Council demands to know why Johnson is delaying full payment of $260M pension advance

The alternative city budget muscled through the City Council over Mayor Brandon Johnson’s objections required the city to make the full $260 million advance pension payment to stave off another costly reduction in Chicago’s bond rating.

Late last week, the Johnson administration ignored that mandate and made a half-payment of $130 million and promised to pay the other half later this year.

Now, the renegade group of 32 alderpersons who rejected Johnson’s corporate head tax and seized control of a budget process are demanding to know why.

At Wednesday’s City Council meeting, they introduced a resolution that would summon Budget Director Annette Guzman, departing Chief Financial Officer Jill Jaworski and Comptroller Michael Belsky before the Finance Committee to explain why Johnson is defying their budget mandate.

“It’s really about trying to keep our credit rating intact because without doing this, we are in danger of having another credit downgrade because we’re not doing the full payment,” said Ald. Scott Waguespack (32nd), the former Finance Committee chair who led the budget rebellion.

“He’s disregarding the intent and the vote of the Council. And that’s frustrating because it also shows the rating agencies" that the contentious budget battle continues.

Far Northwest Side Ald. Samantha Nugent (39th) said the full pension payment was a pivotal part of the alternative budget approved by a 30-vote majority.

“That vote wasn’t symbolic. It was a mandate. … The administration has a responsibility to execute it fully and faithfully. Partial compliance is not compliance,” Nugent said in a statement.

It's unclear what would happen if Johnson and his team refuse to make the full pension payment, even after the hearings are held.

"That's a great question," Nugent said. "I'd like to see how the committee goes first. ... If they refuse to, then we'll have to assess our options at that point and potentially introduce legislation to force [their] hand."

The mayor’s office said the decision to “structure the 2026 advance pension payments in two installments” was made because of cash flow concerns tied to delayed property tax payments from Cook County.

“The timing of the property tax distributions, which we would normally get in August of last year, didn’t start coming until the end of December, and are steadily coming in as the year progresses," Guzman said. "But we still have not fully received all of that property tax [money which goes] to pay our pensions.”

Johnson said discussion about how the pension advance would be structured was raised during City Council budget hearings and “should not come as a surprise to anyone.”

Leaders of the opposition group of conservative and moderate alderpersons don’t buy the mayor’s cash flow argument.

They called it a “direct conflict” with Guzman’s late December claim that the newly approved 2026 budget “included a $15 million surplus.”

Ald. Nicole Lee (11th) said the advance pension payment initiated by former Mayor Lori Lightfoot and continued in Johnson’s first two city budgets is “critical to stabilizing our pension systems and protecting Chicago from future downgrades.”

“If there is a real cash flow issue, the public deserves a full and transparent explanation — not fear-based messaging and after-the-fact budget changes,” Lee said. “The Council passed a responsible budget to protect Chicago’s financial future. Walking away from that decision sends exactly the wrong message.”

It’s not the first time that Johnson has ignored the guardrails of the budget passed by the City Council over his objections.

Earlier this month, the mayor said he was already preparing City Hall for a potentially painful round of midyear layoffs amid fears that the newly revised revenue plan included shaky and unrealistic estimates that would set up Chicago for a midyear budget shortfall.

He once again took aim at the plan to sell off long-term city debt to collection agencies and saturate the city with video gambling terminals — with the assumption that 80% of the 3,300 eligible establishments with off-premises liquor licenses would apply, and would also get gambling licenses this year.

Ald. Anthony Beale (9th), who led the charge to legalize video gambling over Johnson’s objections, has accused Johnson of attempting to sabotage the effort by failing to provide the official notification to the Illinois Gaming Board that’s needed to trigger the licensing process.

At Wednesday’s meeting, Beale introduced an ordinance that would call for the city clerk to notify the Gaming Board of that decision.

Also on Wednesday, retiring Inspector General Deborah Witzburg released a troubling report that claimed the city paid $26.5 million in overtime to nearly 1,100 city employees who were not eligible for the overtime payments.

Nearly 25% of the unauthorized payments went to just 18 employees whose overtime payments ranged from $250,000 to $700,000.

The city has known about the overtime problem for more than a decade but took no action to stop it, Witzburg said.