Chicago closed the books on 2025 with an unassigned balance of $52 million — up from zero in its operating checkbook — thanks to spending controls and higher than expected revenues.
The annual city audit by the accounting firm of Deloitte & Touche LLP marks a $381 million turnaround from the lows of 2024.
The unassigned balance would have been higher, but $166 million in retroactive pay raises for Chicago firefighters — paid for by $449.3 million in city borrowing that also covered large settlements — had to be charged to 2025 for accounting purposes, according to Acting Chief Financial Officer Steve Mahr.
The Johnson administration hailed the $219 million surplus — all but $52 million earmarked for other purposes — as a $381 million “improvement from the previous year.
Mayor Brandon Johnson has struggled to pass his last two budgets after an emboldened City Council rejected his proposed $300 million property tax increase, shot down his proposed corporate head tax and approved an alternative budget that included video gambling terminals and other major elements he did not support.
But if he chooses to seek a second term, Johnson can at least claim a bit of a financial turnaround.
“It also represents the largest budgetary surplus that the city has had over the last decade with the exception of 2021 and 2022 because those were pandemic-inflated years” with a $1.9 billion avalanche of federal relief funds, Mahr told the Sun-Times.
City spending that ballooned during the pandemic “only increased by 0.6%,” after $199.2 million in operational efficiencies were made by city departments that came in below budget.
Reserve funds — including long-term revenues generated by the sale of the Chicago Skyway and Chicago parking meters — are down from $1.1 billion before the pandemic to $700 million.
That’s largely due to supplemental pension payments that began under former Mayor Lori Lightfoot and continued under Johnson. This year’s $260 million pension advance was divided into two, the second half of which has not yet been paid.
Revenues rose by 7.5% from one year to the next, with tourism, transportation, recreation and transaction taxes all rolling in at higher levels than expected. Revenues at O’Hare and Midway Airports also rose. Higher investment income from a booming stock market driven by a handful of AI giants also helped improve the city’s bottom line.
A similar investment windfall benefited four city employee pension funds hovering dangerously close to insolvency.
Chicago still faces a $35.1 billion pension crisis that will be made $11 billion worse over the next few decades, thanks to a police pension sweetener signed by Gov. JB Pritzker.
But the “aggregate funding ratio” of the four city employee pension funds improved slightly in 2025 — from 25.63% to 28.15%.
The Johnson-appointed Chicago Future Financial Task Force has suggested reinstating the automatic escalator locking in annual property tax increases at the rate of inflation. Lightfoot imposed the automatic increase, only to stop it in her final budget.
On Wednesday, Mahr was asked whether the mayor was prepared to recommend a property tax increase — widely viewed as the third rail of Chicago politics — before the 2027 mayoral election.
“We are leaving all of our options open. We are evaluating options all the time. We are in the season now of thinking about the 2027 budget. Options remain open to us,” Mahr said. “I won’t speculate what City Council will or won’t do.”
In 2015, the city’s annual pension contribution was roughly $500 million. It’s now roughly $3 billion.
“The city has successfully and effectively climbed that ramp. We’ve made our statutory contributions pursuant to state law and we’ve made these supplemental contributions for the past three years. This year will be the fourth year,” Mahr said.
In August, 2025, Johnson told reporters he expected the city to close the books on 2025 in the red for the second straight year after the Chicago Board of Education balked at authorizing a short-term, high-interest loan to reimburse the city for a $175 million pension payment for non-teaching school employees.
The continued defiance by a partially elected school board still controlled by Johnson’s own appointees was expected to force the city to end 2025 with a $146 million shortfall.
The dire prediction didn’t happen after Johnson declared a record $1 billion tax increment financing ( surplus to bail out Chicago Public Schools and bankroll the new teachers contract.
Under pressure from the City Council, CPS made the full pension payment to the city that, along with higher than anticipated tax revenues and spending controls, helped the city end 2025 in the black.