Chicago Democrat mayor admits city faces $1 BILLION deficit in 2025 budget

"The size of the budget gap is significant. It's going to require decisions that will speak to our overall collective desire to build an economy that works for working people. There will be sacrifices that will be made," Johnson told reporters Wednesday afternoon.

While facing an almost $1 billion budget would seem historic, it doesn’t equal the $1.2 billion dollar shortfall that former Mayor Lori Lightfoot presided over in 2021 after Covid pandemic costs drove up the city’s expenses. Lightfoot weathered the storm with cash infusions from the Biden-Harris administration in its Covid relief spending package.

Last year, Johnson dealt with a $538 million budget deficit for 2024 and didn’t lay off city personnel or raise taxes. The mayor declined to say if he would reach for either of those options in the current financial crisis, nor did he comment on the possibility of legalizing video gambling in the city and slot machines at the airport to raise more money. He did not deny that layoffs or at least a hiring freeze at the city is a possibility, according to CBS.

"There are a number of options that we'll explore. What we're working to safeguard against is harm to constituents, to everyday people," he said. "We're working to provide as soft of a landing as possible."

When asked if the deficit had anything to do with city spending on illegal immigrants, budget director Annette Guzman said it did not and claimed that a phenomenon called "underperforming revenue" was to blame, Axios noted.

Ald. Jason Ervin (28th), chairman of the City Council Budget Committee, downplayed the deficit, saying it is not as bad as he anticipated. But he said there will be some hard decisions to be made by the mayor.

"I think we have to look at everything, but at the same time we have to be reasonable so that we're not impacting those that have generally been most harmed by taxes and fees throughout the history of our city. But, again, I think we start on the expense side of paring that down before looking at revenue," Ervin told reporters.

Government spending analysts said it was obvious the city was running a massive deficit and the mayor will have to get his head around spending cuts and tax increases. "The chickens have come home to roost. It is time to get busy," said Joe Ferguson, president of the Civic Federation, a nonpartisan watchdog group that focuses on the city’s finances.

"There's not a silver bullet here. There is not a one size takes care of everything in all situation. We have to open up the budget itself in ways that we haven't done for many years," Ferguson said.

David Greising, president and CEO of the Better Government Association, gave Johnson credit for acknowledging how serious the situation is and admitting that he has some tough choices ahead. "Which is entirely appropriate in this kind of circumstance; the question is who will have to sacrifice what in order to make this budget," Greising said. "It's clear that there needs to be some structural change in revenue, as well as a more aggressive approach to cost cutting."

Johnson hosted the Democratic National Convention last week and said it was a “privilege” to have so much protest at the event.