Chicago budget director announces citywide hiring freeze in response to projected deficit near $1B

CHICAGO (WLS) -- Chicago Budget Director Annette Guzman announced a citywide hiring freeze as part of her office's efforts to mitigate the nearly $1 billion deficit projected for 2025.

In a statement, Guzman said her office is taking a number of steps to address a $222.9 million year-end projected deficit which she said is driven by "a decline in specific revenue streams," including the State Personal Property Replacement Tax and the city not receiving a $175 million reimbursement for pension contributions for non-teacher staff at Chicago Public School, which had been budgeted.

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The overall $982.4 million budget gap in 2025, she said, is being driven by "rising personnel, pension and contractual costs, alongside ongoing revenue challenges."

In response to the gap, Guzman said she is enacting a number of budgetary restrictions, including the hiring freeze and strict limits on non-essential travel and overtime expenditures outside of public safety, and that "no new interviews or consensus meetings should be scheduled" starting now.

READ MORE: Chicago facing $982M budget shortfall for 2025, forecast shows

"These measures, while necessary, reflect our commitment to responsible fiscal management during a time of financial uncertainty," Guzman said in her statement.

While the announcement is short on details and, thusfar, the mayor hasn't offered any long-term plan moving forward, some are still wondering why this move didn't come sooner.

Joseph Ferguson, president of the Civic Federation, said the city is in a fiscal "crisis," but also said this is an opportunity to weed out waste. He said that should be done before any consideration of a property tax hike.

"My hope is that this is a moment where there is focus on the public administration part of this, the expenditure side of this. The city is absolutely filled to the gills with all sorts of waste and inefficiency," he said.

The city has frozen hiring before, but police and fire have historically been exempted. It's unclear if that's the case this time around, and the city did not answer ABC7's questions about that.

Both the police and firefighter unions have long complained of understaffing, and there's concern a hiring freeze will only worsen that problem.

"Everything's got to be on the table, and a hiring freeze for non-essentials we certainly should be doing, but if we're talking about at the expense of public safety, that's got me concerned," said 19th Ward Ald. Matt O'Shea.

The president of the firefighters union, which has been without a contract for years, said any hiring freeze would pile additional work on already overburdened paramedics and firefighters.

Mayor Brandon Johnson campaigned on a pledge not to raise property taxes, but some fear that's inevitable.

"I think the mayor should have been honest. If he knew he was going to come in, and they were going to spend the money that they wanted to in the way that they wanted to, you can't do that without raising property taxes," said 32nd Ward Ald. Scott Waguespack.

Chicago Public Schools says the city's hiring freeze does not impact CPS or contract talks with the teachers union and that the district already has a hiring freeze for administrative positions.

ABC7 reached out to Guzman's office to request an interview but was told she's not available today.