Chicago Budget Director Annette Guzman is pictured during a press conference on April 1, 2025. [Don Vincent/The Daily Line]

As the city forecasts a $146 million end-of-year corporate fund deficit and a $1.15 billion budget gap heading into the next fiscal year, the City Council next week will hear from numerous city departments about current spending and revenue levels through the middle of 2025.  

The mid-year budget hearings, mandated through a budget process reform ordinance that was passed during last year’s budget season, will begin Tuesday and take place over the subsequent ten days.

The hearings will come a little over a month after the Chicago Office of Budget and Management (OBM) released its inaugural mid-year budget report to the council and the public. The report allows members of the City Council and public to see how the city’s actual spending and revenue compares to what was projected at the outset of the year. 

The OBM report showed that revenue collection was 4.9 percent higher than budgeted as of May 31, driven by a 12.7 percent increase in utility tax revenue compared to what was budgeted, transaction tax revenue coming in 17.4 percent above budget projections and the city’s share of individual income taxes coming in 25 percent above budget. Those figures offset a 37.4 percent decline in allocations of state Personal Property Replacement Tax (PPRT) revenue from what was expected. 

Additionally, OBM reported the city has controlled costs to save on contractual services and commodities and materials expenditures in the first five months of the year and spent 22 percent less on overtime costs when compared to the same period last year. 

Related: Chicago’s revenues are up and spending is down, but budget gap still looms  

Although the mid-year report showed that revenue collection had come stronger what was budgeted and spending was down from projections, the city is still projecting to end the year in the red for myriad reasons, including the lack of certainty of a $175 million pension fund reimbursement from Chicago Public Schools, lower-than-expected PPRT revenue and the lack of available prior year fund balance and other one-time reserves. 

Related: City projects $1.15B budget gap in 2026, year-end deficit of $146M for 2025 

Last year, Ald. Andre Vasquez (40) put forward sweeping budget process reform legislation that included a mid-year report and hearings and other changes. While a pared down compromise eventually passed, it mandated the mid-year hearings and report. 

Read more:

• Ordinance would aim to create earlier, more transparent city budget process, beef up COFA
• Good government groups criticize compromise budget process ordinance as "watered down"

 

Vasquez said the mid-year hearings elongate the budget process, which often doesn't start until October, putting alderpeople "in position to ask more questions earlier," which he said is more important than ever ahead of what he expected to be the most contentious and difficult budget seasons in memory.

"We've had prior years ... where we're asking 'through the chair' questions and we don't get the answers until after the budget's been voted on," Vasquez told The Daily Line. "So, what we hope to do [next week] is find out what it's looking like compared to what the projections were going to be but also really figure out where we could find savings, because I can't imagine a world where we're not asking for revenue, but if we haven't done the due diligence on identifying how we're saving public dollars or at least coming up with more efficient processes, it will be very difficult to then ask for revenue."

The first day of hearings commences in City Council chambers at 10 a.m. Tuesday, when the Committee on Budget and Government Operations will convene to hear from OBM, the Department of Finance, the Office of the Chief Financial Officer, Department of Human Resources and the Department of Procurement Services.  

Hearings will also take place on Wednesday and Thursday beginning at 9:30 a.m., with Wednesday’s hearings including the Chicago Fire Department, Office of Emergency Management and Communications and Office of Public Safety Administration. Thursday’s hearings will feature the Department of Business Affairs and Consumer Protection, Department of Planning and Development, Department of Housing and Department of Cultural Affairs and Special Events. 

Hearings are also planned on Sept. 16, 17 and 18, but the schedules for those days have not been publicized yet.