Chicago s Budget CENTER FOR TAX AND BUDGET ACCOUNTABILITY. Presented by: Ralph Martire Executive Director

Transcription

1 CENTER FOR TAX AND BUDGET ACCOUNTABILITY 70 E. Lake Street! Suite 1700! Chicago, Illinois 60601! direct: ! Chicago s Budget Presented by: Ralph Martire Executive Director 1

2 In 2013, Illinois total Gross Domestic Product was $720.7 billion. The Chicago Metropolitan Statistical Area Accounted for $590 Billion or 82% of the economic activity in-state in Illinois in Source: Bureau of Economic Analysis

3 City of Chicago Budget Six Funds 1. Corporate 2. Enterprise 3. Special Revenue 4. Debt Service 5. Pension 6. Grant

4 City of Chicago Budget Analysis Corporate Fund (General Fund): The Corporate Fund finances many diverse activities such as police and fire protection, trash collection and disposal, and health programs. It is the largest fund. Enterprise Funds: Funds to account for acquisition, operation, and maintenance of government services such as water, sewers and the airports. These funds are typically self-supporting in that they derive revenue from user charges. Special Revenue Fund: A fund established to account for the operations of a specific activity and revenue generated from carrying out this activity, such as major capital projects. Debt Service Funds: Used to account for the accumulation of resources for, and the payment of, long-term debt and related costs. Pension Trust Funds: Used to fund the City s four pension funds (police, fire, labor, and municipal employees). The City makes payments to the Pension Trust Fund from its property tax collections as required by state statute. **Grant Funds (non-local revenue): Funds in which revenue comes from the state, federal government, and private entities. Grant Funds revenue is used for specific purposes that are required by the entity giving the funds. 4

5 Chicago Local Revenue History $5,500 $5,000 $4,500 $ Millions $4,000 $3,500 $3,000 $2,500 $2, Corporate Fund Local, Non-Corporate Funds (excludes Grant Funds) A recent, and interesting trend is the increase in the amount of local, non-corporate Fund revenue. Part of the increase in local, non-corporate Fund revenue is attributable to increased water rates that first began in

6 Chicago Budget by Fund Appropriation Summary ($ Millions) 2015 (Enacted Nov. 2014) 2015 (with Supplemental) 2016 Proposed Year to Year Change (nominal $) Year to Year Change (%) Corporate Fund $3,534.1 $3,534.7 $3,632.8 $ % Special Revenue Fund $619.7 $619.7 $ $ % Pension Funds $557.1 $885.7 $978.3 $ % Debt Service Funds** $826.4 $826.4 $ $ % Enterprise Funds $2,449.4 $2,459.8 $2,548.8 $ % Grant Funds $1,556.8 $1,568.1 $1, $ % Total $9,543.5 $9,894.4 $10,036.5 $ % *Less Debt Proceeds -$95.3 -$95.3 -$77.1 *Less Reimbursements between funds -$ $ $638.8 Net Appropriation $8,896.0 $9,236.5 $9,320.6 $ % * These are monies that are simply transferred between the six funds that make up the City s budget. ** Debt Service Funds do not include all debt service payments. Debt service on bonds is also paid via Enterprise Funds. Total debt service in FY2016 is $1.879 billion. 6

7 FY2015 Proposed Supplemental Appropriation ($ Millions) Pension Fund 2015 Budget as Passed (November 2014) 2015 Appropriation, with proposed Supplemental Difference Police $194.1 $420.0* $225.9 Fire $96.3 $199.0* $102.7 Labor** $24.0 $24.0 $0 Municipal** $242.7 $242.7 $0 Total $557.1 $885.7 $328.6 *Proposed supplemental appropriations for the police and fire pension funds assume Senate Bill 777 is signed into law. **Pension contributions for Labor and Municipal are based on Public Act

8 Required FY2015 Police and Fire Pensions Impact of SB777($ Millions) Pension Fund Budgeted Contribution (SB777) Required Contribution Current Law Difference Police $420.0 $592.9 $172.9 Fire $199.0 $246.1 $47.1 Total $619 $839 $220 8

9 Required FY2015 Labor and Municipal Pensions Impact of PA ($ Millions) Pension Fund Budgeted Contribution (PA ) Required Contribution Current Law (CTBA Estimate) Difference Labor $24.0 $17.2 ($6.8) Municipal $242.7 $131.5 ($111.2) Total $266.7 $148.7 ($118) 9

10 Chicago 2016 Budget Spending Corporate Fund ($3.6 Billion) Emergency Management and Communication; 3% Transportation; 2% Fleet Management; 5% Streets & Sanitation; 5% All Other Departments; 10% Police; 38% Fire; 16% Finance General; 21% 10 Finance General includes: employee benefits, workers compensation, payment of judgments, and expenditures that apply to multiple departments (like IT services).

11 City of Chicago Corporate Fund Revenue History ($ Millions) $1,800 $1,600 $1,400 $1,200 $1,000 $800 $600 $400 $200 $ (est) 2016 (est) Proceeds and Transfers In Intergovernmental Transfers Non- Tax Revenue Local Taxes 11

12 City of Chicago 2016 Budget Revenue Corporate Fund ($3.6 Billion) Proceeds and Transfers In 1% Local Taxes includes: Public utility taxes City s sales tax Transaction taxes Transportation taxes (ex. garage tax, vehicle fuel tax) Recreation taxes (ex. amusement tax, liquor tax, boat tax) Business taxes (ex. Hotel tax) Local Taxes 46% Intergovernmental Transfers 22% Non- Tax Revenue 31% Intergovernmental transfers: Revenue from state sales tax Revenue from personal and corporate income taxes Revenue from personal property replacement tax 12

13 Corporate Fund Largest Revenue Sources Revenue Category Revenue Source Estimate 2015 Revenue ($ Millions) % of Total Corporate Fund Revenue Local Non-Tax Revenue Fines, Forfeitures and Penalties $ % Intergovernmental Revenue State Sales Tax $ % Local Tax Chicago Sales Tax $ % Intergovernmental Revenue State Income Tax $ % Local Tax Personal Property Lease Transaction $ % Intergovernmental Revenue Personal Prop Replacement Tax $ % Local Tax Real Property Transfer $ % Non-Tax Revenue Non-Tax Revenue Enterprise Funds (Internal Service Earning) Special Revenue Funds (Internal Service Earning $ % $ % Non-Tax Revenue Fines, Forfeitures & Penalties $ % 13

14 2013 Property Tax Extension Cook County 14

15 2016 Chicago Property Tax Levy by $1.26 Billion Library Library; 7% Pensions Pensions; 62% Long Term Debt Long Term Debt; 31% 0% 10% 20% 30% 40% 50% 60% 70% 15

16 City s Pension Systems as of FY2013 ($ Millions) Pension System Assets Liabilities Unfunded Liability Funded Ratio Current Employees Retirees Labor $1,354 $2,391 $1, % 2,844 2,727 Municipal $5,114 $13,857 $8, % 30,647 20,113 Police $3,054 $10,282 $7, % 12,161 9,194 Fire $991 $4,136 $3, % 4,685 2,883 City Combined $10,514 $30,666 $20, % 50,337 34,917 16

17 Funded Ratio History for the City s Pension Systems 17

18 City Pension Contribution Projections ($ Millions) $1,800 $1,594.1 $1,635.0 $1,600 $1,422.7 $1,400 $1,193.1 $1,302.9 $1,329.0 $1,200 $1,000 $1,020.6 $1,140.9 $975.8 $1,146.2 $1,226.8 $1,260.1 $1,295.1 $800 $885.7 $ City's Pension ContribuGon- - Mayor's Office EsGmates (based off SB777 and PA ) City's Pension ContribuGon- - Current Law 18

19 City of Chicago s 2016 Pension Contribution ($ Millions) Labor Municipal Police Fire Total What City Has Budgeted* $28.5 $275.2 $464.0 $208.0 $1, City s Required Contribution Under Current Law $18.5 $162.5 $675.8 $284.1 $ Difference $10.0 $ $ $76.1 -$165.2 *City s budget contribution is based on (i) the required contributions to the police and fire pension funds per Senate Bill 777; and (ii) the required contributions to the labor and municipal pension funds per Public Act While SB777 has been passed by the General Assembly it has not been sent to the Governor. PA was ruled unconstitutional by Circuit Court Judge Rita Novak on July 24, The City has appealed that decision to the state Supreme Court. 19

20 City Pension Contribution Projections Police and Fire Funds Only ($ Millions) $1,200.0 $1,100.0 $1,000.0 $101.8 $103.7 $900.0 $800.0 $287.9 $260.6 $223.6 $219.4 $700.0 $220 $600.0 $500.0 $ City ContribuGon (Per SB777) City ContribuGon (Current Law) 20