>> Chicago's facing an 882 million dollar budget gap in 2027.

A smaller than expected shortfall.

That's according to Mayor Brandon Johnson's office.

But heading into an election year, the mayor warned today that hard decisions lie ahead or Heather.

Sharon joins us now with more.

Heather, break it down for us.

Why does Chicago yet again have such a massive budget shortfall?

Well, Chicago's finances have long been out of black personnel costs are increasing the city's pension debt is massive and expenses are not keeping pace with tax revenue and that's how you end up with a budget that is structurally unbalanced in 2027 will be no different, but it is about 25% smaller than if city officials warn this year's budget gap would be a year ago.

Mayor Johnson today took full credit for that, So the forecast released today by the mayor.

It contains bad news, though, for Chicago public schools.

What's going on?

Well, CPS's budget relied on a significant amount of tax increment financing, property tax revenue from the city.

But the mayor said that he only plans to declare a surplus of about 340 million dollars.

Now, about half of that will go to CPS.

It will help ease their budget crunch, but they were expecting 100 million dollars more now.

That's on top of the 150 million are hoping to get from the state to avoid layoffs that they've already implemented once and then reversed and now have to figure out how to prevent write CBS Budget for 280 million dollars.

The mayor said today that Chicagoans quote, deserved the maximum level of transparency when it comes to the cost of resolving lawsuits that alleged police by police officers.

>> What's changing?

Well, the mayor said today that he's going to set aside 400 million dollars in next year's budget to resolve lawsuits and settlements, including hundreds of millions of dollars.

More specifically earmarked for police misconduct last it's now that is a change from last year when the city borrowed more than 230 million dollars to cover the cost of these settlements and judgments.

Now, the mayor says that the city will not borrow for those costs this next year, but it will be incorporated into its budget.

Didn't do that last So here's the 882 million dollar question.

>> How is the mayor going to propose to close this gap?

Well, he has until mid October to give us the details.

However, today he did not rule out a property tax hike and he did not rule out going back to the city council and asking them again to impose per employee tax on the city's largest corporations.

Now back in 2024, the city council unanimously rejected a property tax increase.

It be unlikely that he would propose such a hike in an election year.

Even more unlikely that the city council would approve it.

So it's not exactly clear how the mayor is going to come up with, you know, a cool 882 million dollars in the next month or so.

But we will be here to tell you all the details when we know it.

It's not quite a billion, not quite but it is close.

Okay.

Heather, Sharon, thanks so much.

Thanks Brandis.

And you