Chicago enacts hiring freeze, limits some OT expenses due to budget deficit

CHICAGO (CBS) – As the City of Chicago faces a significant budget deficit for this and next fiscal year, the city announced on Monday that it is enacting a hiring freeze and "stringent limitations" on non-essential travel, and some overtime expenses.

In a statement, the city's budget director, Annette Guzman, said the measures would go into effect immediately. The overtime limits will apply to expenditures "outside of public safety operations," she said.

The city said it projects running a $22.9 million deficit at the end of the current fiscal year, and then a $982 million shortfall in 2025 thanks to personnel costs, drops in some key tax revenues, and expiring one-time budget solutions Mayor Brandon Johnson relied on for 2024.

When the city announced it was anticipating a large deficit for next year, Johnson did not say exactly how he planned on closing the gap, including raising property taxes, authorizing legalized video gambling in the city, or approving the placement of slot machines in city airports as ways to raise new revenue.

At least one City Council member on Monday reacted with questions to the announcement of cost saving measures.

"What traveling are we doing, based on this significant budget gap, why is that just now being discussed when we're going to be starting budget hearings in a matter of weeks?" said Ald. Matt O'Shea (19th). "What I hear more and more in my community is: 'I don't want to see a massive property tax increase.'"

Another member seemed to oppose a potential property tax increase to help close the budget deficit.

Ald. Byron Sigcho-Lopez (25th) said, "Well I think it's important that the city looks for every resource to make sure we balance the budget without sacrificing important services for the city and especially not burdening working class families across the city that are already struggling to make ends meet."

Guzman explained that the 2024 fiscal year deficit is caused by a decline in specific revenue streams, including the State Personal Property Replacement Tax, and the city not receiving the budgeted $175 million reimbursement for pension contributions for Chicago Public Schools non-teacher staff.