BGA Policy 2025 City of Chicago Budget Overview

Mayor Brandon Johnson released his proposed 2025 budget for the City of Chicago on Wednesday, Oct. 30. As in previous years, BGA Policy will release a series of department-specific budget snapshots ahead of the departmental budget hearings in City Council.

The following is a brief summary of the overall budget and some of its major highlights.

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Highlights

Snapshot: Appropriation, Staffing and Projected Revenue Changes from 2024 to 2025 Budgets

Major highlights of the proposed budget as a whole include:

• A 2.2% increase in overall appropriations, up from last year's 1.3% budget growth but still well below recent historical and pre-pandemic averages.
  
• A -2% reduction in budgeted headcount, the first reduction since 2021. Per Mayor Brandon Johnson's budget address, the reduction comes from elimination of vacancies and will not require layoffs.
  
• The transportation, aviation, and police departments saw the largest net budget increases.
  
  • Of the three, transportation and aviation are almost entirely funded from their own dedicated revenue streams and grants, while the police department draws primarily on the general corporate fund.
    
  • Police department appropriations make up 48.5% of all budgeted corporate fund appropriations, up slightly from 48% last year
    
• The Chicago Department of Public Health and Department of Planning and Development saw the largest departmental budget cuts, both net and as a percentage of their departmental budget. In both cases, loss of pandemic-related grant funding was a primary driver of the reductions.
  
• The Department of Public Health and the Department of Technology and Innovation saw the most dramatic cuts in budgeted workforce, with -10.6% and -8.2% reduction in positions budgeted respectively. CPD saw the largest net reduction in budgeted headcount, with 456 positions eliminated for a -3.2% change.
  
• Overall revenue projections are up 2.5%, driven primarily by increases in the city's property tax levy and airport rates and charges.
  
  • Despite the overall increase, the city's corporate fund - its largest and most flexible pool of funds - is down -$38.8 million in projected revenue from the previous year, primarily driven by a -$165 million reduction in the personal property replacement tax (the city's share of state corporate income taxes).
    
  • A projected $345.8 million increase in the property tax levy goes towards pension and bond redemption funds, and would not impact the city's corporate fund.

Appropriations

The proposed 2025 city budget contains $18.7 billion in appropriations, up from 2024's $18.3 billion.

Overall Appropriations & Year-to-Year Growth

The overall 2.2% increase represents a slightly faster rate of year-to-year growth than the previous year's budget, which was up 1.3% overall from the 2023 budget appropriations, but is still well below historical averages.

From 2011 (the earliest year for which detailed digital data is available) through 2024, city budgets have grown at an average rate of 8.5% annually, a high rate driven in part by the infusion of billions of dollars in federal relief funds during the COIVD-19 pandemic.

Prior to the 2021 budget, the first budget to include pandemic relief funds, the budget increased annually at an average rate of 5.0%.

Adjusted for inflation, city budgets from 2011-2024 increased at an average annual rate of 4.6%, or 3.3% for the pre-pandemic years 2011-2020, still exceeding this year's 2.2% increase.

As in other recent years, more than 40% of the budget is dedicated to non-departmental appropriations categorized as "Finance General." This year departmental appropriations make up 57.8% of the budget, and Finance General the remaining 42.2%.

Departmental Appropriations and Year-to-Year Growth

The Chicago Department of Transportation, Department of Aviation, and Chicago Police Department saw the largest net budget increases this year, while the Chicago Department of Public Health, Department of Planning and Development, and Finance General non-departmental category saw the largest net reductions.

CDOT and DoA are both primarily self-funding, relying on dedicated local funds and grants for operations, while CPD draws primarily on the main citywide corporate fund. Reductions in the CDPH and DPD appropriations were primarily the result of expiring COVID-19 relief grants, while finance general saw the largest reductions in appropriations from the corporate fund.

As a percentage of the department's total appropriations, the Department of Transportation, Department of the Environment, and Department of Aviation saw the largest increases, while the Office of Budget and Management, Department of Planning and Development, and Chicago Department of Public Health saw the largest reductions.

Departmental Appropriation Sources

The city's corporate fund can be loosely thought of as the city's most discretionary pool of money - unlike grants and purpose-specific funds, any category of appropriation can be made out of the corporate fund for any of the city's departments (or for the non-departmental Finance General category).

Other funds, such as the sewer and water, airport, and vehicle tax funds, must be directed towards related expenses, and as such are primarily used to fund their "parent" departments - Water Management for the sewer and water funds, Aviation for the airport funds, and so on.

Grant funding can be broadly broken up into Community Development Block Grant funding, pandemic relief and revenue replacement funding, and other grants such as state, local, and private grants.

In the following chart, local funds are displayed in shades of blue, CDBG in red, COVID-19 related grants in yellow, and other grants in orange. The non-departmental Finance General category also draws from the city's four pension funds and from a dedicated bond redemption and interest fund, shown here in purple.

Departmental Share of Corporate Fund

As the city's most flexible funding source, year-to-year shifts in the corporate fund can be a helpful illustration of changing priorities over time.

Historically speaking, CPD has made up around half of all departmental corporate fund appropriations (not counting non-departmental Finance General appropriations). Other departments take up a relatively smaller share, although in recent years expanded services and COVID-19 programming have increased DFSS's and CDPH's share of corporate fund appropriations.

Positions

The proposed 2025 city budget contains a total of 36,064 budgeted positions or FTEs, down 745 positions from 36,809 in the 2024 budget.

Overall Positions & Year-to-Year Growth

This year's -2% reduction in budgeted positions is the first decrease in budgeted headcount since 2021. In his budget address Mayor Brandon Johnson stressed that the change in headcount comes from the elimination of vacancies, not from layoffs.

Departmental Positions and Year-to-Year Growth

The Department of Aviation, Office of Emergency Management and Communication, and Department of Water Management, three primarily non-corporate-fund departments, saw the largest net increases in budgeted headcount, while the Chicago Police Department, Chicago Department of Public Health, and Department of Technology and Innovation saw the largest net reductions.

As a percentage of total budgeted departmental positions, the treasurer's office, Department of Aviation, and Department of Housing saw the largest increase in budgeted positions, while DOTI, CDPH, and the Department of Human Resources saw the largest decrease.

Revenue

Beginning last year for the 2024 budget process, the Office of Budget and Management has made a partial revenue dataset available in addition to the appropriations and positions datasets. The dataset does not include grants, which in the current year's budget fund roughly a quarter of budgeted appropriations.

Making projected revenues available at the same time and in the same format as the spending side of the budget had been a key budget transparency item in the BGA Policy Agenda. Over time, and with the inclusion of actual spending totals as they become available, revenue data can be analyzed in greater detail.

Projected revenues for the 2025 budget were up $322.4 million from the previous year's budget, a 2.5% increase, driven primarily by increases in the city's property tax levy and airport rates and charges.

Despite the overall increase, the city's corporate fund - its largest and most flexible pool of funds - is down -$38.8 million in projected revenue from the previous year, primarily driven by a $165 million reduction in the personal property replacement tax (the city's share of state corporate income taxes).

The 2025 budget also projects a -$22.7 million reduction in revenue from fines, forfeitures, and penalties compared to the previous year, and has eliminated the Skyway Long-Term Reserve Interest revenue category, which last year was projected to bring in $23 million, both of which substantially impact the overall corporate fund projection.

A projected $345.8 million increase in the property tax levy goes towards pension and bond redemption funds, and would not impact the city's corporate fund.

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