CHICAGO - Chicago's revenue collections continued to slide over the last month, boosting the current budget shortfall by nearly $14 million to $64.3 million, Mayor Richard Daley's chief of staff, Paul Volpe, warned Friday.
"This downward economic trend will likely last throughout the year or longer, and despite our cost-cutting and improved management efforts, we are concerned that city revenue deficits could grow even larger," Volpe said.
The city's tax on real estate transactions continued to dip, with collections falling $11.8 million short of budget projections. The $3.3 million collected on the tax during February marked the lowest amount for a single month since 1996. Sales and income and cigarette taxes also fell short of projections, while utility taxes came in above estimates.
The city has enacted a series of cuts and management steps to trim the deficit down to about $33 million. Volpe's monthly updates are seen by some as setting the stage for seeking additional layoffs to help keep the $6 billion 2009 budget balanced.
Volpe has also warned that the city may need to further dip into a mid-term $325 million rainy-day reserve fund that was established with proceeds of the $1.2 billion lease of its parking meters. The city is already using $150 million from the fund, which is supposed to support the budget through 2012.
Chicago closed a $469 million combined deficit last year in its 2008 and 2009 budgets through a combination of tax increases, layoffs, debt restructuring, and proceeds of the parking meter lease and pending Midway Airport lease. Its $6 billion of general obligation bonds are rated AA by Fitch Ratings, Aa3 by Moody's Investors Service, and AA-minus by Standard & Poor's.