Chicago had a $161 million deficit for fiscal year 2024, according to the annual comprehensive financial report the city released on Monday. The deficit was driven by reduced intergovernmental revenues and personal property replacement tax revenues, and over-budget public safety costs.
The city took a hit from the Chicago Public Schools' nonpayment of the Municipal Employees' Annuity and Benefit Fund pension payment, according to a presentation shared with reporters.
Its non-receipt negatively impacted the city's general fund reserve, the presentation said.
"New CPS leadership has recognized the obligation around making the 2025 MEABF payment as part of their 2026 budget gap," the presentation added.
"We've overcome a big hurdle with CPS in that they're being realistic (going forward)," Budget Director Annette Guzman said. "We set the groundwork for what their actual obligations are."
CFO Jill Jaworski noted that the city supports CPS in a number of ways — grant programs; capital investment, largely from tax increment financing dollars; debt service on bonds issued for capital projects.
"Last year, when CPS did not pay the portion of the MEABF that was… agreed-upon, there was a lot of concern from City Council members," she said, noting that a lot of them said the city should not continue supporting CPS.
"I think that's a conversation that will be ongoing," she added. "And we will see what the outcome of that is. But certainly there have been many questions directed to us and a lot of dissatisfaction that's been voiced."
General fund revenue performance was down $378 million, despite savings in public health and streets and sanitation, and above-budget investment income, transaction and recreation tax revenues and sales and transportation tax revenues, acting Comptroller Mike Belsky said.
"All of our obligations can be met because we have $11 billion in cash to do that," he said, noting that the city's decision to use federal pandemic relief funds to pay down pension obligations will save taxpayers in the long run.
The city's unassigned fund balance was at zero. Belsky said that was due in large part to the non-receipt of the MEABF payment.
But he noted that the city's $360 million fund balance is "very much in keeping" with where the city kept its fund balance before.
"You have to look at all the categories of fund balance, not just unassigned," Belsky told reporters.
The city's presentation projected that the strategic use of assigned fund balance and casino revenues starting in 2027 to support advance pension payments will save taxpayers $3 billion.
The city had over $6 billion in cash at year's end. It operates on a fiscal year that matches the calendar year.
Jaworski also shared more information about the maturities of the city's two recent general obligation bond sales.
Jaworski acknowledged that debt structure is "backloaded," but "we have strategically brought a number of maturities forward," she said.
On its
The structure is missing maturities in 2034, 2035, 2036 and 2037. On the amortization of those bonds, Jaworski said "the belly of the curve did not have strong demand… We didn't like the market in those maturities, so we decided we were not going to sell any bonds there."
Both bond tranches were structured to pay off the more expensive taxable bonds first.
The city also released the actuarial valuations for the four pension funds. The combined pension funded ratio in 2024 was 26.2% compared to 24.8% in 2023.
The police pension fund was 24.6% funded, up from 23.4% in 2023. The fire pension fund was 24.4% funded, up from 22.8% in 2023. The MEABF was 25.7% funded, up from 24.3% in 2023. And the labor pension fund was 42.6% funded, up from 42.1% in 2023.
With a revenue subcommittee hearing coming up on July 21, the administration of Mayor Brandon Johnson is considering City Council revenue proposals including a video gambling tax, advertising on light poles, a towing and storage rate, vacant property registration, procurement vehicle auctions, and increased debt collection.
Fitch Ratings and KBRA rate the city's general obligation bonds A-minus with a negative outlook. S&P Global Ratings assigns a BBB rating with a stable outlook. Moody's Ratings rates the city Baa3 with a positive outlook.
