Federation praises supplemental pension payments, increase in Police Department civilian positions, but warns of budget’s structural imbalance and future fiscal strains
CHICAGO—In a report released today, the Civic Federation expressed its support for Chicago Mayor Brandon Johnson’s proposed FY2024 budget of $16.6 billion because it maintains the City’s commitment to making supplemental pension contributions, avoids general tax hikes and increases the Chicago Police Department’s staffing allocation for civilian positions. However, the Federation is concerned about an ongoing structural imbalance within the City’s budget and several sources of future financial stress for which the City must find solutions, such as proposed pension enhancements.
The full analysis is available at civicfed.org/ChicagoFY2024.
As detailed in the report, the Civic Federation is encouraged by the region’s strong economic recovery from the pandemic and the recently improved revenue performance of areas including tourism and large events, which benefit the City’s budget through boosted tax revenues. The City’s improved financial position has likewise been recognized through several credit rating upgrades the City received between 2022 and 2023.
“The Civic Federation has been pleased to see improvements in the City’s economy the last several years,” said Sarah Wetmore, acting president of the Civic Federation. “We are also pleased to see Mayor Johnson’s plans for the City to continue making supplemental pension payments in FY2024, a financial best practice launched in FY2023.”
However, the Federation warns that an ongoing structural imbalance in the City budget and several financial strains could be a drag on the City’s long-term financial success if they are not addressed. The growing cost of care for migrants transported to Chicago and the proposed enhancement of pension benefits under consideration by the Illinois General Assembly could increase fiscal pressure in the coming years. The City’s FY2024 proposed budget additionally relies on several one-time revenue sources to close a projected gap of $538 million, including TIF surplus funds and prior-year fund balance.
“We urge the City’s new leadership to develop a long-term plan for the City’s finances,” Wetmore said. “This budget will get them through the next year, but there are many long-standing challenges the City faces that will require sustainable, long-term solutions from both the Mayor and City Council.”
The Civic Federation’s analysis of the proposed FY2024 budget offers several recommendations for fiscal planning and reiterates the Federation’s position on proposals to enhance both Tier 1 and Tier 2 pension benefits. The analysis also voices ongoing concerns about transparency in the Chicago Police Department’s budget regarding personnel distribution and Federal Consent Decree compliance. It further recommends the City Council improve transparency and public access in the legislative process via several adjustments to its meeting agenda processes.