Editorial: Financial hits keep on coming, and City Hall's only response is excuses

Chicago Tribune

a day ago

The city of Chicago's checking account has been zeroed out and no one in City Hall is willing to take responsibility.
To hear Mayor Brandon Johnson's finance team, this worrying situation was something that just to them — the equivalent of an act of God over which the city had no control and little time to respond.
City coffers finished 2024 short by $161 million, according to a final 2024 audit made public Monday, forcing the administration to dip into the city's 'unassigned funds' account to keep its books balanced. That account typically holds hundreds of millions and is used for unforeseen expenses. To empty it is highly unusual if not unprecedented.
There were multiple moving parts behind the shortfall, but the main cause was a $175 million payment the city made to a municipal pension fund that covers both city and Chicago Public Schools workers. For about a year, Johnson attempted to force CPS CEO Pedro Martinez and a succession of school boards to reimburse the city, as CPS had done over in recent years when it was temporarily flush with federal pandemic aid.
Martinez and board members balked, saying the schools couldn't afford to help this time, with the federal largesse gone and Chicago Teachers Union members demanding hefty raises (backed by the mayor). And since state law makes that pension payment the city's obligation, CPS wasn't required to pony up.
Yet, even as it became increasingly clear that CPS and its board wouldn't yield to City Hall, Johnson and his finance team continued to rely on that CPS payment to balance the city's 2024 books — even as late as this past March.
A surprise? Some terrible misfortune out of the city's control?
The reality is, the Johnson administration had months to come up with a Plan B as the likelihood grew that CPS wouldn't float more junk-rated debt to cover the pension cost. The mayor chose not to do so, preferring to pin the blame on outside forces.
That's the sort of fiscal 'stewardship' that has seen Chicago's credit rating downgraded once already under Brandon Johnson — with the potential for more downgrades as the city continues to take on more debt and faces a 2026 budget deficit topping $1 billion. Cashing out the entirety of the unassigned funds balance presumably won't make credit ratings agencies feel any warmer or fuzzier.
Attempting to reassure taxpayers that the city's finances are stable, administration officials told reporters they assume CPS will resume handling the $175 million in annual pension payments now that Macquline King, a more Johnson-friendly CPS CEO, is in place on an interim basis. But while Martinez no longer is CPS CEO, that's a foolhardy assumption so long as that pension fund solely is the city's legal responsibility.
As we've said before, if Johnson wants CPS to share in the pension financing pain, he needs to convince Springfield lawmakers to change the law to make both governmental bodies responsible. Until then, this pension payment is likely to remain a hot potato.