City revenues drop, but Daley offers no hints at fixes

Clout St.:

Aides to Mayor Richard Daley warned aldermen Wednesday that city revenues are continuing their decline, but the mayor offered no hint of what he might try to do to plug a gaping budget shortfall.

"No new solutions in the end," Ald. Scott Waguespack (32nd) said after the last in a series of closed-door aldermanic briefings by city budget officials.

The Daley administration noted that revenue from the real estate transfer tax is in a free fall due to the weak housing market, aldermen said. The transfer tax generated $10.8 million for the city coffers in July, down from almost $20 million for the same month in 2007. Budget analysts had projected that the city would reap $210 million from the real estate transfer tax in 2008. Last month, they revised that estimate downward, to $155 million.

Despite expressing little hope that revenues would rebound any time soon, mayoral aides stuck Wednesday to their earlier assertion that the city faces a budget deficit of about $420 million.

I wonder if instituting a tax during these lean economic times was a good idea. When it comes to taxes I'm concerned about what happens when the economy is better. In this case the facts are that the taxes aren't adding to the city's "treasury".