Two days after that roundtable, Johnson\u2019s finance team would disclose the city ended 2024 with a $161 million deficit, emptying one of its key emergency funds. Adding to the bad tidings last week was a final $7 billion estimate for the cost of a state bill boosting benefits for police and fire pensioners through 2055.<\/p>\n
That zeroed out \u201cunallocated\u201d reserve balance is even lower than the depths of the 2008 recession, when it held just $226,000, according to the city\u2019s annual financial reports. It represents a serious financial alarm for the cash-strapped city, according to Justin Marlowe, the director of the Center for Municipal Finance at the University of Chicago<\/p>\n
\u201cI don\u2019t think we can overstate how important that is,\u201d Marlowe said. \u201cIt is the single most closely watched number in all of municipal finance.\u201d<\/p>\n
Given that the costs that drove that drawdown \u2014 the failure of Chicago Public Schools to pay back the city for a $175 million pension payment and a shortfall in state income tax revenues \u2014 were not surprises, that figure is likely to result in a rebuke or threat of a downgrade from ratings agencies, he predicted.<\/p>\n
\u201cIt\u2019s not crossing the Rubicon, but it definitely draws a lot of attention to just how little flexibility the city has,\u201d Marlowe said.<\/p>\n
City policy is to have enough money in reserves to cover at least two months of general operating expenses. In a statement, budget spokeswoman LaKesha Gage-Woodard said the city is \u201con track to rebuild fund balance levels\u201d and adhere to its policy, thanks to overperforming revenues and lower expenditures so far this year.<\/p>\n
Despite that inflexibility, shortly after revealing the deficit, Johnson expressed his staunch opposition to cuts that would detract from his stated mission to make Chicago the safest and most affordable big city in America. New regressive revenues or reductions to violence prevention efforts, he suggested, would be unacceptable.<\/p>\n
Instead, the firm Ernst & Young is probing city procurement, benefits, real estate and fines and fees to find efficiencies, and Johnson convened a budget working group to make initial proposals by August.<\/p>\n
But the mayor\u2019s major options for finding new, significant money are limited without state approval, again raising the possibility of a property tax hike, this time even closer to reelection for him and the City Council that roundly rejected such an increase last fall.<\/p>\n
Other possibilities also face political headwinds. Many aldermen are flatly opposed to replacing the outgoing state grocery tax with a city grocery tax as they pressure the mayor to instead make spending cuts.<\/p>\n
Their unwillingness to vote to bring in more money ties Chicago\u2019s hands in a critical moment, argued Ald. William Hall, 6th, tasked by Johnson with leading aldermen in identifying more revenue.<\/p>\n
\u201cWhat we\u2019re facing is more difficult when you have obstructionists who don\u2019t provide solutions,\u201d Hall said. \u201cThe political headline budgeting is dangerous, because people are very desperate right now.\u201d<\/p>\n
Ald. Nicole Lee, 11th, said she is already preparing constituents for \u201cwhat I believe is going to be a very, very difficult budget process\u201d that \u201cwill likely include a property tax levy.\u201d<\/p>\n
\u201cI don\u2019t think any politician in their right mind would ever want to have to have to be in this position\u201d this close to the 2027 election, said Lee, who voted against Johnson\u2019s last budget and said she and colleagues might not be willing to raise the tax again. \u201cBut here we are, and this is the job. We don\u2019t really have a choice in that matter. It\u2019s got to be dealt with.\u201d<\/p>\n
Last week, the city also disclosed that one good piece of news from its 2024 year-end report \u2014 a slight boost in the funding levels of its four pension funds \u2014 would likely be short-lived.<\/p>\n
A complete actuarial analysis of a new pension sweetener bill that passed the state legislature late last session found the change \u201cwould increase the City\u2019s pension liabilities by more than $11 billion across the Police and Fire funds,\u201d the city\u2019s financial office said, dropping the funding levels of both down to less than 18%. Those funds had only 25% of the money necessary to pay out future retirees at the end of 2024, but were slowly improving.<\/p>\n
That bill awaits Gov. JB Pritzker\u2019s signature.<\/p>\n
\u201cGiven the scale of the impact on the City\u2019s long-term pension obligations, changes of this magnitude should have involved broader stakeholder engagement and a more transparent public process,\u201d said Chief Financial Officer Jill Jaworski. The change, sponsored by state Sen. Rob Martwick, would add an extra $60 million to the $1.5 billion pension tab owed for those two funds in 2027, the city\u2019s analysis found, and grow to more than $753 million for 2055.<\/p>\n
![\"Mayor](\"https:\/\/www.europesays.com\/us\/wp-content\/uploads\/2025\/07\/ctc-l-budget-roundtables-johnson-02.jpg\")
Mayor Brandon Johnson speaks with Budget Director Annette Guzman during a budget roundtable at Truman College in Uptown on June 28, 2025. (Eileen T. Meslar\/Chicago Tribune)<\/p>\n![\"Pat](\"https:\/\/www.europesays.com\/us\/wp-content\/uploads\/2025\/07\/CTC-L-council-firefighters13.jpg\")
Pat Cleary, president of\u00a0Chicago Firefighters Union Local 2, speaks at a rally for their new contract, April 16, 2025, outside City Hall. (Brian Cassella\/Chicago Tribune)<\/p>\n![\"Ald.](\"https:\/\/www.europesays.com\/us\/wp-content\/uploads\/2025\/07\/CTC-L-puppet-city-council-38_f06541.jpg\")
Ald. Nick Sposato, 38th, speaks Feb. 4, 2025, at Chicago City Hall. (Eileen T. Meslar\/Chicago Tribune)<\/p>\n