As a result, though, it has to rely on property and utility taxes to keep pace with rising costs.
If the mayor manages all of that, he will have a balanced 1988 budget next month. There will, however, be one bit of unfinished business. The budget will have no money for raises. Negotiations with all the unions that represent the city`s 38,000 workers open about the time the mayor has to give his spending plan to the city council. It`s a normal bargaining tactic to show zero dollars for wage increases in a budget proposal. In this case, it`s also a necessity.
A combination of lost federal aid, a low level of state help and new expenses for pensions, waste disposal, debt retirement and start-up costs for a central public library will absorb all the extra revenue generated by freezing the property tax rate and cracking down on scofflaws.
If the unions want wage increases, there are just two acceptable places to find the money. The mayor singled them out in his campaign agenda. Bringing the city`s health benefits package in line with those in private industry, coupled with some additional trims in the work force, may produce enough savings to pay for modest raises. And ”modest” should mean no more than about 3 percent. Chicago`s wage levels, on the average, already rank high compared with other cities and the private sector.
That`s a tough bargaining stance. But as the mayor said in March, public- worker unions must acknowledge the ”plight of cities,” just as many of their private-sector counterparts have acknowledged the plight of American industry. The unions can expect raises through savings in their benefits package. They cannot expect to get them through tax increases. That`s what candidate Washington said last spring, and that`s what Mayor Washington should repeat this fall.
