Johnson braces City Hall for possible mid-year layoffs

Mayor Brandon Johnson said Wednesday he is already preparing City Hall for a potentially painful round of mid-year layoffs if revenues fall short, infuriating the rebel bloc that muscled an alternative budget through the City Council after rejecting Johnson’s corporate head tax.

Instead of working with the City Council to make the alternative revenue package work, Johnson is preparing for the worst.

In the run-up to a budget rebellion not seen since the 1980’s power struggle known as Council Wars, Johnson and his finance team warned repeatedly that the newly revised revenue plan included shaky and unrealistic estimates that would set Chicago up for a mid-year budget shortfall.

Johnson's administration took particular 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-premise liquor license would apply, and would also get gaming licenses this year.

Now that the $16.6 billion alternative budget has been passed, opposition alderpersons assumed that Johnson would turn his attention to implementing their revenue ideas and making those plans work.

They were wrong. He’s still fighting the budget battle he lost.

“Instead of challenging .0008 of a revenue stream to balance this budget, they decided to sell off debt of working people and poor people over to debt collectors. I still stand firm that it’s immoral,” he said.

“In fact, there’s admittance that this budget and the numbers do not match and add up… There are still some concerns about whether or not the budget projections that were put forth by those other alders — that those projections will actually materialize. So now, I’m bracing for what could be mid-year layoffs. We warned people.”

Johnson said it was too soon to say how many city employees might be laid off, or when the crisis would hit.

“Every month when the revenue comes in, we’re going to have to make strategic decisions around how we salvage or address the shortfall,” he said.

“We’re talking about public employees. There could be real serious consequences to workers who are attached to community safety... I’m continuously working with City Council and rolling up my sleeves to ensure that we can mitigate that type of harm. But we have to deal with that reality that there were alders who chose to create projections that… were not tethered to reality.”

Leaders of the opposition group that seized control over the budget process were incensed by the mayor’s layoff warning.

“I’m outraged. Instead of doubling down against the 2026 budget, he should be working to implement it and to figure out what we’re going to do in 2027,” said Finance Chair Pat Dowell (3rd), whose opposition to the head tax triggered the rebellion.

“The budget is balanced. We know that. We only changed less than 2% of his budget. So, what’s he talking about? Many of the revenues are revenues he himself put forward. So we’re going to walk this plank together. The Council’s not going to walk it alone.”

Former Finance Committee Chair Scott Waguespack (32nd) said it’s “shameful” that the mayor is already working to undermine the alternative budget.

“He’s trying to create a crisis,” Waguespack said.

Far Southwest Side Ald. Matt O’Shea (19th) said many of the revenue projections in Johnson’s first two budgets were “tens of millions of dollars and nobody was laid off.”

“He keeps throwing out these doomsday scenarios and there’s no legitimate reason for it. We proposed a budget that was balanced,” O’Shea said.

Instead of prolonging the budget battle he lost, Johnson should be working with the City Council to ease tensions in the run-up to the 2027 mayoral and aldermanic elections, O’Shea said.

Ald. Anthony Beale (9th) said it’s the mayor’s “job to make the budget work — not to pick and choose” what parts of it to enforce.

“It sounds like the mayor is already laying the foundation to play the blame game by not enforcing certain parts of the budget he didn’t agree with,” Beale said.

Beale led the charge to legalize video gambling over Johnson’s objections. He’s now accusing the mayor 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.

As the budget battle rages on, Johnson's Chief Financial Officer Jill Jaworski is exiting. She's been hired by the nonprofit corporation that runs Navy Pier to serve as chief financial and administrative officer.

Johnson praised Jaworski, who orchestrated a wave of back-loaded borrowing, and said the decision to leave was her decision — not his.