Elements of the 2014-2015 Budget The financial plan for the 2014 and 2015 for Chicago comprised of changing features of expenses, incomes, ventures, developments, and improvements. The city examines the various features of the fiscal trepidations into the decision, along with respect to the financial plan. It is extremely important regarding what is required as one looks into the assessment and review process. One particular point that stands out for elements in the current budget, along with a projection for the future budget is the older financial plan, to get an idea of the best course of action for the budget.
Cost tendencies and income of the past year from previous years may help with predicting what is required for the upcoming financial year. Currently, according to Chicago Tribune, “ The City of Chicago have long abused their borrowing privileges, spending fund meant for long-term initiatives on problematic short-term expenses from library books to legal settlement” (Chicago Tribune, 2014). In order to build a better future, Chicago used the powerful financial tool, which was general obligation bond that yield millions of borrowed dollars. The reason for bonds is to have money that can propel cities to a move forward on expensive project that will serve the community for decade to come. Chicago fell into the cycle of using bonds, which does not need voters’ permission before issuing bond, and when the city cannot pay back what is owes, it uses more borrowed money to leverage to push off payments on old bonds. This has become a terrible pattern of fiscal recklessness for the City of Chicago, which has created a mountain of debt that threatened the financial future of the city. This has a created a huge budget deficit, along with imminent pension crisis. Currently the City is trying to mitigate this particular problem, and include a way to deal with this particular issue, and devise a plan in future budgets, and create a budget element do take this problem and crisis head on. One more concern is the evaluation of the incomes, cost and surplus finances and comprehensive information from the city division. This leads to an adequate evaluation of the utilization of preparation for the upcoming budget year. Between 2000-2012, “Chicago spent nearly 10 billion in general obligations bond with virtually no oversight. Nearly half of the money went to cover Chicago’s growing budget problem” (Chicago Tribune, 2013). Chicago’s borrowing practices have put the city heavily in debt. The debt continue to rise, and there needs to be attention brought to this to pay off borrowed money, and get the city to start profiting using money earned to sustain. The city has a proposed a 5 year prospect given the fiscal administration division. These prospects are prospects are predicting method that considers several anticipations of fiscal situations, commercial ability, essential sustenance, and probable enhancement in the city. The prospects give a solid proposal of potential expenses and incomes depend on the preceding and present tendencies. By combining related facts, figures, projections, as well getting an idea of where the majority of the city’s money is going into, these positions give a required appraisal of the fiscal prospect for City of Chicago.
Development of the financial plan in Chicago focuses on the participation of civic community, their response and support. In addition, those in governing offices decided that society and the city will flourish when the civic community participates in the decision making process, rather than dueling government trying to convince the people of what do to improve budgets. When considering the implementation of the financial plan, a vital feature of useful procedures is the divisional response. Divisions in Chicago are assigned with covering precise details to the economic administration divisions. These details give vital appraisal of the related facts and figures. It is an essential action as well to guarantee that expenses and incomes are within control as provided by the financial plan. Essential alteration can be taken in some situations; however, changes must be considerably less in regards to the procedure evaluation.
Long Term Financial Alternatives As with the saying, “in order for things to get better, it has to get worse”. This applies to the City of Chicago budget. In order for Chicago to minimize its dependency on borrowing money, plan is to increase property, sales and gas taxes. Although this plan will increase other fees and fines, this will help reduce the city’s $339 million deficit. The plan is decrease the deficit, and some proposed actions are increase taxes and fines in certain areas. For example, increases cigarette taxes; this tax hike may essentially serve two function, getting people to quit because of tax hike, which will good for their overall health, but helping the city’s budget. Another proposed plan is increasing fines for illegally parking on street (specifically during cleaning days) and for those illegally parking in handicapped parking from $200 to $250 dollars. Overall, the proposed budget for 2015, which is the next fiscal year rely heavily on the Budgeting office which Office of Budget and Management within the city. This will help if the city decides to go with a community-based budgeting system, which lets residents decide how to spend their money, as it relates to infrastructure improvements. The goal is to use resources within the city rather than procure resources from other places. This helps save money, and reduces borrowing, which has placed the city in extreme debt. This will be the building blocks for the future as it relates the city budgeting. The goal is try various methods, to see which budgeting method works best for the year. The five year Capital Improvement Program is updated every year to reflect the most current program information and funding projections. The City uses an array of funding sources to pay for these projects. City funds include proceeds from user fees, bonds, and taxes. Federal and state funds can be used for upgrades to roadways, etc. Some projects are funded by special assessments, such as the Shared Cost Sidewalk Program, in which the City and owners share the cost of replacing sidewalk. In addition, funding the city’s budget from various sources that utilizes special assessment such as particular programs will aid the system, and overhaul their budget.