11/22/2010 01:08 pm ET Updated May 25, 2011

Mayor Daley Feasts on Another Budget Victory; Leaves Next Mayor With the Tab

The Chicago City Council last week handed Mayor Daley another victory when it voted overwhelmingly in favor of his proposed 2010 budget, handing him a perfect score. Of the 21 city budgets the mayor has proposed over the years, the City Council has approved each and every one of them with only a few changes on the edges.

This year, I joined six of my colleagues--Bob Fioretti (2nd), Leslie Hairston (5th), Sandi Jackson (7th), Rick Munoz (22nd), Scott Wagespack (32nd), and Brendan Riley (42nd)--in voting against the proposed budget.

This year's budget called for no tax increases and no significant further cuts in services. It's a perfect election year budget. So what's not to like?

It's the large pink elephant in the room called the "structural deficit." Simply put, we're spending far more on services than we're collecting in revenues. This is not a new phenomenon. We've been spending more than we've been collecting for years, even during the so-called boom times in the late 90s and early 2000s.

But we've papered over those budgets with a series of one-time revenue sources and other budgetary gimmicks. In the last few years, the Mayor's favorite one-time revenue source has been the proceeds from the long-term lease (de facto sale) of the Skyway and the parking meters.

In fact, by the end of 2011, only $76 million of the parking meter lease proceeds will remain. That represents only seven percent of the original $1.15 billion payment. Put another way, 93 percent of the proceeds from this 75-year lease will have been spent in only three years.

Each year the structural deficit was ignored it got worse and worse. Next year it's likely to approach a billion dollars or more. And my guess is we'll have to do a significant mid-year correction in the budget.

The Mayor projects $91.3 million in "more favorable revenues" this year. Perhaps his economists know something we don't know, but it's hard to believe the city's economy is going to experience any significant upswing next year.

He also counts on $32 million in savings from furlough days taken by unionized employees. Yet, the Mayor's people have made no attempt to reach out to labor to determine if they are on board with this plan. Chances are they're not.

With no more rabbits to pull out of the hat, the new mayor and City Council will be confronted with a fiscal crisis almost from the moment they take their oath of office.

Absent from the budget debate was any real honest discussion with Chicago's voters and taxpayers. Here are the cold and unvarnished facts. Future years' budgets cannot be balanced without significant cuts in services and/or tax increases, probably a combination of both. Because we've avoided having this discussion for so long, the cuts and tax increases will hurt.

The challenge for next mayor and City Council is to make every effort to ensure that the service cuts and tax increases are as fair as possible, with those most able to endure them carrying the heaviest burden.

Before we do that, however, we need to shine a bright light on the way we do business in Chicago. The next mayor and City Council will not be able to summon the necessary political support for the inevitable painful decisions that must be made as long as the public believes that waste, fraud and inefficiency run rampant in Chicago.

Truth be told, you could eliminate every ounce of waste, fraud and fat from the city budget and we'd still be faced with a yawning deficit. But that's no excuse for ignoring the millions of dollars that are wasted.

Conducting a forensic audit, doubling the Inspector General's budget and establishing an independent City budget office modeled after New York's independent budget office will send a powerful message to Chicago's taxpayers that we are finally serious about safeguarding their hard-earned tax dollars.

Finally, we need to involve the residents of Chicago in making these difficult budgetary decisions and we need to do so in a very meaningful way. "Dog and pony show" budget hearings will no longer suffice.

Last year I engaged in a bold experiment in my ward. I gave my constituents the power to decide by popular vote how to spend $1.3 million in discretionary dollars I get to spend in my ward on infrastructure projects. Known as participatory budgeting, this nearly year-long effort engaged my constituents in a real conversation about the trade-offs necessary in making tough budgetary decisions.

I found out that when you give people the information they need and meaningful time to thoughtfully deliberate, they end up making very good budgetary decisions and, more importantly, become invested in those decisions.

The next mayor and City Council should adopt some of the elements of participatory budgeting in next year's budget deliberations. It's time to treat the residents of Chicago with the intelligence they deserve and give them real power to make real decisions.