Chicago announces hiring freeze in face of billion-dollar budget ‘crisis’

Chicago announced a hiring freeze as it prepares to face a nearly billion-dollar budget shortfall next year.

Chicago Budget Director Annette Guzman said the freeze will address the looming $982.4 million budget gap in fiscal 2025, which she says is being driven by "rising personnel, pension, and contractual costs, alongside ongoing revenue challenges."

It is unclear at this time how long the freeze will last.

“Effective today, we are enacting a series of budgetary restrictions, including a citywide hiring freeze and stringent limitations on non-essential travel and overtime expenditures outside of public safety operations,” she said in a statement .

"These measures, while necessary, reflect our commitment to responsible fiscal management during a time of financial uncertainty," Guzman continued.

She said the hiring freeze will also address the $222.9 million year-end projected deficit, which Guzman said is driven by "a decline in specific revenue streams.”

Joseph Ferguson, president of the Civic Federation, a nonpartisan research organization, said the city is in a fiscal "crisis" but said the hiring freeze could give the city an opportunity to reassess wasteful spending.

"My hope is that this is a moment where there is focus on the public administration part of this, the expenditure side of this. The city is absolutely filled to the gills with all sorts of waste and inefficiency," he said.

Police and fire have typically been exempted from previous hiring freezes in Chicago, but police will be included this time around.

"Everything's got to be on the table, and a hiring freeze for non-essentials we certainly should be doing, but if we're talking about at the expense of public safety, that's got me concerned," 19th Ward Alderman Matt O'Shea told ABC 7 Chicago.

In addition to the freeze, Chicago Mayor Brandon Johnson said “sacrifices” will have to be made to close the 2024 and 2025 budget deficits, but he did not go into detail about said sacrifices. His official recommendations for cuts are expected to be made public in October, according to Block Club Chicago .

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“There has not been a determination on whether or not we’re going to have to have to make any cuts. This is just a snapshot, right?” Johnson said. “I am still very much resolved to continue to make these critical investments in housing, mental health, youth employment.”

In 2019, former Chicago Mayor Lori Lightfoot also implemented a citywide hiring freeze before her first budget for the city as it was facing a deficit.