With the city facing a $1 billion deficit, Mayor Brandon Johnson’s administration announced this week that it has put the emergency brakes on city spending.
But a city never sleeps, at least not for long. Which means Johnson will ultimately have to loosen the purse strings in a way that still delivers the services for which Chicagoans already dearly pay, while keeping the city fiscally solvent.
And that’s a job that will require the hand of a surgeon, not a butcher. It’s also a task that can’t be kicked down the road and addressed later. And as one expert pointed out to us recently, the city doesn’t have a lot of options for new revenue sources.
The Johnson administration must clear up a $224 million deficit by the end of this year, then tackle a $984.4 million shortfall for 2025. The first steps toward accomplishing this were taken Monday when the city froze all hiring and travel, and also said it had eliminated overtime “not directly required for public safety operations.”
We’re concerned that the city’s move prevents hiring of new police officers and fire department personnel. Previous mayors caught in rough financial straits left hiring at police and fire untouched. A hiring freeze, certainly if it turns out to be a lengthy one, will hit harder because of existing personnel shortages in both departments.
‘Can’t keep up with attrition’
The police department is down almost 2,000 officers from its full strength, with retirements threatening to bring down the number even more. Fraternal Order of Police President John Catanzara said the department “can’t even keep up with attrition at this point.”
Meanwhile, Chicago Fire Fighters Union Local 2 President Pat Cleary says short-staffing has paramedics and ambulances constantly “running night and day.” And the Fire Department’s overtime spending seems to bear this out. The $664 million-a-year department shelled out $64 million in OT during 2023.
The police department, with a budget that approached $2 billion in 2023, rang up $219 million in overtime.
While the hiring freeze in those two departments might help the city get to year’s end, addressing 2025 will require a skillful and delicate hand that doesn’t wind up sacrificing public safety or inadvertently increasing overtime costs.
Luckily there’s time, however short, to balance the budget in a way that doesn’t harm Chicagoans.
“There’s nothing … that says this is a hard and immutable line that’s been drawn,” Civic Federation President Joe Ferguson said of the freeze. “It’s an initial measure. … It reflects the gravity of the fiscal moment.”
Ferguson also said, and we agree, that this week’s steps “shouldn’t be across-the-board permanent” without taking a hard look at the effects.
“If we’re gonna lock into a freeze without having done the analysis of actual needs, then we’re gonna create another set of harms simply out of having not done the work,” he said.
That kind of analysis is long overdue, as it would go a long way to determine where Chicago should be putting its money, and where cuts can and should be made.
Possible property tax hike?
The city’s historically profligate ways have fed the deficit, but it was also helped along by a decrease in funding from the State Personal Property Replacement Tax, plus the city having to take on a $175 million payment to the pension fund of Chicago Public Schools employees who are not teachers.
The Chicago Board of Education voted to skip the payment, leaving the city on the hook. The board — comprised of Johnson appointees, ironically — is dealing with a $500 million deficit.
Johnson and his team have not ruled out a property tax hike as a way to get the city’s budget in line.
Only as an absolute, dead-last resort, we say. With Chicagoans facing inflation, high utility rates, and an already considerable array of municipal fees, fines and sales taxes, they don’t need the city grabbing at their pockets.
This would be a good time for Johnson to do away with obvious money pits, such as his plan to toss in $1.5 billion in infrastructure improvements to help the Chicago Bears build a lakefront stadium.
In announcing the freeze, Budget Director Annette Guzman said the administration is “working diligently to navigate these financial challenges and ensure the continued delivery of essential services to our residents.”
Anything less would be a disservice to the city and its taxpayers.
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