Chicago Facing 1.15 Billion Budget Hole For 2026, But Few Details Yet On How Mayor Will Fill Gap

Chicago's budget deficit for 2026 is projected at $1. 15 billion, slightly higher than last year's estimate of $1. 12 billion. Mayor Brandon Johnson announced this figure while also revealing a $146 million spending gap for the remainder of 2025, primarily due to underperforming revenues and uncertainty over pension reimbursements from Chicago Public Schools. During a press briefing, Johnson acknowledged the "hard truths" of the city's financial situation but offered limited details on how he intends to address the deficit.

He confirmed there would be no property tax increase for 2026, following previous unsuccessful attempts to raise taxes during his tenure. The budget forecast's baseline scenario considers only $40 million in revenue from a grocery tax that is being phased out by the state and requires City Council approval for full implementation. The budget briefing followed the Chicago Board of Education's approval of a CPS budget that avoided classroom cuts but did not include a loan for a significant pension payment. Johnson has committed to pursuing progressive revenue sources targeting the wealthiest to help balance the budget. The ongoing financial challenges signal a continuation of the contentious relationship between the city and the school board over budget decisions.