Chicago Faces Cash Flow Crunch, Delays Pension Payment

Mayor's aides cite property tax delays and TIF surplus as factors behind partial pension payment

Published on Feb. 9, 2026

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Top Chicago officials, including Budget Director Annette Guzman, Comptroller Michael Belsky, and interim Chief Financial Officer Steve Mahr, explained to the City Council that a cash flow crunch has forced Mayor Brandon Johnson to make the city's $260 million advance pension payment in two installments, rather than all at once. Delayed property tax payments from Cook County and the mayor's decision to declare a record $1 billion tax increment financing (TIF) surplus were cited as key factors behind the partial payment.

Why it matters

Chicago's pension obligations are a major financial burden, and any delays or reductions in payments could further strain the city's finances and potentially impact its bond rating. The partial pension payment also raises questions about the mayor's commitment to the alternative budget plan passed by the City Council over his objections.

The details

Officials said the city has been waiting on roughly $135 million in delayed property tax payments from Cook County due to issues with a computerized overhaul of the county's tax system. This forced the city to make advance payments to its four employee pension funds by selling off assets. The mayor's decision to declare a $1 billion TIF surplus to help the Chicago Public Schools and fund a new teachers contract also exacerbated the cash flow crunch. Despite the partial payment, the city's investment officer said the pension funds are 'thrilled' to be receiving the money, and the delay should not impact their investment strategies.

  • The first quarter of the year always includes $1.2 billion in payments to the four city employee pension funds required by state law.
  • The city has been promised the rest of the delayed property tax payments from Cook County by April 1, though officials expressed skepticism given previous missed deadlines.

The players

Annette Guzman

Chicago's Budget Director.

Michael Belsky

Chicago's Comptroller.

Steve Mahr

Chicago's interim Chief Financial Officer.

Brandon Johnson

The Mayor of Chicago.

Toni Preckwinkle

The President of the Cook County Board.

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What they’re saying

“The fact that the money is coming in large chunk amounts tells me the system is still broken. There's not a fix in sight.”

— Craig Slack, Chief Investment Officer, City Treasurer's Office (suntimes.com)

“The fact that they got half and it's above and beyond — they're thrilled.”

— Craig Slack, Chief Investment Officer, City Treasurer's Office (suntimes.com)

What’s next

The city has promised to make the full $260 million pension payment by April 1, though officials cautioned that the timing depends on when the issues with the Cook County property tax system are resolved.

The takeaway

Chicago's cash flow crunch and partial pension payment highlight the city's ongoing financial challenges, including the burden of pension obligations and the impact of delays in property tax collections. The situation also raises questions about the mayor's ability to implement his alternative budget plan and manage the city's finances effectively.