Spending cuts and revenue enhancements have reduced the estimated shortfall in Chicago's fiscal 1993 budget to $66 million from $116 million, city officials said last week.
But Karen Danczak Lyons, Chicago's budget director, warned that the shortfall for the fiscal year, beginning Jan. 1, could creep up again.
One major unknown for the budget is what will emerge from ongoing negotiations between the city and its unions, whose contracts expired at the end of 1991. Ms. Lyons said that every 1% increase in salaries could cost the city $11 million on an annualized basis.
She added that the city hoped to end the negotiations in time for the union agreement to be incorporated into the proposed budget that Mayor Richard Daley is scheduled to release Oct. 15.
Another budgetary question mark is the continuation of some of the funds Chicago gets from the state. The money is up for renewal by the Illinois General Assembly next year, and Ms. Lyons said a no vote would confront the city with a midyear budget gap of $38 million.
In July, Mr. Lyons released preliminary budget estimates for the upcoming fiscal year that showed a $116 million shortfall in the $1.76 billion operating budget. Recessionary pressures, higher healthcare costs, and state-mandated programs were blamed.
She said the city pared the shortfall to $66 million, $ 18 million of the drop done through cuts and the rest through revenue enhancements. She added that program cuts and other measures are being examined to eliminate the rest of the shortfall.
