Key Takeaways
- • The Chicago City Council voted 44-6 on Monday to direct the $75 million paid by Stonepeak Partners for the city's parking meter concession into an extra payment to the city's underfunded pension funds, opening a new hole in the 2027 budget.
- • Mayor Brandon Johnson's proposed budget already sends more than $2.94 billion to the four pension funds; the council's change lifts Chicago's total 2027 pension payment to $3.01 billion, a record, per the agreement and council measure.
- • The new gap must be closed with spending cuts, new taxes or more borrowing before the budget is approved by year-end, and alderpeople who pushed the change have not offered a bridging proposal.
- • Chicago's four pension funds carried $36.4 billion in debt at the end of 2025, with the police and firefighter funds only about 25% funded, versus an average of roughly 70% for other large city pension funds.
Summary
The Chicago City Council voted 44-6 on Monday to use $75 million the city received from the new owners of its 36,000 parking meters to make an additional payment to its underfunded pension funds, according to WTTW News. The $75 million was paid by New York-based Stonepeak Partners once its purchase of the parking meter concession closed. The deal, negotiated by a group of council members, earmarked those funds for the pensions.
Mayor Brandon Johnson's proposed 2027 budget already sends more than $2.94 billion to the city's four pension funds, including $364 million more than state law requires. Johnson had counted the $75 million toward the supplemental pension payment the city had already anticipated making. The alderpeople who negotiated the deal objected, arguing the Stonepeak proceeds should be added on top of the $2.94 billion, comparable to a household using a windfall to pay down mortgage principal. Ald. Pat Dowell (3rd Ward) said the change would save taxpayers $213 million over several decades, while Ald. Jason Ervin (28th Ward) warned that the city would have to cut spending on programs including libraries and homeless services to absorb the windfall. Six members, including Ervin, voted against the measure.
The vote opens a new gap in the 2027 budget that must be closed through spending cuts, new taxes or more borrowing. Johnson's budget also relies on roughly $100 million from reviving a so-called head tax, which the council rejected a year ago and which faces uncertain prospects. Under the parking meter agreement, Stonepeak will also share 5% of its profits with the city, expected to yield $376.2 million over 57 years; those funds are earmarked for pensions on top of the required and supplemental payments. With the change, Chicago will pay a record $3.01 billion into its pension funds in 2027.
According to the city's audited annual financial report, Chicago's pension debt rose about $500 million in 2025 to $36.4 billion, and has grown nearly 11% since 2020, adding roughly $3.5 billion. The police fund is 25.5% funded and the firefighters' fund is 25.2% funded, while the laborers' fund is the best-funded at 44.1% and the municipal employees' fund is at 28.2%. Since 2023, the city has paid more than $1 billion above state requirements into the funds.
Mayor Brandon Johnson's proposed 2027 budget already sends more than $2.94 billion to the city's four pension funds, including $364 million more than state law requires. Johnson had counted the $75 million toward the supplemental pension payment the city had already anticipated making. The alderpeople who negotiated the deal objected, arguing the Stonepeak proceeds should be added on top of the $2.94 billion, comparable to a household using a windfall to pay down mortgage principal. Ald. Pat Dowell (3rd Ward) said the change would save taxpayers $213 million over several decades, while Ald. Jason Ervin (28th Ward) warned that the city would have to cut spending on programs including libraries and homeless services to absorb the windfall. Six members, including Ervin, voted against the measure.
The vote opens a new gap in the 2027 budget that must be closed through spending cuts, new taxes or more borrowing. Johnson's budget also relies on roughly $100 million from reviving a so-called head tax, which the council rejected a year ago and which faces uncertain prospects. Under the parking meter agreement, Stonepeak will also share 5% of its profits with the city, expected to yield $376.2 million over 57 years; those funds are earmarked for pensions on top of the required and supplemental payments. With the change, Chicago will pay a record $3.01 billion into its pension funds in 2027.
According to the city's audited annual financial report, Chicago's pension debt rose about $500 million in 2025 to $36.4 billion, and has grown nearly 11% since 2020, adding roughly $3.5 billion. The police fund is 25.5% funded and the firefighters' fund is 25.2% funded, while the laborers' fund is the best-funded at 44.1% and the municipal employees' fund is at 28.2%. Since 2023, the city has paid more than $1 billion above state requirements into the funds.
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