With a projected budget deficit of nearly $1 billion next fiscal year, Chicago officials are taking drastic measures to cut costs, including imposing a hiring freeze and severely limiting nonessential travel.
The measures take effect immediately as the city seeks to close large deficits, according to Budget Director Annette Guzman.
In addition to the hiring freeze, the city will also impose “strict” limitations on non-essential travel by employees and will also reduce overtime spending in areas outside of public safety.
“These measures, while necessary, reflect our commitment to responsible fiscal management during times of financial uncertainty,” Guzman said in a statement. “The city’s leadership team, including the Office of Budget and Management (OBM) and the Department of Finance, are working diligently to address these financial challenges and ensure the continued delivery of essential services to our residents. We appreciate the cooperation of all city departments in implementing these cost-saving measures.”
The city’s projected budget deficit for fiscal year 2024 is estimated at $222.9 million, and projections are no better for fiscal year 2025, when the deficit is expected to climb to $982.4 million. The deficits are due to “increasing personnel, pension and contract costs,” according to Guzman’s statement.
Chicago Mayor Brandon Johnson told reporters the city is willing to consider a variety of options to help close the budget gap, and also noted that this year's deficit of $222.9 million is less than half of what was initially projected.
Councilman Brian Hopkins said the decision was the right one and noted that he had requested such a freeze after the projections were released.
“I asked the mayor to immediately freeze hiring two weeks ago,” he said. “That’s the right decision by the mayor and his budget team.”
Hopkins stressed that the city will not only have to be creative with financial solutions, but also be prepared to make potentially difficult decisions.
“The severity of the structural deficit we are currently facing indicates that we should reduce our spending as much as possible,” he said.
City Councilman Byron Sigcho Lopez, however, cautioned that the cuts will have to be judicious.
“I think it's important that the city look at all resources to make sure we balance the budget, without sacrificing important services to the city, and especially without burdening working-class families in the city who are already struggling to make ends meet,” he said.
