Chicago to impose hiring freezes, travel limits amid massive budget deficits

With a projected budget deficit of nearly $1 billion in the coming fiscal year, Chicago officials are taking dramatic steps to reduce costs, including imposing a hiring freeze and drastically limiting non-essential travel.

According to Budget Director Annette Guzman, the steps are going into effect immediately as the city seeks to address significant shortfalls.

In addition to the hiring freeze, the city will also impose “stringent” limitations on non-essential travel for employees, and will also slash overtime expenditures in areas outside of the public safety sphere.

“These measures, while necessary, reflect our commitment to responsible fiscal management during a time of financial uncertainty,” Guzman said in a statement. “The City’s leadership team, including the Office of Budget and Management (OBM) and the Department of Finance, are working diligently to navigate these financial challenges and ensure the continued delivery of essential services to our residents. We appreciate the cooperation of all City departments as we implement these cost-saving measures.”

According to estimates, the city’s projected budget deficit for FY 2024 is $222.9 million, and the forecast is no better for FY 2025, when the deficit is expected to balloon to $982.4 million. The deficits are being driven by “rising personnel, pension and contractual costs,” according to Guzman’s statement.

Chicago Mayor Brandon Johnson told reporters that the city is willing to consider a variety of options to help close the budget deficit, and also pointed out that this year’s deficit of $222.9 million is less than half of the original projections.

Ald. Brian Hopkins said the decision was the right one, and emphasized that he had called for such a freeze once the projections came out.

“I called on the mayor for an immediate hiring freeze two weeks ago,” he said. “It’s the right decision by the mayor and his budget team.”

Hopkins emphasized that the city will need to not only be creative with financial solutions, but also willing to make potentially tough decisions.

“The severity of the structural deficit we’re looking at right now indicates we should pull back on spending as much as we can,” he said.

Ald. Byron Sigcho Lopez did caution that the cuts will have to be judicious in nature.

“I think it’s important the city looks at every resource to make sure we balance the budget, without sacrificing important services for the city, and especially not burdening working class families across the city that are already struggling to make ends meet,” he said.