Chicago alders call on Mayor Johnson to negotiate new $175M budget hole

CHICAGO - City leaders believed they had balanced Chicago’s budget for the year, but an unexpected $175 million shortfall has forced officials back to the negotiating table.

The gap must be closed by the end of the week, the statutory deadline for finalizing budget accounting.

What we know:

The budget hole stems from a dispute between Mayor Brandon Johnson’s administration and Chicago Public Schools (CPS) over a reimbursement payment.

The city had covered a payment into the Municipal Employees Annuity and Benefit Fund last year with the expectation that CPS would reimburse $175 million. However, over the weekend, seven CPS board members signaled they would not approve an amendment to authorize the payment.

Fifteen members of the Chicago City Council sent a letter to Johnson on Tuesday, urging his administration to collaborate with them on funding cuts to address the shortfall. The letter also warned that alders might take legislative action if the administration does not work with them.

"Though we would rather work collaboratively to solve this problem, we are prepared to act legislatively to ensure our requests be met if any attempt to exclude the concerns of Chicago taxpayers were to transpire," the letter stated.

What they're saying:

Ald. Jason Ervin (28th), chair of the City Council Budget Committee and an ally of Johnson, dismissed concerns about City Council involvement.

"Ultimately, this is an accounting issue," Ervin said. "There’s no need to go back to the legislative body. This is something that happened in the past and will have to be adjusted for."

What's next:

With the deadline approaching, city officials will need to finalize a solution quickly.

If no agreement is reached, the dispute could escalate into a broader political battle between the mayor and City Council.