Chicago's top mayoral aides pull back on promise to make second half of pension advance in full
<p>The $16.7 billion budget approved by a City Council majority that rejected Mayor Brandon Johnson’s corporate head tax required the city to make a full $260 million advance pension payment to stave off another costly reduction in Chicago’s bond rating.</p><p>The Johnson administration ignored that mandate, made a half payment of $130 million in January, and promised to pay the other half in the second quarter of this year. Now that second installment is in jeopardy.</p><p>During a day-long Budget Committee hearing Thursday on the city’s mid-year financial report, top mayoral aides said they are evaluating when and how much the city can afford to pay.</p><p>What’s changed is the protracted problem of delayed property tax payments from Cook County tied to the long-stalled overhaul of the county's computer system by Texas-based<a class="Link" href="https://chicago.suntimes.com/news/2025/12/26/cook-county-property-tax-maria-pappas-tyler-technologies" > Tyler Technologies.</a></p><p>Budget Director Annette Guzman said the continued delay has forced the city to make advance monthly payments to its four city employee pension funds when those funds "need cash” to cover employee benefits “so they don’t have to liquidate investment assets accruing investment returns."</p><p>“The delay is less of an issue of our cash balance and more about helping the pension funds stay afloat while the property taxes are delayed,” Guzman said.
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<p>The $16.7 billion budget approved by a City Council majority that rejected Mayor Brandon Johnson’s corporate head tax required the city to make a full $260 million advance pension payment to stave off another costly reduction in Chicago’s bond rating.</p><p>The Johnson administration ignored that mandate, made a half payment of $130 million in January, and promised to pay the other half in the second quarter of this year. Now that second installment is in jeopardy.</p><p>During a day-long Budget Committee hearing Thursday on the city’s mid-year financial report, top mayoral aides said they are evaluating when and how much the city can afford to pay.</p><p>What’s changed is the protracted problem of delayed property tax payments from Cook County tied to the long-stalled overhaul of the county's computer system by Texas-based<a class="Link" href="https://chicago.suntimes.com/news/2025/12/26/cook-county-property-tax-maria-pappas-tyler-technologies" > Tyler Technologies.</a></p><p>Budget Director Annette Guzman said the continued delay has forced the city to make advance monthly payments to its four city employee pension funds when those funds "need cash” to cover employee benefits “so they don’t have to liquidate investment assets accruing investment returns."</p><p>“The delay is less of an issue of our cash balance and more about helping the pension funds stay afloat while the property taxes are delayed,” Guzman said. “But it does cost us… by pulling dollars out of our own investments. The [Cook County] treasurer's office has told us it’s probably about $18 million since 2022 that we have lost value in by not having our money be able to stay in our own investments.”</p><p>Acting Chief Financial Officer Steve Mahr credited “high-returns in a good market” for increasing the unfunded ratio — the percentage of assets to cover future liabilities — at the four city employee pension funds from 25.6% to 28.1%.</p><p>Determined to maintain that progress, Mahr hedged when asked whether the Johnson administration was still committed to paying the second half of the pension advance in full.</p><p>“Cook County indicated a few weeks ago that property taxes are likely to be delayed by about two months.
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- <p>The $16.7 billion budget approved by a City Council majority that rejected Mayor Brandon Johnson’s corporate head tax required the city to make a full $260 million advance pension payment to stave off another costly reduction in Chicago’s bond rating.</p><p>The Johnson administration ignored that mandate, made a half payment of $130 million in January, and promised to pay the other half in the second quarter of this year. Now that second installment is in jeopardy.</p><p>During a day-long Budget Committee hearing Thursday on the city’s mid-year financial report, top mayoral aides said they are evaluating when and how much the city can afford to pay.</p><p>What’s changed is the protracted problem of delayed property tax payments from Cook County tied to the long-stalled overhaul of the county's computer system by Texas-based<a class="Link" href="https://chicago.suntimes.com/news/2025/12/26/cook-county-property-tax-maria-pappas-tyler-technologies" > Tyler Technologies.</a></p><p>Budget Director Annette Guzman said the continued delay has forced the city to make advance monthly payments to its four city employee pension funds when those funds "need cash” to cover employee benefits “so they don’t have to liquidate investment assets accruing investment returns."</p><p>“The delay is less of an issue of our cash balance and more about helping the pension funds stay afloat while the property taxes are delayed,” Guzman said.
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Chicago's top mayoral aides pull back on promise to make second half of pension advance in full
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