Budget Director Annette Guzman left her role on Monday, Chicago Mayor Brandon Johnson announced.
Guzman's exit follows the departures of the mayor's acting
In a statement, the mayor said Guzman was taking time away "to focus on caring for her family."
Johnson thanked Guzman for "extraordinary leadership and dedicated service to the people of Chicago" and "strengthening the city's financial foundation," adding, "Annette has been a valued member of our administration, bringing tremendous care, integrity, and commitment to this work."
Guzman, who joined the Johnson team in 2023 after a stint as budget director for Cook County, said in a statement, "Ten years of public service, at the city and at Cook County, has been the greatest honor of my career. During my tenure as city budget director, I am proud of the work we have accomplished to strengthen the city's financial foundation and help ensure resources are aligned with the needs of working families and communities across Chicago."
Jonathan Ernst, formerly first deputy budget director, will serve as acting budget director, the mayor's office said in a statement.
"Once you lose two key figures critical to city finances in a short time, you have to ask how deep that bench is, and how fast the administration can find leaders willing to step into a role where bondholders' expectations are high," Mohammed Murad, head of municipal credit research at PT Asset Management, said by email.
"Typically, the (Chicago investors conference) is an opportunity for the city to tell the investor community a good story — but this year may look a little different, given the departures, looming deficit, and additional pension contribution," he added.
"She had an incredibly complicated job," said Joe Ferguson, president of the Civic Federation, a Chicago-based fiscal watchdog, of Guzman.
He noted that Ernst, a 17-year veteran of the budget department "is not political. He is professional… (and) a known quantity to the City Council, which is a really important thing right now."
Despite the turmoil, Ferguson said this is a glass-half-full moment for the city. The presence of Comptroller Mike Belsky will help, he said.
"Annette's departure probably bodes well for the emergence of the comptroller as a critical voice, and rightly so," he said. "Belsky has a background in municipal finance and ran a city, as well. He's now had a substantial amount of time in the job. He knows where the money is and how it moves; he knows the investment community, knows their language," and he can recruit new talent to fill the depleted ranks of the mayor's finance team.
Belsky did not respond to requests for comment.
Alderman Scott Waguespack said there's been no update on the status of the delayed second half of Chicago's advance pension payment. Aldermen plan to call for a hearing with the new acting CFO and acting budget director, he said.
"Who's really in control is the big question," Waguespack said. "The mayor doesn't really know finance. His closest advisors have no experience in finance. So you don't even have people speaking the language of business or the muni market."
In a Tuesday statement, the Budget Accountability Coalition, a group of aldermen who support the alternative budget passed over Johnson's objections, said Guzman's resignation highlights the leadership turmoil in the Johnson administration.
"This continued turnover comes at a pivotal moment as his office prepares for the FY2027 budget and on the heels of his administration's failures to execute on generating revenues included in FY2026 budget," the coalition said.
"The mayor needs to provide the public with a full accounting of when and how his administration will deliver on a budget proposal that continues to address structural revenues, efficiencies and reforms needed to close an expected $1 billion FY2027 budget gap, avoid a credit downgrade and put Chicago back on solid fiscal footing," it added.
Alderman Bill Conway said that while this latest exit is jarring, Belsky "will be a source of continuity" and financial leadership for the city.
"I sparred with (Guzman) a fair bit, but all in all, I thought she was a very skilled budgeteer," he said. "I am broadly concerned about the sudden departures of the CFO as well as Budget Director Guzman… It is important that the city have strong financial representation, so that we can show the rating agencies and investors that Chicago municipal debt is a good investment today."
Crime is down in the city and economic development is up, Conway said, and "Chicago has a set of assets that would be the envy of any city in the world… We're having record years of tourism, and… perhaps the politicians in this town could do a little bit better job. But… people should feel comfortable investing in Chicago."
Lisa Washburn, managing director and chief credit officer at Municipal Market Analytics, said the best scenario for Chicago would be for the mayor to permanently fill the finance roles currently filled in an acting capacity, and soon, with people who have muni market experience.
"Particularly with a city like Chicago that has had its share of strains, whether that be through the budgeting process or some of the revenue shortfall that they're having, you'd like to see more stability in that role," she said of Guzman's departure.
How permanent such jobs would be is an open question; the next mayoral election is less than seven months away.
Waguespack said he doesn't expect the mayor to play a more hands-on role in the budget process — "He's never exhibited that penchant for diving into the details of the process," he said — but going forward, aldermen will be looking for details on the budget process, news on the advance pension payment, and information about plans for structural budgetary reform.
They'll also be watching next week's investor conference, "in the sense of who's giving the presentations and what are they saying to show stability, if there is any plan for that," he said.
In addition to the exits of former CFO
"I've never seen this kind of mass exodus before," he said. "It just makes you wonder."
For the muni market, "there's (now) less certainty and maybe a little less confidence in what's to come, in terms of the decision-making process around their finances," Washburn said.
There is at least one storm cloud on the horizon as the city begins its budget talks.
Ferguson said the thing that makes this departure badly timed "is that the budget passed by (the Chicago Board of Education) on Thursday that is possibly illegal and certainly not supported by detailed revenue streams that are reliable, has been characterized by the (Chicago Teachers Union) as a political leverage play toward the governor.
"The money is not there, and what that means is that this all comes sweeping toward the city," raising questions of whether the city is going to hike its tax increment financing surplus declaration, Ferguson said.
"To the extent that the school district does come to the city, the city last year made a decision so that the school district would have sufficient funds so that the city could be made whole (on the Municipal Employees' Annuity and Benefit Fund payment)," Washburn said.
The city will try to minimize the extent to which any gap in school funding spills over to the city, she predicted. Last year's record $1 billion TIF declaration "enabled the city not to have a gap that they needed to close… There's still money that flows between the two entities," she said. "You're going to look at the bigger picture."
But Conway cautioned that the district is already counting on $285 million in TIF funds, which means the city would need to declare a $540 million TIF surplus for that 53% to go to CPS.
"This year we approved
He said it's "hard to see us getting anywhere near that ($1 billion surplus) again. Even $540 million seems like it's got to be a stretch, and going beyond that seems like it would be tough."
Another looming question is the second half of the city's advance pension payment, a key question for bond rating agencies.
Conway said before they left, both Guzman and former acting CFO Mahr told aldermen that "if the county can get itself in order in terms of giving us the
"And it seems like the county is on the road to doing that," he said. "So if that happens, they should be able to make the advance pension payment."
All the same, the recent exits put Chicago's financial decision-making process under a spotlight with the investor conference coming up.
Conway said that as a former banker, he hopes "after they're done in the windowless rooms of the conference," investors will "look around the city." While "in the short term I have significant concern… I am long-term bullish on this city," he said.
Chicago's general obligation bonds carry ratings of BBB-plus from KBRA, BBB-plus from Fitch Ratings, BBB from S&P Global Ratings, with negative outlooks, and Baa3 with a stable outlook from Moody's Ratings.
