CHICAGO – Chicago Mayor Richard Daley yesterday named Chicago Transit Authority general counsel Eugene Munin as the city’s new budget director. He takes over the position as the city faces a $520 million deficit in the 2010 budget.
Munin, a certified public accountant, worked for eight years as a deputy city budget director before joining the CTA in 2004. The city last month announced it is facing a $520 million deficit next year. Daley’s budget will be introduced to the City Council in the fall. The $6.2 billion preliminary plan includes a $3.32 billion corporate fund.
“There is no more critical position in city government right now and I am confident that Gene is the right person for the job,” Daley said. The position has been open since Bennett Johnson III resigned in December. The city’s top fiscal chief is Gene Saffold.
Tax revenues currently are $147.2 million below budgeted levels, putting Chicago on course to close out the current year with a $301.7 million revenue shortfall. Officials have trimmed $70 million through spending cuts, fuel hedging, unpaid personnel furlough days and other personnel-related savings, and by restructuring the Skyway toll bridge escrow. At the same time, public safety costs are up.
To close what is estimated to now be a year-end $268.7 million shortfall, the city will dip into a rainy-day fund set up with a portion of the proceeds from its $1.15 billion lease earlier this year of its parking meter system.
Chicago will drain the fund of its remaining $50 million to help whittle down what would otherwise have been a looming $570 million deficit next year to $520 million. Officials attributed the red ink to a drop in revenues of $441.5 million from 2009 budgeted levels and $129.5 million in higher costs.
Income tax revenue is expected to fall by an additional $55 million and although recent reports suggest home prices have leveled off, the city expects a drop of $2 million in its collections from real estate transaction taxes. The latest projection assumes a 78% drop in the real estate transfer tax over its 2006 level of $242 million. Sales taxes are expected to fall by $25 million.
Fitch Ratings rates Chicago’s $6 billion of general obligation bonds AA, Moody’s Investors Service rates them Aa3, and Standard & Poor’s rates them AA-minus.
Daley announced Munin’s appointment along with several other department heads and a shakeup in management of the city’s program to increase minority-and women-owned participation in city contracts. He moved the program’s oversight to city’s Office of Compliance. It currently is under the Department of Procurement Services but has been plagued with scandal and the subject of federal charges as city contracts went to white-owned firms that portrayed themselves as minority owned. The mayor also named Jamie Rhee as chief procurement officer and Judy Martinez as new general services commissioner.