Chicago faces financial uncertainty amid budget standoff

CHICAGO - Following a Thanksgiving break, Chicago City Council members are back to tackle a major budget challenge, proposing to sell $806 million in municipal bonds to address a nearly $1 billion shortfall.

The move comes after the council rejected Mayor Brandon Johnson's $300 million property tax increase, leaving officials scrambling for alternative solutions.

Council members are considering smaller revenue measures, such as raising taxes on alcohol, cloud computing, and garbage fees, to help close the gap. However, the bond sale is expected to be the immediate focus. The city plans to borrow $680 million backed by sales-tax revenue and $127 million through general obligation bonds, aiming to reduce debt payments. While the refinancing could provide some relief, it won’t completely resolve the shortfall.

Tensions ran high at Monday’s council meeting, with residents voicing their frustrations. Danielle Carter, a Chicago resident, directly addressed Mayor Johnson during public comments.

"Let’s start with you. Your salary," Carter said. "You are going down in history as the worst mayor in America. Let’s start with cutting yours... Let’s put the police back in our neighborhoods."

Investor concerns are also mounting as the city’s credit rating is under review for a potential downgrade. A lower rating could increase borrowing costs and add financial strain if the city fails to finalize a budget soon.