Chicago city hall

The Chicago Sun-Times Fran Speilman reports the grim news on Chicago’s city budget:

Chicago’s 75-year, $1.15 billion parking meter windfall would be nearly drained in just one year to provide token property tax relief and stave off tax increases, thanks to a $6.1 billion 2010 budget approved Wednesday.

Despite complaints that Chicago’s future was being mortgaged, the City Council voted 38-to-12 to approve Mayor Daley’s plan to drain reserves generated by asset sales to solve the city’s worst budget crisis in modern history.

“We haven’t made 12 months and I guess we’ve reached eternity,” said Ald. Tom Allen (38th), noting that parking meter reserves were billed as a “perpetual replacement fund” when the deal was rammed through a year ago.

There are two especially crummy parts in Chicago’s new budget. First, the whole point of the privatization of parking meters –  topic 1A among Daley critics this year — is that interest collected from the reserve fund would replace millions in lost parking meter revenue each year.  Second, even with raiding the reserve funds, the city is still making a ton of cuts — 24 furlough days for employees, another delay in implementing a citywide recycling plan.

What Daley and the city council could have done differently is not privatize the parking meters in the first place. But then, it’s not clear where the money for even the existing budget comes from (the answer, I guess, would be property tax increases).  Obviously the recession will make almost any political decision unpopular. But a culprit here is the federal government, which doesn’t have to pass a balanced budget, yet doesn’t bailout of state and local governments, which do need to balance revenue and spending.

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