Wednesday, September 15, 2010

How Can Chicago Fix its Budget Woes?

Alderman Brendan Reilly thinks he sees a way.  Alderman of possibly the City's most powerful Ward, the 42nd, Brendan Reilly was a guest on WLS-AM's Don Wade & Roma this morning, amid speculation that he may be mulling a run for Mayor.  Don Wade asked Reilly point-blank whether he would be running for the seat, and Reilly firmly stated that he would not be.  Reilly did, however, outline certain elements of running the City that he sees as important as we move forward, the biggest point of which is the necessary return of Zero-Based Budgeting, which has not been used in the City in decades.

What does this mean?  As Reilly explained, under the process of Zero-Based Budgeting, every department requiring funding must submit its budget for the year by starting from $0.00 and building it line-by-line, with justifications for each item.  I think to anyone who balances their own checkbook and keeps a monthly budget of their own expenses, this makes perfect sense.  But this begs the question, if the City's departments have not been starting from $0.00 every year, from where exactly have they been starting?

Reilly explained the answer to that question as well, indicating that, rather than beginning at the beginning, the City's departments have fallen into the practice of beginning from the previous year's end.  Currently, the standard of practice is for the City's departments to submit last year's budget, and request an increase.  The budget is reviewed and either the increase is approved, reduced, denied, or a reduction imposed on the department.  In such cases where a reduction is imposed, departments in large part go back and hack away indiscriminately to reach the percentage reduction, many times slashing programs that actually produce revenue.  The inference is that the process actually becomes self-defeating.

According to Reilly, returning to Zero-Based Budgeting would necessarily create more efficient departments.  In doing so, the City would see itself becoming slimmer, as it would begin to eliminate what he calls a fat layer of middle management in the bureaucracy.

After discussing the issue of Zero-Based Budgeting, Wade asked Reilly whether there was anybody in the field of mayoral candidates that he felt was up to the task.  Reilly sidestepped making any kind of an endorsement, but he did explain the kind of mayor he would like to see succeed Daley.  Rather than a mayor who is overtly political by nature, like Daley, Reilly indicated that he would like to see somebody in the position (maybe even a numbers geek!) with some executive managerial background, somebody that could step in and be a Chief Executive Officer for the City, to get the budget back on track.  Layered into his argument was a return to the power structure that the City was founded on, that being the idea of a strong City Council and a weak Mayor.  As caveat to this, Reilly also intimated that he'd like to see more managerial types on the City Council, to bring more fiscal pragmatism to the group.


  1. The city needs a professional manager. Unfortunately that's not going to happen in an election. I just hope someone gets elected who actually wants to fix the many problems we have rather than give shit away to his or her friends/family. It would be ideal to have someone like Claypool, but he's not running and I don't see anyone very independent-minded in the mix.

  2. As a city employee,we talk about a city wide audit all the time.Revenue in versus expenses out,what a concept.We see waste all the time and are afraid of speaking out.I like this idea of zero budgeting.All we ask for is a fair shake when then bidding process begins.You have a very talented work force here but we are a little short on leadership.No career pols need apply.

  3. Zero Based Budgeting is not the panecea that Reilly implies that it is. The issue is headcount. If you use zero based budgeting to eliminate positions that are not filled at the budget time or to eliminate any future hires, then it makes sense. If you use it to make a one year spend for a capital improvement to increase productivity and then eliminate the spend the next year, then it makes sense