Chicago faces a nearly $900 million budget gap
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Chicago's 2027 budget deficit checks in at $283.9 million less than what was expected at this time last year.
Why it matters: While good news, it still leaves a whopping $882.4 million gap for Mayor Brandon Johnson and a contentious City Council to fill by the end of the year, according to projections released by the mayor's office Thursday.
Between the lines: The forecast announcement felt less like pure data sharing than election-year campaigning with frequent allusions to the failure of a debt-sale plan advanced by alders last year and the success of Johnson's "progressive revenue."
What they're saying: "These revenues have exceeded expectations and are helping us address the city's structural financial challenges while protecting working people and the critical services that they rely upon," Johnson said
By the numbers: The city's general operating cash (known as the "corporate fund") is expected to shrink in 2027 by $375.9 million (6%) due to reduced TIF surplus availability and "City Council" revenue proposals that didn't pan out, Johnson's office says.
- Meanwhile, the forecast says costs will increase by $506.5 million (8.1%) over 2026 numbers driven by settlements and judgments, cost-of-living adjustments and higher prices.
Pension payment surprise: After casting doubt on his administration's ability to make a second supplemental pension payment this year, Johnson's team announced Thursday that the city would pay it by the end of the month.
- The city will make further payments of $364 million in 2027, the forecast says, bringing the total since 2023 to nearly $1.1 billion.
Zoom out: Civic Federation president Joe Ferguson applauded the payments and emphasized their importance in credit rating agencies' evaluations of the city.
- "But overall," he tells Axios, "it feels like a placeholder budget in an election year that does not suggest there will be any major effort coming from the administration to address structural issues including savings and efficiencies within city operations."
What we're watching: If and how Johnson engages with alders differently this year after two brutal budget cycles. When asked about it Thursday, the mayor initially admitted he could have done things better, but then placed most of the blame on the council:
- "There is a speck in my eye because I'm human," he said. "But what I'm saying is that I'm not going to allow people who have a log jammed in their eye to judge the speck that's in mine."
What's next: Johnson expects to release the details of his full budget "in a little bit over a month."