NAPLES, Fla. -- The mayor of Chicago yesterday said the nation is perched on the edge of a depression.
"Everybody's kidding themselves," Mayor Richard M. Daley told a gathering of municipal professionals sponsored by Municipal Bond Investors Assurance Corp. "Nobody wants to say it, but [it could be a] depression."
For then tax-exempt industry, however, there is a silver lining. The public finance market is perhaps the only place local governments can go to stimulate their economies, the mayor said.
"Nothing can be done without bonds," he said. "The federal government's left us no choice."
The elimination of federal revenue-sharing and other local aid programs is directly responsible for bankruptcy situations such as Bridgeport, Conn., and Chelsea, Mass.
"I believe in bankruptcies for cities," Mayor Daley said. "What choice did the mayor of Bridgeport have? Raising taxes and driving more of the tax base out?"
Higher taxes is political and economic suicide, the mayor asserted, and the intensity of voter intolerance for more taxes is going undetected by state politicians, Congress, and the White House.
"What happened in New Jersey, with the Republican Party gaining control of both the House and the Senate, was that people were saying, 'Don't increase our real estate taxes," he said. "Can Washington hear that message? I don't think so."
Mayor Daley described relations between local decision makers and federal lawmakers as polarized, saying that the trials of crime, drugs, and financial inadequacies at the municipal level are ignored by an "international" White House and Congress.
"Managing a city is like being in the trenches," the mayor said. "At the local level, the bullets are flying and we have to take action.
"The President should call an economic summit right here at home," he continued. "They have summits for every other country. Let the vice president and secretary of sate go abroad to those meetings and weddings."
Chicago has begun to save money through turning certain traffic control tasks over to the private sector, and the city's police force is currently the subject of a study aimed at reducing the number of officers doing clerical and maintenance work.
Mayor Daley is pushing a plan to build an airport near the Indiana border that would be funded through a kind of airline user fee.
Chicago's O'Hare and Midway airports may levy a $3 fee on all tickets sold at the hubs, bringin in an expected $90 million annually to fund debt service for the new airport. "I would think that you, who are in the business of insuring municipal bonds, would look favorably on a plan to pay off the bonds in this way," he said.
