Chicago Pays 26 Cents on the Pension Dollar. One Job in Nine Sits Empty.

On July 7, 2026, Mayor Brandon Johnson's administration told Chicagoans the 2026 budget was already broken.▸ A mid-year report found the revenue the City Council had voted in to balance the budget — selling old city debt to collectors, licensing augmented-reality games on public property, and renting ad space on bridge houses and light poles — had produced close to nothing. The debt sale alone was supposed to bring in about $90 million; no buyer ever emerged. The result is a fresh $130 million hole, six months into a budget year, in a city whose real problem predates this council fight by two decades: it owes its own retirees far more than it has saved to pay them, and it can't staff the government it already has.

Chicago runs four defined-benefit pension funds — for municipal workers, police, fire, and laborers — and by law each is supposed to reach 90% funded by 2055 or 2058.▸ It is nowhere close. The city's own City Council Office of Financial Analysis, reviewing the fiscal 2024 Annual Comprehensive Financial Report, put the four funds' combined net pension liability at $36.5 billion against an aggregate funded ratio of 26.2% — up from 24.8% a year earlier, but still, in the office's own description, "severely underfunded" against a national average of roughly 80%. The Police and Fire funds are the worst off, each covering less than a quarter of what they owe:

Servicing that debt now eats a growing share of every budget the city passes.▸ The 2026 Budget Overview sets a total 2026 pension contribution of $2.76 billion — roughly one of every six dollars in the city's $16.55 billion budget (net of interfund transfers) — funded from five sources: $1.42 billion in property tax collections, $790.0 million from the Corporate Fund, $222.4 million from the Water-Sewer Tax, $286.8 million from Enterprise and Special Revenue Funds, and $44.6 million in anticipated casino gaming tax revenue from Bally's, dedicated by statute to the Police and Fire funds. Nearly four of every five dollars the city collects in property taxes goes to pensions, the city's own Council Office of Financial Analysis notes. That $2.76 billion contribution splits unevenly across the four funds:

It could have been worse: the city made $820.5 million in advance pension payments above the statutory minimum between 2023 and 2025, funded mostly by one-time budget surpluses, specifically to slow the growth of the liability.▸ Those surpluses are gone. The 2026 budget carries only a $120.2 million advance payment, down from $272 million the year before, and Illinois lawmakers' 2025 expansion of police and fire pension benefits will push required contributions higher again starting in 2027.

While the pension bill grows, the government paying it is short-staffed.▸ Chicago's 2026 budget funds 34,173 positions and 35,760 full-time equivalents across all funds, but for the eight months between February and September 2025 — the only stretch for which the city has published monthly vacancy data — an average of 11.2% of budgeted full-time positions sat empty citywide, per a Better Government Association analysis of the city's own workforce data. At the Chicago Police Department specifically, 742 full-time positions were vacant in every one of those eight months — the same title, division, and section empty from February straight through September:

The distribution is not random.▸ Patrol Services, CPD's largest division at 10,520 budgeted positions, ran only 1.6% persistently vacant — the department fills the jobs that put officers on the street. The emptiest desks sit in the back office: the Office of Constitutional Policing and Reform, created to implement the department's federal consent decree, had 23.6% of its 605 positions vacant for the full eight months — the unit built to fix the department is missing nearly a quarter of its own staff. Where the city has trouble filling jobs, it pays overtime instead: CPD's 2026 overtime budget nearly doubles the 2025 figure, up $101.1 million, the same BGA analysis found — the single largest line-item increase in the department's budget.

The $130 million gap that opened in July 2026 is not a one-off.▸ The city's own 2026 Budget Forecast, published in August 2025 before that year's budget was even proposed, warned Chicago would end 2025 with an in-year deficit of $146.0 million and faced a $1,149.3 million gap to close just to pass a balanced 2026 budget — itself worse than the $1.12 billion the city had forecast a year before that. The Civic Federation called the adopted 2026 budget's opening gap the largest in the city's history, rivaled only by 2021's pandemic-era shortfall, and found the final package still left the city's structural problem — spending growing faster than recurring revenue — unaddressed. Chicago's own budget task force told council members in June 2026 that 2027 is already tracking toward a $680 million gap, down from a preliminary estimate of more than $1 billion a year earlier — progress, if the pattern of this year holds, that a mid-year revenue report could still erase.

Figures cover City of Chicago funds and departments only, drawn from the most recent published editions of each cited document as of July 2026; Chicago Public Schools, Cook County, and the Chicago Teachers' Pension Fund operate separate budgets and are not included here.