Mayor Johnson says Chicago needs to close $1.15B budget deficit

CHICAGO (WLS) -- Mayor Brandon Johnson's budget director painted a pretty dismal picture of the city's finances Friday.

The mayor and his team have the next couple months to figure out how to close an over a billion dollar budget deficit.

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As Labor Day weekend arrives, tourists continue to visit Chicago's top attractions. Revenue generated from amusement and recreation taxes is up this year, but not nearly enough to bail the city out of a budget deficit that is larger than originally expected.

"Without significant shifts in how we balance the budget, the services that people of Chicago have begun to rely upon would certainly be in jeopardy," Johnson said.

As he begins the process of balancing the 2026 budget by the end of the year, Mayor Johnson says the city is $1.15 billion in the hole. The increased forecast includes closing this year's budget $146 million short and possibly having to absorb a controversial pension payment the Chicago Board of Education voted not to include in the school district's budget.

"Our economy does remain resilient, but fiscal discipline is certainly required at this moment," Johnson said.

But, the mayor's critics say fiscal discipline was required the moment Johnson took office.

"I think the way we got here was the Johnson administration just started piling on more and more expenditures over and over and over again every month. They weren't concerned about how we're going to pay for this in the long run," 32nd Ward Ald. Scott Waguespack said.

Former City Council Finance Committee Chairman Waguespack says the Johnson administration spent hundreds of millions on contracts without City Council approval during the migrant crisis. He also says the mayor refused to right-size government after COVID and expanded staffing at City Hall.

"We really don't have enough on the revenue side of things to pay for the things that he wants. You have to cut. And if you don't cut, your only option is to borrow more or to hit the property tax hike," Waguespack said.

Besides a grocery tax, Johnson did not offer any specifics on how he plans to close the deficit. He has consistently called for the ultra-rich and large corporations to pay more, but many of the mayor's progressive revenue ideas will take action from Springfield. When asked, he would not commit to layoffs or a property tax hike.

"There are ways in which we can create efficiencies without necessarily laying people off, but again, it's too early to be able to make that determination," Johnson said.

The mayor is expected to present his balanced budget in mid-October. It will be followed by city department budget hearings. The hope is for a full City Council vote in November.