Financial Reforms

image of Pilsen neighborhood

When Mayor Emanuel took office eight years ago, he inherited a structural operating budget shortfall of more than $630 million and a nearly bankrupt pension system that threatened the financial security of the workers, retirees and citizens of Chicago. Through efficiencies, reforms, tighter spending controls and strong fiscal management, by 2019 the shortfall had been reduced by 85 percent. Mayor Emanuel has grown the City’s reserves and improved its liquidity to mitigate current and future risks, to protect against emergencies or unanticipated budget shortfalls while continuing to make critical investments in improved city services and additional programs for our children.

The Emanuel Administration achieved savings and efficiencies from strategic energy and utility purchasing, reducing duplicative operations across departments, transitioning garbage collection and other services to a grid model, and finding savings in the City’s healthcare costs. In total, Mayor Emanuel has achieved more than $720 million in savings, reforms and efficiencies since taking office.
Mayor Emanuel has added to the city’s reserves each year and has established additional measures to ensure financial stability. Since 2012, the City has added over $50 million into its asset lease and concession reserves fund along with another $20 million to its operating liquidity fund.
Starting in 2014, Mayor Emanuel took steps to reduce taxpayer risk associated with swaps and variable rate debt by converting all taxpayer-backed variable-rate debt to stable, fixed-rate debt. In total, the City terminated $2.5 billion in swaps, averting a liquidity crisis triggered.
In 2016, the City began a four-year phase-out of the financial practice of scoop and toss, in which the city restructured near-term debt payments with long-term debt. Through the creation of the Sales Tax Securitization Corporation, the city was able to eliminate the practice of scoop and toss one year ahead of schedule in 2018.
Since 2011, the City has taken a comprehensive approach to reforming the City’s Tax Increment Financing (TIF) program. Under the Emanuel administration, approximately 90 percent of TIF funds were committed or have been committed to neighborhood projects, specifically 80 percent to schools, infrastructure, parks, transit and affordable housing. Including the 2019 TIF surplus, the city will have returned $1.2 billion in surplus to the local taxing districts since 2011.
Mayor Emanuel has worked to develop long-term solutions to a series of pension problems that threatened the financial security of the city’s workers, retirees and the future of our city. All four funds are now on actuarially-based funding plans set by state statute, and each fund has a dedicated funding source in place. Without these reforms, the City’s four pension funds would likely become insolvent in the 2020’s.