City of Chicago FY2024 Proposed Budget: Analysis and Recommendations

City of Chicago Report Cover

November 01, 2023

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The Civic Federation supports Mayor Johnson’s proposed FY2024 budget of $16.6 billion. The City of Chicago budget continues to benefit from the region’s strong economic recovery from the pandemic and recently improved revenue performance in areas that had thus far been slower to recover, such as tourism and large events. Further, it reflects several policies that the Civic Federation supports, including $306.6 million in supplemental payments to the City’s four pension funds and a move to increase the number of civilian positions within the Police Department. Overall, the proposed budget will get the City through the next year while maintaining the status quo, but it is crucial that the administration develop a long-term plan to address issues that will continue to put a strain on the City’s finances in upcoming years. 

The Federation has ongoing concerns about the City budget’s persistent structural imbalance and the use of one-time revenue sources to close the budget gap. In addition, emerging issues like the migrant crisis and some State legislative proposals to enhance pension benefits could add to already rising costs. It will be incumbent upon the administration and City Council to identify additional cuts, savings and sources of revenue to achieve future budget sustainability. Recognizing the pressing issue of caring for the influx of migrants in Chicago, the Federation calls for the development of a contingency plan in the event the State and federal government do not provide additional funding in the coming year.

Despite a large deficit projected for FY2024 and several looming budgetary concerns, the City’s financial position continues to show signs of improvement, as recognized by various credit rating upgrades between 2022 and 2023. The most recent upgrade from Fitch Ratings on October 19, 2023, following the release of the budget, cited long-term liability reductions deriving from improved debt management practices and sustained economic growth. However, the Civic Federation agrees with the rating agency’s concerns regarding the reliance on economically sensitive revenue sources, high pension and debt burdens and the use of one-time revenues to close budget gaps as potential threats to future economic vitality.[1]

Consistent with previous years, the Civic Federation urges the Mayor and City Council to develop a long-term plan for sustaining increasing spending levels, and particularly finding additional stable revenue sources to fund pension costs. The Federation continues to offer several recommendations to improve budgetary transparency across City departments, as well as enhanced transparency in the Chicago Police Department’s implementation of the federal consent decree and the department’s staffing allocations. The Federation also offers recommendations to improve transparency in the City Council’s meeting agenda process. 

The Civic Federation offers the following key findings on Mayor Johnson's proposed FY2024 budget:

  • The projected net appropriations for FY2024 total $12.3 billion. This is an increase of $479.9 million, or 4.1%, over the adopted FY2023 net appropriations of $11.8 billion;
  • The proposed Corporate Fund (general operating budget) of $5.7 billion represents a $272.9 million, or 5%, increase from $5.4 billion in FY2023;
  • Pension contributions to the four City pension funds will total $2.8 billion in FY2024, an increase of $138.7 million, or 5.2%, from the prior year. The pensions are funded with $1.4 billion in property tax revenue, $540.6 million in transfers from the Corporate Fund, $216.3 million from the water-sewer tax, $224.9 million from the Enterprise and Special Revenue Funds, $70.1 million in other sources and $35 million from the Chicago casino. Also included in this number is a $306.6 million supplemental pension contribution for FY2024 to be spread across all four funds;
  • The City’s FY2024 gross property tax levy is approximately $1.8 billion, an increase of $39.1 million over the prior year;
  • Personnel positions within all local funds (excluding grant funds) will increase by 339, or 1.0%, from the prior year to a total of 35,049 full-time equivalent (FTE) positions proposed in FY2024. The largest increase, 169, will be within the Infrastructure Services program area largely due to additional positions in the Department of Aviation;
  • Public Safety personnel make up the largest portion of budgeted positions with 20,582 FTEs, or 58.7%. Of that total, the Police Department accounts for 13,919 budgeted positions. Over the past five years, public safety personnel have decreased by 7.4%, including a decrease of 662 positions, or 4.5%, within the Police Department; and
  • While the number of budgeted personnel positions has decreased from 35,447 to 35,049 over the past five years, personnel services appropriations (which account mostly for salaries and other costs associated with pay), have increased from $4.0 billion in FY2020 to $4.6 billion in FY2024.

The Civic Federation supports the following initiatives and elements of the City of Chicago’s proposed FY2024 budget:

  • Holding the line on tax increases;
  • Supplemental pension payments;
  • Improvement to the City’s financial sustainability and debt ratings; and
  • Increasing civilian positions within the Police Department.

The Civic Federation has concerns about the following issues related to the City of Chicago’s proposed FY2024 budget:

  • Potential sources of fiscal stress on next year’s budget, including: 
    • Uncertainty regarding migrant arrivals;
    • Police birth year legislation; and
    • Changes to Tier 2 pension benefits;
  • Structural deficit and the use of non-recurring revenues in the budget;
  • Pension and debt funds consuming a large portion of City spending;
  • Statutory reliance on gaming revenue to fund police and fire pensions;
  • Chicago Police Department Reform;
  • Reliance on TIF surplus funding;
  • Budgetary transparency concerns, including:
    • Lack of departmental cost of services data due to the Finance General category; and
    • Lack of past-year data on actual expenditures;
  • Future viability of the Chicago Transit Authority; and
  • Recovery in Chicago’s downtown.

The Civic Federation offers the following recommendations as a guide to improving the City of Chicago’s financial management:

  • Develop a contingency plan for migrant care;
  • Develop a long-term financial plan for City operations and pension funds;
  • Pension recommendations, including:
    • Evaluate the financial impact of fixing Tier 2 Safe Harbor Issues;
    • Find a stable pension funding source to supplement uneven casino revenue; and 
    • Work with the State of Illinois to explore consolidation of Chicago’s four pension funds;
  • Increase transparency around police reform efforts;
  • Re-evaluate tax increment financing districts;
  • Recommendations to improve budgetary transparency, including:
    • Include Finance General costs in City department budgets; and
    • Include past-year expenditures in budget documents;
  • Improve transparency of the City Council agenda process, including:
    • Eliminate direct introduction of agenda items without any prior notice;
    • Post agenda items with more than 48-hour notice ahead of meetings;
    • Include detailed descriptions of agenda items;
    • Post supporting materials with agenda items; and
    • Revise the public comment process;
  • Work with the Illinois General Assembly to find solutions to CTA funding and governance;
  • Expand the role of the City Council’s Office of Financial Analysis; and
  • Expand reserves policy to establish a ceiling.


[1] Fitch Ratings, “Fitch Upgrades Chicago, IL’s IDR and GO’s to ‘BBB+’; Outlook Stable,” October 19, 2023.


Click here to read the full report.
Click here to read the press release for this analysis.