Chicago Mayor Brandon Johnson announced that the city faces a $982 million budget deficit for 2025, nearly double the shortfall for his first year in office. Johnson attributed the deficit to increased spending on city workers and lower tax revenues, according to CBS News.
“The size of the budget gap is significant. It’s going to require decisions that will speak to our overall collective desire to build an economy that works for working people. There will be sacrifices that will be made,” Johnson stated in a press conference on Wednesday.
While the nearly $1 billion gap is daunting, it falls short of the $1.2 billion deficit managed by former Mayor Lori Lightfoot in 2021, driven by pandemic-related costs. Lightfoot navigated that financial crisis with federal relief funds from the Biden-Harris administration’s COVID relief package.
Last year, Johnson faced a $538 million deficit for the 2024 budget without resorting to layoffs or tax increases. However, he has not ruled out either option in addressing the current financial crisis. He also remained non-committal about the possibility of legalizing video gambling or installing slot machines at airports as new revenue sources. When asked, Johnson did not deny the potential for layoffs or a hiring freeze at City Hall, CBS reported.
“There are a number of options that we’ll explore. What we’re working to safeguard against is harm to constituents, to everyday people,” he said. “We’re working to provide as soft of a landing as possible.”
When asked whether spending on undocumented immigrants contributed to the deficit, Budget Director Annette Guzman dismissed the idea, pointing instead to “underperforming revenue” as the primary cause, Axios noted.
Alderman Jason Ervin (28th), chair of the City Council Budget Committee, downplayed the deficit’s severity, saying it was not as bad as he had feared, but acknowledged that tough choices lie ahead for the mayor.
“I think we have to look at everything, but at the same time, we have to be reasonable so that we’re not impacting those that have generally been most harmed by taxes and fees throughout the history of our city. But, again, I think we start on the expense side of paring that down before looking at revenue,” Ervin remarked.
Experts in government spending, such as Joe Ferguson, president of the Civic Federation, believe it is evident the city is facing a substantial deficit. He emphasized that Mayor Johnson will need to confront the reality of spending cuts and tax hikes. “The chickens have come home to roost. It is time to get busy,” Ferguson said.
“There’s not a silver bullet here. There is not a one-size-fits-all solution for all situations. We have to open up the budget itself in ways that we haven’t done for many years,” he added.
David Greising, president and CEO of the Better Government Association, commended Johnson for recognizing the seriousness of the situation and admitting that difficult decisions are ahead. “Which is entirely appropriate in this kind of circumstance; the question is who will have to sacrifice what in order to make this budget,” Greising said. “It’s clear that there needs to be some structural change in revenue, as well as a more aggressive approach to cost-cutting.”
Last week, Johnson hosted the Democratic National Convention and described it as a “privilege” to see extensive protests during the event.