On October 13, Mayor Daley unveiled his 2011 proposed City Budget. The Mayor’s plan to close the $645.8 million budget short fall includes a mix of bureaucratic reductions, reserve and TIF borrowing, and a tax decrease.

The proposed 2011 budget does not seek to raise any taxes, fees or fines, but does contain a decrease in the City’s employer’s expense tax (head tax). The expanded exemption would require payment of the head tax on all employees earning $4,300 per quarter (equal to the minimum wage earnings of a full time employee) up from the current $900 per quarter. The Chamber has consistently advocated for head tax reductions and the eventual elimination of this burdensome disincentive to job creation and economic growth.

During his speech to the City Council, Mayor Daley acknowledged more than 100 new businesses that have relocated to Chicago during the last couple of years including MillerCoors, Willis and Serious Materials.

He further committed to implementing an economic development plan announced in August to make Chicago a competitive global economy and continue recruiting additional businesses to move to Chicago and grow new small businesses.

Mayor Daley did announce that the City would move forward with a request for proposals to privatize the collection of recycling, festival management, and equipment maintenance. The privatization of festival management does include the City’s Taste of Chicago, which Mayor Daley used an example to emphasize the privatization is not a transfer of ownership, “They’ll simply be asked to manage them better, at a cost savings,” he said.

The City Council will conduct a series of Budget Hearings starting on Monday, October 18, 2010 and the public hearing will be held on Wednesday, November 3, 2010.

Some specific budget proposals include:

• Borrow $38.5 million from TIF fund surplus on 25 of 160 TIF Districts
• Cut $96.9 million in city personnel
• Borrow $21.6 million from Parking Meter Human Infrastructure Fund
• Create $2 million Small Business Fund to provide loans for start ups, expansions and day to day operations

Additionally the budget calls for the consolidation of departments:

• Cultural Affairs will merge with the Mayor’s Office of Special Events to become the Department of Cultural Affairs & Special Events.
• Community Development will merge with Zoning & Land Use Planning to become the Department of Housing & Economic Development.
• Zoning inspectors will move to the Building Department.
• Graphics & Reproduction will move into the Department of General Services.

To read Mayor Daley’s full budget address click here