Ward Service Office
1447 W. Morse Ave
Chicago, IL 60626
2025 Budget
2025 Budget Survey Results
On December 3, Alderwoman Hadden hosted a budget town hall. During the meeting, she shared updates on the City Council budget process and results from the 49th Ward survey.
2025 Budget Town Hall on December 3rd
Join Alderwoman Hadden for this community meeting to hear updates regarding the 2025 City Budget process.
The meeting will be on Tuesday, December 3, at 6 pm via Zoom. Please register at bit.ly/2549budget
Complete the 49th Ward Budget Survey
On October 30, Mayor Johnson unveiled his budget proposal for the 2025 fiscal year. We want to hear your thoughts on the proposal! Please take a moment to complete the 49th Ward budget survey to help us identify residents' priorities. Your responses will help inform Alderwoman Hadden as we enter discussions for next year's budget.
Take the online survey: bit.ly/2025BudgetSurvey (THE BUDGET SURVEY IS NOW CLOSED)
November 11, 2024 Update
The Mayor proposed a budget that closes a nearly $1 billion shortfall by 3% reductions in all departments from efficiencies and by eliminating vacancies, a large TIF surplus, and a $300 million property tax increase. From Wednesday to Saturday this week, City Council heard from department heads about their proposed budgets and plans for meeting Chicagoans' needs for 2025. These are long days - two nights we met until 9pm - but they are very productive as we are given the opportunity to see behind the curtain and dive into the financial details of all elements of government.
​
As Co-Chair of the Progressive Caucus, I also have used the opportunity to meet with colleagues both in and outside of my caucus to work on solutions. The budget process is different this year. City Council is finally taking more control in the process and not just accepting the first proposal handed to us by the Mayor. This is a good thing. I will attend the Special Meeting on November 13 and plan to vote down the $300M levy currently proposed. I don't believe our constituents can manage such a large increase, and I believe we can find other savings and revenues to reduce it.
However, once we decline this option, it's really up to us to make the amendments to solve for a balanced budget by December 31. We're not even halfway through budget hearings - there is a lot of information I'm still gathering (including input from constituents) that is necessary to presenting responsible and fair amendments for the 2025 budget. I have already submitted several revenue ideas that could generate more than $150M in additional revenue for the city, but I still have to fully vet them and gather support from my colleagues. If and when my proposals are adopted, I will share them with all of you. I urge patience as we go through this process. Political stunts aren't going to solve the deficit problem we're facing
Mayor Johnson Unveils 2025 Budget Proposal
On October 30, Mayor Johnson unveiled his $17.3 billion proposal for the 2025 fiscal year.
City Council closed the projected $222.9 million deficit for 2024 with a $1.5 billion bond-refinancing plan, saving the city $90 million due to a more favorable interest rate. The city also shifted $175 million in non-teacher pension costs to CPS, closing the 2024 budget deficit.
Still, the City faces a $982.4 million budget gap heading into 2025, leaving City Council with tough decisions in the coming weeks. The gap is primarily driven by revenue and spending factors, with revenue expected to continue decreasing and a decrease in the Personal Property Replacement Tax (PPRT) by $164.9 million from 2024 to 2025. Additionally, rising personnel costs – driven by contractual wage increases, cost-of-living adjustments, and updated pension contributions – all contribute to the projected gap. Finally, the City isn't immune to the impacts of prolonged inflation. And while the Federal Reserve has walked a tightrope of bringing down inflation rates without thrusting the economy into a recession, prices have not deflated to where they were before the COVID-19 pandemic. As a result, an increase in contractual services expenses is expected to continue to rise due to inflationary pressures, as well as planned enhancements in information technology services.
To close the nearly $1 billion gap, Mayor Johnson is proposing a series of efficiencies, savings, and new revenue:
-
Surplus TIF funds:
-
The City will surplus a historic amount of $570 million in Tax Increment Finance funds to help balance the 2025 budget. Of these funds, $300 million will go to Chicago Public Schools, and $132 million will be allocated to the City of Chicago.
-
-
Elimination of vacancies across departments:
-
Johnson's budget proposal avoids layoffs but does call for the elimination of 743 vacant positions, including 400 vacant positions in the Chicago Police Department. These vacant positions include positions required in the consent decree in the Office of Constitutional Policing and Reform and civilian positions that would allow officers working desk jobs to be put back on beat patrol.
-
-
$300 million property tax increase:
-
The Johnson administration is proposing a $300 million property tax increase to close the nearly $1 billion budget gap in 2025. This would amount to a 4.8% increase in property owners' bills based on the assessed value from 2023. The table below breaks down the impact for homes valued at $100,000 to $500,000.
-
In the 49th Ward, the median single-family home was assessed at $423,000, and a condo was assessed at $171,000 in 2021. However, the Rogers Park township and all of Chicago underwent a reassessment in 2024. With the reassessment, the median single-family home in Rogers Park in 2024 is valued at $431,000, and a condo is valued at $182,000. It is still too early to determine how the reassessment will affect property owners' bills, as the Cook County Assessor's office just finished the last township's reassessment, and the Cook County Board of Review still needs to do its reassessment, which will happen in early 2025.
On the proposed 2025 budget - the property tax increase is large and many in our ward will be hit too hard by the current proposal. Now that we actually have a proposal from the Mayor, I'll be working with my colleagues to find every revenue and expenditure change possible to close our budget gap without such a large increase. Based on our current financial situation, it's unlikely for us to find enough revenues and efficiencies to completely avoid a property tax increase. However, if we can find a budget solution that eliminates an increase without putting us in the hole in the coming years or significantly impacts city service delivery, then we should take it. After my initial review of the budget, I don't believe that we need to seek the full $300M property tax increase.
Mayor Johnson's budget proposal continues the advance pension payment contribution of $272 million in 2025 and meets our actuarial obligated pension payment. The advanced pension payments help offset long-term financial obligations for the city, resulting in future savings starting in 2030.
According to the City's Chief Financial Officer, failure to make an advance payment will result in a downgrade of our bond rating, impacting our borrowing costs by more than $400 million. What remains unclear, however, is whether a downgrade would still occur should we lower the advance payment amount. I have put forward this question to the Johnson Administration as we continue to explore all possible avenues to ease the burden on Chicago's working families.
As co-chair of the Progressive Caucus, we issued a set of budget priorities reflecting the Caucus' values of equity, stability, and security while also recognizing the difficult financial realities we face entering this budget season. Those priorities included a continued commitment to our workforce, investing in our families through a Childcare for All pilot program, violence prevention programs, and continued housing and homelessness support.
As the city integrates the migrant shelter system with the existing city shelter system, it seeks to double the number of beds to 6,800 through a $40 million investment. The proposed budget also seeks a $29 million investment in the rapid rehousing program, which successfully rehoused 84 individuals experiencing homelessness in our community.
The budget didn't include an increase in the Flexible Housing Pool (FHP) funding allocation to keep up with the cost of living for current clients receiving subsidies. The Flexible Housing Pool was established in 2018, and the programs were funded based on 2018 housing price and service cost data. The costs of all goods and services have increased due to inflation, which saw historic increases due to the COVID-19 pandemic and supply chain issues. Without a $5.2 million increase to the line item, 1,400 FPH participants, 500 of whom are children, are at risk of returning to homelessness.
In Chicago, funding for survivors of domestic violence comes from the houseshare surcharge, a tax applied to people who rent an Air BNB or VRBO when staying in Chicago. While the budget includes $5 million for one-time emergency financial assistance for survivors of gender-based violence, this relies on American Rescue Plan Act (ARPA) dollars, which are facing a fiscal cliff. This issue is compounded by the fact that the federal government and the state government have slashed funding for gender based-violence in recent years despite the issue growing, especially during the COVID-19 pandemic. The Network, a coalition of gender-based violence service providers in the Chicago region, asked the city to increase the homeshare surcharge tax from 2% to 4% to help address this crisis. Unfortunately, this wasn't included in the budget proposal. As we seek budget amendments, I will be asking for this to be reconsidered for inclusion.
The proposed budget includes additional investments in our communities, including $15 million for community violence intervention programs, $52 million for youth employment opportunities, an additional 100 peacekeeper positions in 2025, and a rollout of a mental health dispatch unit within OEMC to ensure mental health calls are appropriately triaged and a mental health response is provided when someone dials 9-1-1.
Finally, as we enter budget hearings on the heels of one of the most contentious and consequential elections of our nation, I believe we are at yet another inflection point for our city. Our City relies on more than our locally- generated revenue to fund our programs and services and maintain our infrastructure. Federal grants and funds passed through to us from the State are vital to the functioning of our city. The incoming administration has promised to close or defund Federal departments that are the source of a lot of revenue for Chicago. We don't know what the impacts will be, but I'm holding this fact in mind as I go through this budget process. We cannot treat this budget as a zero-sum game, which means that I will be working across the ideological spectrum in City Council to move our city forward and pass a budget before December 31, 2024. I also pledge to attend budget hearings, scrutinize the budget closely, and explore every possible avenue to create a balanced budget that isn't overly burdensome for Chicagoans.
City Unveils 2025 Budget Forecast
In August, the Office of Budget Management unveiled the City of Chicago's budget forecast for fiscal year 2025. The forecast paints a dire financial picture for the city, detailing a projected $982.4 million budget shortfall for 2025 in addition to a $222.9 million deficit for 2024.
The primary 2024 deficit is due to less than anticipated revenue and is not due to increased spending. The two main drivers of the gap are the State Personal Property Replacement Tax (PPRT) revenue from business income and reimbursement revenue for pension payments made on behalf of Chicago Public Schools. Together, these two factors account for over 80% of the 2024 deficit.
The projected budget gap for 2025 is based on expenditure projections of existing operations. The gap is driven by revenue and spending factors, with the same factors driving underperformance in 2024 anticipated to continue into 2025. Additionally, the one-time funding sources, such as TIF surpluses, that helped close gaps in previous years are no longer available.
Additionally, rising personnel costs – driven by contractual wage increases, cost-of-living adjustments, and updated pension contributions – contribute to the projected gap. Finally, the City isn't immune to the impacts of prolonged inflation. And while the Federal Reserve has walked a tightrope of bringing down inflation rates without thrusting the economy into a recession, prices have not deflated to where they were before the COVID-19 pandemic. As a result, an increase in contractual services expenses is expected to continue to rise due to inflationary pressures, as well as planned enhancements in information technology services.
As we enter the 2025 budget season, I will scrutinize the proposal closely. I will also work alongside the Office of Budget Management, the Johnson administration, and my colleagues to identify potential new sources of progressive revenue to help close the gap while also balancing the financial realities of Chicago's working families. Finally, we will explore opportunities for efficiencies and savings within the City budget.
A full copy of the 2025 budget forecast is available by clicking here.