Chicago Mayor Daley to Delay Release Of Preliminary 2009 Budget Until Sept.

CHICAGO - Chicago Mayor Richard M. Daley said yesterday he would delay crafting a preliminary 2009 budget as the city grapples with declining revenues due to the national economic slowdown.

It is the first time in Daley's 19-year tenure that the city did not release preliminary budget numbers by July 31. The mayor wrote a new executive order pushing the deadline back to Sept. 30.

The delay gives finance officials more time to analyze revenue figures and cut spending, according to Daley.

"With this step we'll be able to implement management improvements and cuts in spending more responsibly," the mayor said in a statement. "To act responsibly we need to have the latest revenue data in order to craft a responsible budget for next year."

Blaming the national recession, Daley warned of a "major budget shortfall," which unofficial reports earlier this week put as high as $400 million.

Also yesterday Daley repeated his promise not to raise property taxes a year after the city implemented a record-setting 10% increase in the levy.

The shortfall heading into 2009 comes despite an additional $275 million in expected annual revenue from a series of tax and fee increases passed last November as part of the $5.9 billion 2008 budget.

Also yesterday the City Council approved several Daley-sponsored measures to trim spending across the board. One measure would require non-union employees to take unpaid vacation days before the end of the year, which would save the city an estimated $3 million.

Another measure, which is expected to save $6 million, eliminates non-union pay increases and offers non-union employees who agree to resign within the next month one-time payments ranging from $12,000 to $20,000. The city does not plan to rehire for most of those positions, and will fill critical positions with a lower, "entry-level" salary, Daley said.

About 90% of the city's employees are unionized, and the ominous deficit warnings come as the mayor gears up to ask the unions for unpaid vacation days and other cuts.

"The worse the economy becomes, the tougher the choices will be to balance our budget," the mayor said.

In March, the city ordered a hiring freeze for all positions except public safety, other essential jobs, and revenue-generating positions to achieve $11 million in savings and a 3% across-the-board cut in personnel costs to save $5 million.

Though the city has yet to detail revenue numbers, dips are expected in most economically sensitive revenues, such as hotel and sales taxes. Officials have long warned of a drop in the real-estate transfer tax, which is collected on real estate transactions. That revenue has plummeted as sales volume has declined roughly 30% this year in Chicago, similar to housing markets across the country.

Chicago's budget woes echo those of cities and states across the country, from Detroit to New York City, which this week announced its tax collections could dip by 5.9% in part due to the national slowdown.

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