Making the budget process work better

The 2026 budget fights will be here before you know it.

The final 27-23 vote passing the 2025 city budget.

Though we’ve just wrapped up the 2025 budget for the city, it’s never too early to look ahead.

There’s very little to suggest that next year’s budget cycle will be any less contentious than this year’s. The city’s multiyear budget forecast estimated a baseline $1.19 billion budget gap for 2026. That's $136 million more than this year’s $982 million gap. Given the lack of structural changes in this year’s budget, next year we'll likely revisit many of the same debates from this year.

The Tribune reports that Mayor Johnson is focusing on "progressive revenue" solutions in Springfield to solve our budget issues. That’s not exactly reassuring. Set aside the comments from the governor’s office that they haven’t been talking to the mayor about this for a moment. As @ChicagoBars points out on Twitter, Illinois's election calendar makes this literally impossible as a 2026 budget solution. Any progressive taxation proposals in Springfield will require a referendum vote to pass. With no statewide elections next year, the earliest that vote could happen is November 2026 - which means no new revenue until 2027 at the earliest.

While there’s no silver bullet in addressing that budget gap - as I’ve argued before, we just need to have some hard conversations about spending - we also shouldn't accept the chaos of the past few months as our baseline going forward. Instead, we need to improve the budget process itself.

An attempt at something better

One of the most constructive proposals floated during the last round of budget negotiations was a set of reforms proposed by Alders Andre Vasquez (47th), Matt Martin (40th), and Nicole Lee (11th) and co-sponsored by another eight aldermen.¹ Their initial proposal contained a lot of really good ideas, like:

• A mid-year report from each city department outlining revenue, spending and hiring figures

• Strengthening the City Council Office of Financial Analysis (COFA) with a larger budget and better access to the city’s budget data

• Moving the timeline for the budget process earlier, with the city’s budget director required to submit their initial proposal by September 15th

• Better transparency within a budget proposal, like allocating pension costs out to each department’s ‘personnel cost’ instead of lumping them all together as one giant ‘pension cost’ line item within the Finance General category

• A few other proposals giving more power to individual aldermen to make requests of the city for more data and information, rather than having all requests flow through the Chair of the Budget Committee

Sadly, while the final budget as passed does include some version of the above, it’s a significantly watered-down version which gets rid of a lot of the best parts²:

• The mid-year reporting from the budget director remains, but the timeline is shifted back a bit, with reports due July 30th, and any hearings on that mid-year to be held by September 15th

• Because that timeline is shifted back, the city’s deadline to submit a budget is also pushed back - to October 30th, instead of September 15th³

• The portions empowering aldermen on the budget committee - instead of just the committee chair - to make requests are gone

• The portion strengthening COFA’s budget has been removed

This is pretty unfortunate across the board. That said, the initial proposal still gives us a roadmap of the reforms we need to get a better budget season.

Let COFA do its job

The City Council Office of Financial Analysis was created in 2014 so the City Council could get financial information without relying on the mayor’s Office of Budget and Management (OBM) for everything. That’s a really good idea, but the office has never had the resources it needs to do its job properly. In this year’s final budget, COFA is only allocated around $529,000, with only 5 employees. That compares to over $4.6 million for the OBM (with 37 employees) and about $3.6 million for the City Comptroller’s office (with 31 employees).

A Civic Federation brief last summer highlighted this discrepancy, pointing out that the analogous body to COFA in New York City had a $6.6 million budget and 38 budgeted personnel in 2023. They recommended increasing staffing to at least 12 employees, and setting a budget floor for COFA at 10% of the budget for OBM, the Comptroller and the CFO’s office.⁴ Similarly, the Vasquez/Martin/Lee proposal included a floor set at 20% of the OBM budget.⁵

On top of that, COFA lacks adequate access to the same data on departmental finances that OBM and the Comptroller’s office use when compiling the budget. Without adequate information on spending and revenue, or hiring, vacancies, and salary growth, it’s impossible for COFA to adequately estimate anything for the City Council. If the Mayor’s Office is the only one with any data, they’re the only one in any position to actually produce a coherent budget - which is probably not what we want in the long term. The Vasquez/Martin/Lee proposal had some very detailed language⁶ ensuring COFA had expanded access to this data - and that the city would immediately take steps to follow through on that language. While the final version that passed does give COFA more data access rights⁷, the language doesn’t seem as comprehensive and doesn’t include anything about the city’s obligations to follow through on this requirement as the original language did. It also includes language curtailing COFA’s ability to share their data and analysis with aldermen and outside third parties (like the Civic Federation or Better Government Association) unless such groups agree to data-sharing arrangements subject to City Corporation Counsel approval. It’s important to ensure that COFA really does get the data access they need here, and that they’re able to share such data with other groups as needed.

Better ‘macro-focused’ budget hearings

Giving COFA real resources to do its job should be our biggest priority, but there are other improvements to consider as well.

If you watched any of the budget hearings this past year, you may have noticed that a lot of alders use their time questioning departments about the status of specific programs or projects in their wards. That micro-focus takes away time they could be using to dig further into the macro view for how a department is performing or whether it’s using its resources as efficiently as possible, but these hearings are sometimes the only chance an alder will have to question members of a city department. That’s not great. Better year-round oversight⁸ would make budget hearings more consistently substantive and allow aldermen to legislate the budget more effectively. It can also help us avoid episodes like a delayed prepaid phone tax in Springfield making our budget gap even worse. That’s the sort of thing which you’d hope more oversight and a less rushed process would ensure we don’t miss.⁹

Don’t wait to be reactive on the budget

Alderman Matt Martin (47th) points out in his post-budget recap that we need to start working now to avoid another budget crisis in 2026. He’s right. The Civic Federation’s 2025 Fiscal Roadmap for Chicago recommended creating a government efficiency task force in the first half of 2025 to recommend ways to right-size our budget and city operations to reduce future budget gaps. They also point out that some version of this has been done before, as with a City-County Collaboration committee created in March 2011 by Rahm Emanuel and Toni Preckwinkle to identify savings between city and county services. I’m always a bit worried that spinning new committees like this can be a waste of time - a Revenue Subcommittee intended to generate new ideas for the city only met once last year, and didn’t seem to have very many new ideas - but with proper oversight and specific, public reporting deadlines, something in this vein is worth a shot.

Enshrine things more permanently

In the long run, we also need to ensure that any of these changes have staying power. One of the unfortunate aspects of our governance today is that most matters can be pretty easily overturned by the next mayor and City Council, if there’s a majority of votes to do so. That’s how you end up with events like City Council suspending the rules on selecting our Police Superintendent so Mayor Emanuel could circumvent the statutory process and pick Eddie Johnson. That kind of ad hockery isn’t healthy.

As individuals like State Rep. Kam Buckner, Alderman Gil Villegas, and the Civic Federation’s Joe Ferguson have advocated, the long-term goal needs to be a city charter for Chicago. Effectively a city constitution, a charter would allow us to enshrine a better budget process - and other structural governance reforms - into law which can’t just be overturned by 26 votes in the next City Council. That’s also the sort of reform which might help bolster our debt ratings, too. S&P, for example, explicitly factors in the ‘institutional framework’ in which a government operates into their muni ratings. It’s not enough to get better budget rules - we need to protect those rules, too.

The bottom line

A lot of these aren’t new things for this space. I’ve talked about a charter before, and why having a strong, independent City Council is good. Process issues aren’t sexy, but the reality is that our city’s problems are interconnected. A lot of the bad policy that gets enacted is downstream of the reality that we have poor political processes, and poor processes lead to poor outcomes.

In the near term, we need to give COFA the resources to do its job well, give City Council more oversight throughout the year, and get going on 2026 budget solutions immediately. In the long run, our goal should be to enshrine these better, more orderly, and council-driven processes into a new city charter.

1. You can read their initial proposal in its entirety here.

2. You can read this version here - it’s Article VI.

3. Note that that deadline’s so late, it wouldn’t have even impacted things this year. Even with the city’s delays, their first proposal came out on October 30th.

4. That would work out to roughly $840,000 in this year’s budget - nearly 60% than they actually received.

5. That’s $920,000 or so - nearly 75% more than they actually received.

6. See Sections 7 and 8 here.

7. See page 28, Section 6 here.

8. It’s worth pointing out, of course, that it’s entirely possible to go too far in the other direction, with an ‘oversight process’ turning into city departments continually being grilled by alders about ward-level activities and losing the ability to actually get things done. My impression is we’re far enough in the other direction that that’s not an immediate concern, but it is something to be cognizant of.

9. While not the point, this may be one side-benefit of the mid-year hearings created by the reforms that passed in this budget cycle. While I hope they’ll be informative and budget-focused, simply increasing the number of departmental hearings City Council gets should help reduce the percentage of time we end up spending on micro-issues overall.