CITY HALL — Chicago is facing an almost billion dollar budget deficit for 2025 — and Mayor Brandon Johnson won’t yet say if he’s sticking by a campaign promise to not raise property taxes during his first term in office.
City officials are forecasting a $982.4 million budget gap in the corporate fund — the city’s main operating fund — for 2025, more than $400 million more than last year’s estimated deficit.
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That forecast accounts for an expected decline in the city’s revenue, including from the state-distributed personal property replacement tax, plus increased labor costs and other cost increases, according to materials distributed by budget officials.
It also bakes in a $175 million Chicago Public Schools pension payment for non-teaching staff. The city shifted the payment to be the school district’s responsibility under former Mayor Lori Lightfoot, but the expense was not included in the school district’s recent budget — one of several points of increasing tension between Johnson’s administration and CPS CEO Pedro Martinez.
The uncertainty of who will make that payment this year is also behind the bulk of a $223 million budget deficit for the remaining part of 2024, administration officials said.
During a press briefing Wednesday afternoon, Johnson and his budget team gave a broad overview of the 2025 budget forecast, but declined to share details about how they plan to close it.
Johnson’s specific budget recommendations are expected to be made public in October, followed by several weeks of City Council hearings before the final spending document is voted on, likely in November.
This year’s updated budget gap comes in almost exactly at the city’s earlier baseline deficit projection of $986 million.
“There are sacrifices that will be made. This budget gap does present us with a challenge, but it does certainly present us with an opportunity to transform the structure of our budget to ensure that again, working people in this city can ultimately thrive,” Johnson said Wednesday. “Our focus is to minimize as much as we possibly can the impact on city services, programs and, of course, our workforce.”
Johnson repeatedly promised voters during his mayoral campaign that he would not raise property taxes during his first term in office.
But during Wednesday’s briefing, the mayor and other city officials declined to say if an increase is on the table to balance next year’s budget.
“This is just a forecast, it’s a moment in time, and so no decision will be made just based upon a forecasting,” Johnson said. “But what I will say is that I’m very much committed to our overall vision of investing in people, and making sure that we address the structural damage that has been in place for some time.”
Pressed by a reporter if that means he’s not ruling out a property tax hike, the mayor again did not give a definitive answer.
“What I can say is that there are plethora amount of options … we’re going to continue to work with City Council and all stakeholders to come up with viable solutions that will [offer] sustainability,” he said.
The $982 million budget gap also accounts for $150 million in funding for the city’s new arrivals mission. The city initially allocated the same amount in last year’s budget, but Johnson had to ask the City Council to approve an additional $70 million in April to help cover migrant housing and other expenses.
About 5,400 asylum seekers were living in 17 city and state-run shelters as of Wednesday, according to city data. That’s down significantly from almost 15,000 people living in 27 shelters at the end of December.
And the 2025 corporate fund budget will not rely on any federal COVID-19 relief funds, city budget director Annette Guzman said on Wednesday.
Johnson and budget officials also did not comment on specific proposals that could bring the city additional revenue, such as a corporate head tax or legalizing video gaming.
The mayor has tasked the newly formed City Council’s Subcommittee on Revenue, chaired by ally Ald. William Hall (6th), to come up with ideas to bring in revenue that do “not place the burden on everyday people,” Johnson told the Tribune this spring.
That subcommittee has convened only once so far, in a June meeting that was light on specifics.
At the end of Wednesday’s briefing, Johnson said despite the “substantial challenges” apparent in the 2025 budget forecast, he remains committed to enacting the progressive agenda he was elected on.
“There has not been a determination on whether or not we’re going to have to have to make any cuts. This is just a snapshot, right?” he said. “I am still very much resolved to continue to make these critical investments in housing, mental health, youth employment.”
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