Chicago is facing a $223 million budget gap this year, and the city is projecting a nearly $1 billion shortfall in the 2025 fiscal year.
City officials have issued a hiring freeze, as well as limits to travel and some overtime in an effort to right the fiscal ship — but there are still gaps that need to be filled.
Mayor Brandon Johnson said the challenges the city currently faces are significant, that sacrifices will be made, and the gap underscores the need for strategic decisions.
Chicago Budget Director Annette Guzman joined “Chicago Tonight” to discuss those strategic decisions.
On anticipating the deficit:
“In January, beginning this year, we started to look at our expenditures, to better understand where our expenditures were going, as well as where our revenues were coming in. As we saw our revenues come in a little softer this year we started to contract on our expenditures. One thing that we didn’t anticipate that came to us a little bit later in the year was the non-receipt of a very critical revenue source that we use to support our pension obligations.”
On Chicago Board of Education pension payment:
“With the Board of Education shifting away from one that is mayoral controlled to one that’s elected, we have to start the shift towards CPS being able to support their costs independent of the city’s resources. Those conversations have been about how do we make sure that we are working together to ensure that our schools have the resources they need. We still expect the payment to be made, but at the time that the forecast comes out we have to be honest about what we know. And at that time CPS created a budget that did not include that payment.”
On deficit preventative measures:
“One of the things that we’ve been doing is really looking at department budgets, really looking at how our contracts are structured, looking at what projects were in place that were approved under former administrations that we have to ask ourselves, are these still important? And we’re also having very serious conversations about, what are the revenue sources that we need to support the work going forward? The mayor has been very transparent that he’s always going to be putting forth revenue proposals in front of the City Council.”
On the city’s hiring freeze:
“Being very intentional about what hiring can continue through this year, we’ve immediately seen those savings every day because they aren’t being spent on personnel. Right now, the hiring freeze is in place until the end of the year, if things change with some of our revenue sources that could have an impact on whether or not the hiring freeze continues through the end of this year. We have to understand where our budget for next year is going, too, because the last thing we would want to do is to hire into a position and then not have the resources to support that next year, even long term.”
On potential solutions:
“Our main funding source for most of our operations is our corporate fund. Our corporate fund is actually supporting a lot of operations that actually sit on other funds as well. We’re looking at a number of things to ensure our fees are properly calibrated to support the cost of the service that they’re providing. We’re also looking at what costs are that we can hedge against.”
On garnering support in City Council:
“They have desires to see things happening within their wards and within the city. They’re really clear about the challenge, and they know at the end of the day there’s certain things that the city must do and has to provide because we’re the only ones that provide that service. We’ll focus on what we’re preserving within this budget that we know is critical and that your constituents look to the city to provide.”
