Chicago enacts hiring freeze, limits some overtime expenses due to budget deficit
CHICAGO (CBS) – As the City of Chicago faces a significant budget deficit for this and next fiscal year, the city announced on Monday that it is enacting a hiring freeze and "stringent limitations" on non-essential travel, and some overtime expenses.
In a statement, the city's budget director, Annette Guzman, said the measures would go into effect immediately. The overtime limits will apply to expenditures "outside of public safety operations," she said.
The city said it projects running a $222.9 million deficit at the end of the current fiscal year, and then a $982 million shortfall in 2025 thanks to personnel costs, drops in some key tax revenues, and expiring one-time budget solutions Mayor Brandon Johnson relied on for 2024.
When the city announced it was anticipating a large deficit for next year, Johnson did not say exactly how he planned on closing the gap, including raising property taxes, authorizing legalized video gambling in the city, or approving the placement of slot machines in city airports as ways to raise new revenue.
At least one City Council member on Monday reacted with questions to the announcement of cost saving measures.
"People's level of frustration is at an all-time high," said Ald. Matt O'Shea (19th).
City leaders are weeks away from their 2025 budget negotiations.
"What traveling are we doing, based on this significant budget gap, why is that just now being discussed when we're going to be starting budget hearings in a matter of weeks?" said O'Shea. "What I hear more and more in my community is: 'I don't want to see a massive property tax increase.'"
Another member seemed to oppose a potential property tax increase to help close the budget deficit.
Ald. Byron Sigcho-Lopez (25th) said, "Well I think it's important that the city looks for every resource to make sure we balance the budget without sacrificing important services for the city and especially not burdening working class families across the city that are already struggling to make ends meet."
Guzman explained that the 2024 fiscal year deficit is caused by a decline in specific revenue streams, including the State Personal Property Replacement Tax, and the city not receiving the budgeted $175 million reimbursement for pension contributions for Chicago Public Schools non-teacher staff.
"It's a sizable deficit, but it's not the largest one I've seen in my tenure," said Ald. Jason Ervin (28th), chair of the City Council Budget Committee.
CBS News Chicago also asked Ervin what nonessential travel city leaders are doing.
"I really couldn't give you an answer to what—I don't know if there may be conferences or other places that people would go," he said.
Ervin said most Chicago Police and Fire Department jobs are exempt from the hiring freeze—especially those roles that are on the street. It would likely impact such positions as desk jobs now listed on the city's website.
"The freeze as announced today only impacts the City of Chicago," Ervin said. "It doesn't not impact CTA, CPS, the Park District, or other entities—just the City of Chicago."
Mayor Johnson previously ran on not raising property taxes—though in a late August media briefing on the budget, Johnson would not deny that he was considering such a tax hike.
Experts agree the current cuts will not be enough to solve the problem.
"It is to send a signal that the city is serious about trimming its costs, and that there's more and more painful news yet to come," said David Greising, president of the Better Government Association.
There is also recognition within City Hall that the changes will not be enough to make up the budget gap.
Budget hearings begin next month. The City Council has until December to pass a budget that they deem balanced.