Illinois Legislative News: September 9, 2024
Third Reading Consulting Group
Chicago Projects $982.4M Budget Gap in 2025
On August 29, Chicago Mayor Brandon Johnson announced that the city is facing a $982.4M budget gap in 2025. This represents the largest deficit since 2021, when former Mayor Lori Lightfoot faced a projected $1.2B gap at the height of the COVID-19 pandemic. However, this time, Johnson will not receive a massive influx of federal stimulus funding to balance the budget. In 2024, Mayor Johnson faced a $538M budget gap which he plugged through a variety of one-time measures, such as declaring a tax increment financing (TIF) surplus, to avoid raising property taxes. Johnson has not stated if he plans to increase property taxes in 2025 or consider other measures to cut costs or raise new revenues, such as layoffs or a hiring freeze, legalizing video gaming in Chicago, or allowing slot machines in Chicago airports. Mayor Johnson will submit his budget proposal to the City Council by October 15. The City Council will hold a series of budget hearings throughout October, November, and December, before approving a final budget by December 31.
The Mayor’s Office also released 2026 and 2027 budget gap forecasts. In a base scenario they project a deficit of $1.1B in 2026 and $1.3B in 2027. With a positive outlook, they estimate a gap of $633.8M in 2026 and $702.6M in 2027. With a negative outlook, they forecast a gap of $1.58B in 2026 and $1.93B in 2027.
In his announcement, Mayor Johnson was understanding of the many challenges Chicago will face in the coming years, while remaining optimistic that the city will be able to overcome them. “While the road ahead may be challenging, I am confident in our ability to navigate these difficulties with the strength and resilience that Chicagoans are known for,” stated Johnson. Together, we will build a budget that not only addresses our current challenges but also lays the foundation for a brighter, more prosperous future for all.”
Treasurer Frerichs Announces Record Investment Earnings in FY 2024
On August 28, Illinois Treasurer Michael Frerichs announced that the state took in a record $1.495B in investment earnings in FY 2024, which closed on June 30. This figure is up 4.92% from the $1.002B in investment earnings in FY 2023, which itself was a new state record at the time. Additionally, the Treasurer’s Office reported a record $1.054B in investment earnings for units of local government taking part in the Illinois Funds local government investment pool, up 52.3% over FY 2023.
Much of the recent gains in investment earnings can be explained by high interest rates, although a portion of it can be attributed to smart investments. The treasurer is prohibited by state law from investing the state’s over $37B portfolio in the stock market. Instead, Frerichs invests in municipal and school district bonds and prime money market funds. In response to the record investment earnings, Treasurer Frerichs stated, “We have made common-sense reforms to increase how much we earn in investment returns for our state… Every dollar we earn in interest is a dollar that lawmakers don’t have to raise in taxes.”
Important Upcoming Dates – Statewide
November 5 – 2024 General Election
November 12-14 – Veto Session Week 1
November 19-21 – Veto Session Week 2
