Wirepoints joined Univision Chicago to discuss the expected $1 billion budget deficit coming to Chicago in 2025. Chicago returns to the same fiscal problems it faced in 2020 before the covid bailouts papered over the city’s problems for a few years. Now the federal covid money has dried up and the deficits have reappeared, exposing the city’s mismanagement of funds.
What needs to be answered by Mayor Johnson and his budget team is this: Why is there talk of more tax hikes or more borrowing if Chicago has $6 billion more today than it did just five years ago? In 2019, the budget for Chicago was $10.6 billion. In 2024, the budget jumped to $16.8 billion. Where did the money go? Massive labor cost increases, more spending on contracts, and of course, growing pension costs.
Without major reforms, it’s likely that Johnson will have to break his promise to not raise property taxes on Chicagoans.
Read more:
- Chicago’s worst-in-nation pension crisis strikes again
- Somebody forgot to tell Mayor Johnson that Chicago Public Schools is junk rated
- Up to $410 million extra being spent on children of illegal immigrants at Chicago Public Schools
Audio and summary 
If this bill passes, say goodbye to local control over all Illinois parks and expect to see open drug and alcohol use, needles, no sanitation and fire hazards, but no ordinary park users.
Question: would (all) Illinois taxpayers be liable for Dolton Village financial deficits, in light of Illinois Comptroller willfully declining to enforce statutory requirements for annual financial filings by municipalities? If Dolton financials were revealed years ago, Dolton would not be (allegedly) bankrupt.
Did Illinois Comptroller commit malfeasance?
What mechanism exists under Illinois law to compel Illinois laws be enforced?
Coming to CHI soon, financial bankruptcy as a reflection of the moral bankruptcy IL is mired in. Follow the money…
While certainly not boring, nothing in Chicago’s budgetary outlook or leadership ever changes. Those in power and lined up to get their share, don’t care. They don’t care about the budget, the deficits, the unsolvable pension crisis, the burden on taxpayers or crime. They also don’t care about graft and corruption as long as they get their political entitlement. They will tax their base, both consumer and business, into oblivion until there is nothing left. Again, nothing new there. The trifecta of bankruptcies continues to loom over Chicagoland.
Thank you WIre Points, but talk is cheap.
“When media reports anything about public finance, this is what they should be talking about. But you may have noticed they only seem to talk about this thing called ‘the budget’. The budget is something very different. For government, the budget is not so much an accounting tool as a propaganda hallucination. Our media and our schools have dumbed us down on all things finance, and government likes it that way. By diverting our attention away to the petty and irrelevant issues our media, our schools, and our politicians create an intentional void and vacuum in the public mind. So… Read more »
Very interesting – found the YouTube video by searching for “CAFR swindle.”
Screw budgets … show us the CAFR!
Frank, sorry, but this is quack nonsense, especially this part: “Government’s income from just investments is now twice as much as revenue from taxes.” We review and write about CAFRs frequently and they say no such thing. I am not familiar with that source you cited but I suggest you read somebody else.
Mark I’m not familiar with CAFRs but It would be good to know where all the extra money is going from TIF’s. If Tif’s are so great there must be billions in extra taxable properties that were built/remodeled in blighted areas as the original intent was for that money. For example the then Sears tower original Tif value was approx $440M then later sold for over $1.1B as the now Willis tower. So where is the extra taxable $700M being spent to increase total taxable properties? Is the Tif value part of the budget that is over the base value… Read more »
Yes, that’s basically it. The TIFs have been used as slush funds and raided from time to time for a variety of uses.
A search of Wirepoints for CAFR shows a few articles from 2022, but none recently. The main sin of omission from the CAFR is listing long-term(future) liabilities without listing future revenue that would offset the liabilities. For example, the 2022 Illinois CAFR shows a total net position of negative $181 billion. I will look into Day’s statement about investments, since he was reporting in 2013, perhaps he was talking about the go-go days of 2000 to 2013.
A long term liability, such as a mortgage, is offset by the value of an asset, your house, not by your projected future earnings. You are underwater if the mortgage balance is higher than the value of the house. You cannot say that your future earnings offset that deficit.
You are comparing apples to oranges here.
Looks like Day was talking about the combination of local, state, and federal income from investments. I looked at the CAFR for the United States, and it’s quite a bit more complicated than the CAFR for Illinois. So I was unable to confirm or deny Day’s statement.
The more significant issue is the State of Illinois pretending they are $181 billion (2022) in the red is complete fakery and deception. They can’t list future liabilities without listing future (projected) revenue and pass this off as a meaningful description of Illinois’ bottom line.
Frank, if you want a forward look at future expenses and revenue sources, look at budget projections. For the state, those come from GOMB and COGFA. Feds have their own sources. CAFRs don’t attempt to provide that. They just give a snapshot balance sheet past income statement. The main point I wanted to make is that it’s not remotely close to true that “Government’s income from just investments is now twice as much as revenue from taxes,” at any level of government. In Illinois, for example, the state makes about $1.5 billion/year on the cash it has available. That’s it.… Read more »
Where did you get the $1.5 billion number? I have no reason to believe Day is lying or exaggerating, perhaps you should contact him directly.
https://www.wgem.com/2024/08/30/illinois-treasurer-celebrates-record-fy24-investment-earnings-nearly-15-billion/. And we’ve written many times about what investments the state has and how they manage it. See list at bottom here. https://wirepoints.org/more-woke-buffoonery-with-your-money-the-latest-with-illinois-esg-investments-and-treasurer-frerichs-wirepoints/
Thanks, so this would probably be called non-fiduciary. Day is clearly talking about something else. He refers to the stock market as 70% owned by government, and his source for investment income to offset taxation.
Illinois has award winning taxation, so I don’t think Day was implying we should have $50 billion in investment income to offset $50 billion in taxes.
Here is a review of the 2003 Illinois CAFR, from Gerald R. Klatt, a retired federal auditor of 30 years. Old but interesting.
http://cafrman.com/Articles/Art-IL-S1.htm