CHICAGO — Mayor Brandon Johnson announced a spate of short-term fixes Tuesday, including debt restructuring, to close this year's budget gap.
Speaking to reporters at City Hall, Johnson said he would fill most of a projected $85.1 million shortfall in the 2026 budget by refinancing between $500 million and $525 million in bonds. He said doing so will allow him to avoid having to lay off city workers this year, and won't add to the city's pile of debt.
Johnson estimated the refinancing will save between $65 million and $71 million. The rest of the gap could be closed with remaining federal COVID-19 financial relief dollars set aside for administrative and grant management costs, "if necessary," he told reporters.
The city still has a little under $18.6 million in federal funds that were set aside for programming. Johnson said moving some of those funds would not endanger any ongoing projects funded by the American Rescue Plan Act.
Neither gap-filling solution requires City Council sign off, the mayor said.
The mayor did not hint at solutions to close the still-undisclosed gap for 2027, which Johnson's budget task force anticipated would be at least $680 million. But he noted that several progressive revenues he supports in this year's budget had overperformed — including a tax on online sports wagering, charges on social media advertising and the personal property lease tax.
He also delivered another blistering critique of his council opponents, the latest signal that he is coming into his fourth budget fight — one that coincides with an election — guns blazing.
Asked what it would take for both sides to simmer down tensions, Johnson responded, "For them to be in agreement with me." Then he described a family he recently spoke with struggling to provide for two daughters after making rent.
"The 'Corporate Caucus' wanted to place a greater burden on that working family, and if you're asking me to just roll over and lay down and not fight for those families, that's not who I am," Johnson said.
Refinancing debt and counting all the savings from it upfront is a common one-time fix tactic used by past mayors to close gaps large and small. So is the use of one-time federal pandemic relief dollars. The city already spent $1.41 billion of its nearly $1.89 billion American Rescue Plan allocation on day-to-day operations. Refinancing for 2026 also leaves one less option to help balance the 2027 budget.
Johnson emphasized he understood the latest plan was a temporary stopgap, saying that the city could not keep relying on "loose change in the couch." He kept mum on what new taxes he would propose in his 2027 budget proposal but signaled a new progressive revenue idea was all but guaranteed.
Through May, his administration's midyear budget report showed the city was about 1.5% — or $32 million — under budget on revenues in the main fund that pays for day-to-day operations. Johnson officials later announced a projected $90 million deficit by the end of this year, threatening potential layoffs to fill it.
That shortfall has become prime ground for the mayor to take repeated jabs at the opposition bloc in the council that passed the 2026 spending plan over his objections.
The opposition budget group's various proposed revenues are coming up $147 million short compared with projections, according to data the mayor's office shared Tuesday. Spending cuts of $47 million and the slight overperformance of other revenues brought the total expected shortfall to $85.1 million, according to the mayor's office.
The largest part of the gap came from the opposition bloc's controversial $89 million debt sale measure, which has not attracted any buyers, according to Johnson's office. Also $29 million from sale of ads on city bridges and light poles, $6 million from augmented reality games on city-owned property and video game terminal licensing have netted nothing or close to it. Modified liquor taxes and an increase to the checkout bag tax are also projected to underperform, according to the mayor.
In a statement sent via Far Northwest Side Ald. Sam Nugent's office, the opposition bloc of aldermen on Tuesday blamed Johnson for not implementing the 2026 budget correctly.
"Mayor Johnson and his administration have failed to execute the budget as required by law," the coalition statement said. "Instead, he has focused on finger-pointing to deflect from his failures and now is using accounting gimmicks that, in reality, won't close our structural deficit, but it does repeat more harmful fiscal practices inflicted on taxpayers by this administration."
The final $16.6 billion plan entailed selling $1 billion in long-outstanding money owed to the city for pennies on the dollar, which Johnson derided as an immoral solution after aldermen rejected his corporate head tax proposal.
He ultimately did not veto the final budget. Since then, the opposition has accused his administration of sabotaging the sale of vehicular debt to score a political win. The opposition bloc has also pressed the mayor to make good on its imperative that the city make a full extra pension payment. Johnson committed to do so in front of a group of city investors earlier this month.
Also Tuesday, the mayor declined to elaborate on his hopes for a data center moratorium in Chicago, saying that such an ordinance is under the council's authority, not his.
Earlier this month Johnson signed an executive order directing city departments to intensify scrutiny of new data centers but stopped short of outright banning them.
However, his administration in the meantime has been moving behind the scenes to curtail even the possibility of such projects.
Peter Strazzabosco, a spokesperson for the city's Department of Planning and Development confirmed last week that a zoning application for the old Ford City Mall land was revised to eliminate a provision allowing data center use "as part of the review process with DPD."
The developer, Midwest RE Acquisitions, LLC, later said via spokesperson Liz Butler the old language was "initially included in the application solely because that use is a permitted use in the new proposed zoning district. The project does not contemplate a data center use." Still, Johnson said in a statement that the change was a product of his executive order.
"In response to my Executive Order strengthening the City's oversight of data center development, the developer removed the previously proposed data center from its plans for the Ford City Mall site less than a week after the order was issued," the mayor wrote. "This is a win for the community members who raised serious concerns about the environmental and public health impacts of data centers. My Executive Order makes clear that Chicago welcomes investment and economic growth, but not at the expense of our communities."
What lies ahead for the next budget fight is unclear. Johnson's budget forecast laying out the deficit is due by Sept. 30.
It will be a budget fight duked out alongside a heated campaign season for the 2027 mayoral and council races. Johnson on Tuesday again demurred on whether he plans to seek reelection, maintaining that his focus was on calling out the "problematic City Council."
But underneath his soaring rhetoric on sticking it to rich corporations was a freshman mayor who appeared resolute in how he would defend his record on the campaign trail.
"This is the ability that you develop when you are a former middle school teacher," Johnson said when asked how he approaches financial forecasting. "You can deal with erratic behavior, and you can multitask, which turned out to be the exact skill set for me as mayor of the city of Chicago."