Chicago Mayor Brandon Johnson released his 2025 budget on October 30 with nearly $1 billion in deficits, overspending and low revenue, forcing him to break his campaign promise not to raise property taxes. .
Chicago Mayor Brandon Johnson on October 30 announced a $17.3 billion budget for fiscal year 2025, including a $982 million shortfall.
He could have cut payroll costs or broken a campaign promise to raise taxes on Chicago property owners and renters. He opted for higher property taxes.
His 2025 budget proposal includes a $300 million property tax increase. It comes despite councilors urging Mr Johnson to reject the tax increase, and at a time when wages are rising by just 3.5 per cent and the cost of living is rising by 4.1 per cent.
The city of Chicago missed an opportunity to fix its fiscal problems and used $1.3 billion in federal relief to shore up its general fund budget from 2022 to 2024. Now, Chicago’s 2025 budget will continue its tradition of overspending and adding debt.
Pension reform was not mentioned in Prime Minister Johnson’s budget speech. He mentioned tax increases four times. Johnson has said he wants to “avoid leaving an unpaid legacy for the next generation,” but he can’t do that without reining in the city’s soaring pension costs.
The City Council’s two-week budget hearings run from Nov. 6 to Nov. 20. By law, the budget must be finalized by December 31st.
Here’s an overview of the plans in Johnson’s 2025 budget speech that are unlikely to provide Chicago with the long-term financial stability it so desperately needs.
The mayor plans to contribute to the city’s TIF fund to cover unpaid bills.
The city plans to utilize tax increment funding to address immediate budget needs. This is a continuation of the misallocation of city funds set aside for urban development. Chicago will raise a $132 million fund, and $300 million from that fund will go toward balancing the Chicago Public Schools budget.
The CPS budget faces financial challenges of its own because of pension costs. The city expects CPS to pay $175 million into the City Employees Pension Benefit Fund in exchange for allocating $300 million in tax increment financing funds. It’s questionable whether a cash-strapped city would take that money from a cash-strapped school district.
Mr Johnson will cut further unfilled jobs
Prime Minister Boris Johnson pledged there would be no job cuts, despite staff costs accounting for nearly 60% of the 2025 budget. “While some are calling for extreme austerity measures, such as mass layoffs, to address fiscal disparities, these are not solutions that align with our city’s values,” Johnson said.
Instead, Johnson proposed eliminating 743 vacancies. The Chicago Police Department will eliminate 400 of those vacancies. The cuts come in the wake of some of the highest violent crime rates the city has ever seen.
Johnson’s proposed property tax hike breaks his campaign promise.
The biggest problem with the budget so far is Johnson’s proposal to raise Chicago’s already crippling property tax burden. This is a blow to both businesses and residents, exacerbating the city’s economic growth and population decline challenges.
According to the proposed budget, the city would collect $300 million in new property taxes. It breaks Mr Johnson’s campaign promise. Although still subject to change, Johnson’s spokeswoman Erin Connelly said Chicago homeowners should expect an average increase of about 4% on their 2023 bills.
conclusion
The mayor has once again shown that he supports public employee union supporters over the economic well-being of city residents. Chicago residents already face some of the highest property taxes in the nation. Chicago has the second-highest commercial property taxes among the nation’s largest cities, behind struggling Detroit. The city also has some of the highest resident tax rates.
Further increases in these taxes would have a negative impact on Chicagoans, especially those already suffering from rising home and rental prices. Higher commercial property taxes will continue to drive businesses overseas and hinder much-needed job creation.
The 2025 budget proposal also leaves unresolved the city of Chicago’s crippling pension burden and ballooning costs for government employees. Finally, the city’s proposed budget will continue to hamper police departments, which already face sky-high overtime costs.
Johnson’s broken promises and budget increases could hurt Chicago more than just higher property taxes, hurting jobs and residents. Councilors need to halt tax increases and force Johnson to keep his promise to voters.
