Chicago Revises 2026 Budget Shortfall Down to $89 Million

Chicago officials have revised the city’s projected 2026 budget shortfall down to about $89 million, from an earlier estimate of at least $130 million. The gap stems from revenue assumptions included in the City Council-approved spending plan that have not produced the expected money.

Mayor Brandon Johnson reported the initial shortfall in early July. A subsequent midyear analysis put the revenue gap at approximately $131.7 million for the alternative budget adopted over Johnson’s objections. By July 20, city officials were using the lower $89 million figure.

The 2026 spending plan totals roughly $16.6 billion. The unresolved shortfall is separate from Chicago’s projected 2027 budget deficit of about $1.16 billion, which will add pressure to the next annual budget debate.

What happens next

The city has not adopted a final package of spending cuts, new revenue measures or service changes to close the 2026 gap. Aldermen have debated options including debt collection and other revenue measures, but no completed corrective budget action had been identified in the July reporting.

Chicago’s next major step is an updated budget forecast, which was expected by the end of August, followed by negotiations over how to address the remaining shortfall. The revised figure is smaller than the initial estimate but still represents a significant unresolved issue for city finances and the 2027 budget process.