Chicago budget faces nearly billion dollar shortfall

CHICAGO (CBS) — A nearly billion-dollar shortfall.

The City of Chicago is facing this problem for its 2025 budget because Mayor Brandon Johnson said the city needs to find $982 million, but some experts have ideas to fix the problem.

They said they knew the number would be big, but this is nearly double the amount that Mayor Brandon Johnson faced in his first year in office. Now, he'll have to cut existing spending and find creative ways to raise money.

"The number was actually lower than what I anticipated."

Alderman Jason Ervin (28th), chair of the Budget Committee, said he'd like to see the mayor start with spending cuts but acknowledged they need to find new revenue streams.

"Now our economy has shifted to goods and services and other services, they tax those services such as dry cleaning and things of that nature," Ervin said.

"That requires Springfield. Springfield is not coming to the aid of the city anytime soon."

Joe Ferguson of the Civic Federation, a nonpartisan government watchdog group, said the city needs to look within.

"We have to open up the budget itself in ways that we haven't done for many years," Ferguson said.

"It's clear that there needs to be some structural change in revenue, as well as a more aggressive approach to cost cutting," said David Greising, President and CEO of the Better Government Association.

The city faced higher shortfalls in the pandemic, but at a time when the federal government provided funding assistance.

The mayor didn't give specifics for the 2025 deficit, but the administration did point to some key areas -- notably rising city personnel and pension costs, including a $175 million price tag for Chicago Public School pensions.

"Some tough decisions are going to have to be made. I know that we can take a look at efficiencies. Slowing down hiring, making some cuts to personnel," said 36th Ward Alderman Gilbert Villegas.

At least one government spending advocate suggested Johnson has the chance to leverage his union background to find cost-cutting measures in their memberships.

"That gives him standing like no other mayor that we have seen in our lifetime. To be a convener of labor," Ferguson said.

Another big revenue question is whether the mayor will increase residential property taxes. He hasn't taken it off the table. Johnson will likely present his 2025 spending plan to the City Council in mid-October, with an approved budget required by the end of the year.