Mayor Daley: Failed Mayor of Failing City?

-By Warner Todd Huston

As his last year in office winds down, Mayor Richard Daley is hailed as one of the country's most successful big city mayors. Yet the 2010 census reveals that the city lost 200,000 citizens, the city's budget is millions in the red, and businesses are abandoning the city with alarming frequency. How this equates to success is anyone's guess.

Steve Bartin who writes for newgeography.com, a website that tracks information about America's demographic statistics, notes that there are only nine U.S. cities that have more than one million citizens and the 2010 census data shows that only Chicago lost population. Yet, as Bartin notes, stories across the Old Media can't bestow enough kudos on Mayor Daley's long tenure as Chicago's mayor.

It isn't just the loss of population that marks Daley as a failure, though. As the next mayor comes in to take over Chicago, Rahm Emanuel will face a mess of epic proportions. First of all the city's 2011 budget shortfall is expected to be at least $654.7 million. That isn't the only budget crunch the city faces, either. Chicago schools expect and additional $720 million deficit.

Last year Moody's Investors Service cut Chicago's credit rating down to Aa2 on the reports of the 2011 budget shortfall.

It gets even worse for the city's residents. The city's per citizen debt burden is now worse than that of whole states. Chicago residents are being strangled with $5,399 per resident, a cost that tops every state's debt burden. For a benchmark, the highest per citizen state debt is Connecticut's at $4,859 per resident.

Additionally the city has other major problems including the failed parking meter sale, infrastructure troubles, and a constant stream of indictments and convictions of its politicians - the latter of which has been going on for decades. Chicago's corruption tax (the extra costs citizens endure due to endemic corruption) is one of the highest in the nation.

So, what is this nonsense that Richard Daley has been a great and successful mayor? I wish I knew.

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  • Hear, hear! I concur.

  • Well said....

  • His father wasn't that much of a success either. In fairness, Chicago hasn't fallen off a cliff like some other northern rust belt cities have. Still, anyone older and with a sense of history will lament the current state of the city compared to its great no so distant past.

  • True Both Daley's were disasters. Richard I had the botched convention, the riots and the beginning of white flight.

    not to mention every facet of urban life under Richard I declined. Crime,schools, health care, public transport all declined under Richard I . But because downtown got some new buildings. Chicago was "The City that works". Richard II not as bad crime rate declined. Schools probably didn't improve but because of magnet schools at least some middle class people would send their kids there. But Richard II will leave the city in a deep financial mess which looks to get worse.

    Chicago is the City that works but it only works for a few. Those with government jobs or contracts, the politicians, the bureaucrats etc for them yes Chicago works. For those getting stuck with the tab it doesn't work.

  • Once again, someone who doesn't understand the parking meter lease spouting off about it in a blog. Leasing an asset that was only generating $19 million dollars annually for a return of $1.15 billion in cash up front was a stroke of genius. Plus the city didn't have to invest 10's of millions in infrastructure upgrades to pay for all those new meters, because they would've had to if they raised meter rates since parking meters can only hold so many quarters. Also the City gets to cut operating expenses since meter maids no longer work for the city and the city still collects revenue on parking enforcement tickets issued at meters, which is the most profitable aspect of having parking meters in the first place. Finally, the parking meter lease was directly attributed to London's imitative to collect a toll on drivers who drive into downtown London during rush hour. The difference with Chicago's plan is Chicago got PAID over a billion dollars and got an outside vender to invest THEIR MONEY in infrastructure to discourage people from driving their cars into the city, therefore promoting public transportation. London spent hundreds of million in currency on a complex camera system that records license plates to collect toll fees. Which plan sounds better???? Daley

  • In reply to neuman35:

    Let's finish off your analysis. The $19 million is net of expenses. From 2008 to 2013 rates increase from 300% to 400%. In addition, there are more metered areas, and more 7 day areas, and more 24 hour areas. A modest estimate of net by 2013 could be anywhere from $90-100 million. Plus after 2013 rates will rise in line with inflation. Accordingly, putting these numbers to investment analysis yields an inflation hedged IRR of 6%. However, that same revenue stream could potentially have funded $2 billion-ish in interest only municipal bonds at a high muni rate of 4%. I don't know of any analysis done by others that have said this deal was not poorly done and poorly priced.

  • In reply to hymark999:

    Sorry - just to be fair there would have to be considered the capital investment for the new meter system, which on the other hand I assume would be substantially offset by not maintaining the regularly broken mechanical meters.

  • In reply to hymark999:

    You're not factoring in the decline in people who refuse to park at meters now and choose public transportation or the decline in population. Opportunity cost will play a substational factor in how this lease turns out for the lease holder. First, will people continue to pay higher rates at meters on the street or choose the alternative public transportation. Secondly will people even be driving cars in 30 or 40 years? Between the cost of energy and the ability of the average American to even afford a car will we be driving automobiles when this lease is up in 75 years?

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