Illinois Insights Special Edition: Chicago Financial Future Task Force Final Report Summary

Overview

The Chicago Financial Future Task Force’s Final Report provides a comprehensive assessment of the City’s long-term fiscal outlook and presents a range of policy options intended to strengthen Chicago’s financial stability. Launched through an executive order issued by Mayor Brandon Johnson in 2025, the independent 23-member task force brought together business, labor, community, and public policy leaders to examine Chicago’s persistent structural budget challenges and identify potential paths forward.

The report concludes that the City’s fiscal challenges are structural and cannot be resolved through one-time budget actions or temporary revenue sources. Instead, it outlines potential reforms across pension obligations, revenues, expenditures, government operations, and economic development designed to improve Chicago’s long-term financial position.

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Chicago’s Structural Fiscal Challenges

The report concludes that Chicago faces a persistent structural budget imbalance driven by recurring expenditures growing faster than revenues. Recent budgets have relied on temporary measures—including federal pandemic relief funding, surplus Tax Increment Financing (TIF) revenues, hiring freezes, and deferred investments—to achieve balance without addressing the underlying causes of the deficit. As those resources expire, the City is projected to face an ongoing Corporate Fund deficit of approximately $680 million annually beginning in FY2027.

Further, the report notes that many of the City’s major revenue sources, including transaction taxes, fees, fines, and state-shared revenues, do not keep pace with inflation, while labor costs, pension obligations, and debt service continue to increase each year. This dynamic limits budget flexibility and increases vulnerability during economic downturns.

Drivers of Fiscal Pressure

The Task Force identifies unfunded pension liabilities as the most significant long-term fiscal challenge facing Chicago. Decades of underfunding have produced escalating required contributions that consume an increasing share of the City’s operating budget. Combined with rising personnel costs, debt service obligations, and growing legal settlements and judgments, these liabilities constrain the City’s ability to fund core services and neighborhood investments while contributing to higher borrowing costs and credit rating downgrades.

To address these pressures, the report recommends accelerating supplemental pension contributions when financially feasible, improving management of long-term liabilities, reducing reliance on one-time budget solutions, strengthening fiscal governance, and pursuing state-level policy changes where necessary. The Task Force emphasizes that meaningful progress will require a combination of disciplined budgeting, operational reforms, and liability management.

State Partnership and Structural Reform

The report concludes that several high-impact fiscal reforms are beyond the City’s sole authority and would require action by the Illinois General Assembly or changes to existing constitutional provisions. These include pension reforms, modernization of local revenue authority, restoration of Local Government Distributive Fund (LGDF) revenues, and other tax policy changes. As a result, the Task Force identifies collaboration between the City and State as a critical component of any long-term fiscal strategy.

Community Engagement and Guiding Principles

Community input played a significant role in the Task Force’s work. Through surveys, focus groups, and town halls, residents consistently identified public safety, transportation, affordability, and long-term fiscal stability as top priorities. Participants supported a balanced approach that combines economic growth, operational efficiencies, and targeted revenue measures, while emphasizing the importance of accountability and visible improvements in City services. The report also stresses that equity should serve as a guiding principle when evaluating fiscal policy options.

Framework and Recommendations

The Task Force developed 58 recommendations intended to address Chicago’s long-term fiscal challenges across pension obligations, revenues and expenditures, fiscal governance, and economic development. The recommendations range from administrative and operational changes that could be implemented by the City to broader policy reforms requiring action by the Illinois General Assembly or changes to existing state law.

The table below identifies each recommendation included in the Final Report. As detailed throughout the report, recommendations were evaluated based on factors such as fiscal impact, implementation feasibility, and anticipated timeline. Some recommendations also include accompanying dissenting viewpoints that provide additional context on areas where Task Force members reached different conclusions.

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