Finance Decoder Report

Chicago's Fiscal
Health: Decoded

A city that can't pay its bills can't invest in its future. Strong Towns calls this the solvency principle. The charts below show how Chicago has struggled to stay solvent, making commitments for decades while leaving the next generation to pay for them.

Data: 2003–2024 via Chicago Annual Comprehensive Financial Reports

The Finance Decoder & #DoTheMath

Strong Towns Chicago's #DoTheMath initiative uses the Finance Decoder to chart 20+ years of city financial data. We're not prescribing specific fixes here. The goal is to give everyday Chicagoans the context to ask sharper questions of their elected officials. Every budget, project, and policy should be able to answer these three:

01
Sustainability
"Can Chicago keep providing the services it provides today a generation from now?"
02
Flexibility
"If something unexpected hits (a recession, a disaster, a spike in costs), does Chicago have room in the budget to respond?"
03
Vulnerability
"How much of Chicago's budget depends on money from the state or federal government?"

When a city's finances are clear, leaders can plan ahead: investing in transit, housing, and parks on a predictable schedule. Transparent local accounting makes that possible. Without it, you get what Chicago has now: credit downgrades, budget fights, and surprise tax hikes.

How did we get here?

Strong Towns founder Charles Marohn argues that cities go broke for one core reason: they build things that cost more to maintain than they'll ever produce in revenue. Chicago is no exception. Here's how the pattern plays out, and what Strong Towns says the alternative looks like:

▸ Cities build more than they can maintain

After World War II, cities across America spread out with wide roads, parking lots, and low-density development, what Strong Towns calls "The Suburban Experiment." New growth appears to work at first because new subdivisions and commercial districts bring in property taxes and fees right away. But that kind of spread-out growth is expensive to maintain, and often costs more to service over time than it generates in revenue. When those bills come due and the money isn't there, the response is often more new development to chase the next round of revenue.

In Chicago, that cycle left streets, water pipes, sewers, and streetlights deteriorating for decades while the city focused on new projects.

▸▸ Short-term fixes create long-term problems

When money got tight, leaders turned to quick patches: selling off public assets, borrowing to cover today's bills, and pushing costs into the future. Each "fix" created bigger problems down the road.

Economists call this temporal discounting: tomorrow's problem always feels less urgent than today's.

▸▸▸ Pensions followed the same pattern, at massive scale

For decades, city leaders put less money into retirement funds than they knew was needed, because the bill wouldn't come due until later. Promise benefits now, skip the payments, and assume future growth will cover the gap. When it doesn't, the city borrows more or cuts services to make up the difference. The result is roughly $35.7 billion in unfunded pension liabilities, the single largest item on the city's balance sheet.

The Strong Towns approach is simple in principle, even if politically difficult: maintain what you have, grow gradually, and invest in things that pay for themselves.

The Numbers at a Glance

Four numbers every Chicago resident should know, pulled directly from the city's 2024 Annual Comprehensive Financial Report (ACFR).

−$63.7B
Net financial position
Chicago owes $63.7 billion more than it has. In 2003, the gap was $9 billion.
26%
Pension funded ratio
Across its four pension funds, Chicago has 26 cents for every dollar promised to retirees, a $35.7 billion gap.
4.4×
Debt-to-revenue ratio
Chicago's debt is 4.4 times its annual revenue. That's like owing $440,000 on a $100,000 salary.
61%
Infrastructure value remaining
Chicago's infrastructure has lost 39% of its useful life on paper, up from 27% in 2003. An accounting estimate, but the steady decline tells a story.

The charts below break it down, grouped by those three questions. Click each section to explore.

Sustainability Can Chicago keep this up long-term?
01

The Bottom Line: How Deep in the Hole Is Chicago? [Net Financial Position]

Cash and financial assets (excluding roads, buildings, etc.) minus total liabilities

Hover chart for details · Toggle cities above to compare
What this chart shows: Everything Chicago has in the bank, minus everything it owes: pensions, bonds, and other debts. The result is negative $63.7 billion. Twenty years ago it was negative $9 billion. The cliff around 2015 is when a new accounting rule (GASB 68) required cities to report the full size of their pension promises for the first time. The debt was already there; the reporting finally showed it.
What this means for you
That $63.7 billion gap will eventually be addressed through some combination of higher taxes, lower spending, or reduced benefits. Refinancing stretches payments out, but doesn't reduce the total owed. To meaningfully close this gap, the city would need to take in more than it spends, consistently, for many years.
How deep is the debt? Three more ways to measure it
02

How Many Years Would It Take to Pay Off the Debt? [Net Debt-to-Total Revenues]

Hover chart for details · Toggle cities above to compare
Think of it this way: If Chicago devoted every dollar of revenue to paying off debt and spent nothing else, it would take 4.4 years. The jump in 2015 is the same pension reporting change described above, not new debt. At that peak it would have taken over 6 years. For a rough sense of scale, that's like a household earning $100,000 carrying $440,000 in debt. (Cities aren't households, but the ratio gives a feel for the weight of the obligation.)
Read the fine print
The ratio improved from 6.2x in 2015 to 4.4x by 2024, but much of that drop came from revenue growing (including a temporary boost from pandemic-era federal aid), not from paying down what the city owes. In 2003, this ratio was under 2x.
03

Could the City Cover Its Bills Tomorrow? [Financial Assets-to-Total Liabilities]

Hover chart for details · Toggle cities above to compare
Set aside physical infrastructure for a moment. Count only what Chicago has in cash, investments, and receivables, then compare that to everything it owes. The result: the city can cover about 22 cents of every dollar of its obligations with money it actually has on hand. The drop around 2015 is the same pension reporting change, not a sudden new expense.
So what?
The other 78 cents depends on future tax collections that haven't happened yet, primarily to cover pension obligations already locked in. The ratio has ticked up slightly since 2016, but the gap remains wide.

The chart above excludes physical assets like roads and buildings. What happens when we add them back in?

04

If Chicago Sold Everything, Could It Pay What It Owes? [Assets-to-Liabilities]

Hover chart for details · Toggle cities above to compare
Now add physical infrastructure back in: every road, bridge, fire station, and water main the city owns. Divide the total by what Chicago owes. Below 1.0, the city is underwater. Chicago crossed that line in 2009 and hasn't resurfaced. The steeper drop around 2015 reflects that same pension reporting change.
What this tells you
Even with all physical assets included at book value, the total still falls short. Some assets may be worth more in practice, but this is the standard accounting measure. The trend has moved in one direction for two decades.
Flexibility How much room does Chicago have to adapt?
05

How Fast Is Chicago's Infrastructure Wearing Out? [Net Book Value-to-Cost of Tangible Capital Assets]

Hover chart for details · Toggle cities above to compare
How much useful life is left in what Chicago has built? This chart compares what the city's physical assets are worth after wear and tear (a method called depreciation) to what they originally cost. That number has fallen steadily from 73% to 61% over 20 years. Depreciation is an accounting estimate, not a pothole-by-pothole inspection, but a steady decline over two decades suggests the city isn't reinvesting fast enough.
The catch
Deferred maintenance compounds. Skip a year of repaving and the road degrades faster, costing more to fix later. The decline in this ratio is slow enough to go unnoticed politically, until a water main bursts or a viaduct gets condemned. Chicago's own 2025–2029 Capital Improvement Plan identifies billions in deferred needs.
06

How Much Revenue Goes Straight to Interest Payments? [Interest-to-Total Revenues]

Hover chart for details · Toggle cities above to compare
Of every dollar Chicago collects, how many cents go just to interest, before paying down any actual debt? At the 2015 peak, nearly 10 cents of every dollar. That spike came after a credit downgrade triggered penalty clauses in borrowing agreements, temporarily driving up costs. The city responded with a record $543 million property tax increase and new fees.
Look closer
In 2017, the city found a way to lower its borrowing costs. It created something called the Sales Tax Securitization Corporation (STSC), essentially a separate entity that borrows against Chicago's sales tax revenue at lower interest rates than the city could get on its own. That swapped expensive, unpredictable debt payments for cheaper, more stable ones. By 2024, interest costs are down to about 4 cents per revenue dollar. Chicago still owes just as much; it simply pays less each year to service that debt. And this chart only covers interest on bonds and loans. Annual pension contributions, which grew from $0.59 billion in 2016 to $2.75 billion in 2024, are a separate cost on top of this.
Vulnerability How dependent is Chicago on outside help?
07

How Much Money Comes from State and Federal Government? [Government Transfers-to-Total Revenue]

Hover chart for details · Toggle cities above to compare
What share of Chicago's revenue comes from Springfield or Washington instead of local taxes and fees? The 2020-2021 spike is federal COVID relief (ARPA). That money has been spent, and Chicago is back to around 9%. The trend since 2003 has generally moved toward less outside dependence.
Don't count on it
State and federal priorities change. Programs get cut, funding gets paused, administrations shift direction. In 2026, 20 of the 25 largest U.S. cities are running budget deficits as federal support shrinks. Chicago is no exception: $2.1 billion in approved Red Line funding was frozen. A financially healthy city cannot count on outside help to close its gaps. The only revenue Chicago fully controls is local.

The money comes in.
The promises keep piling up.

Chicago doesn't have to miss a bond payment to "default" on its residents. Deferred maintenance, underfunded pensions, and rising debt are already shaping what the city can and can't do for you.

Send these charts to your alderperson and ask:

  • Pension funds have 26 cents for every dollar promised. What's the plan to close the $35.7 billion gap without cutting services or raising property taxes again?
  • Infrastructure is wearing out faster than it's being replaced. Why are we spending on highway expansion when existing roads, transit, and bike infrastructure need repair first?
  • The city owes 4.4 times what it brings in each year. Before borrowing more, can you show the project will generate enough value to justify the debt?
  • Last year's budget was called "balanced." How much depended on one-time windfalls or refinancing?

Tell them you want a budget built on Strong Towns principles: maintain what we have, and stop passing the bill to the next generation.

Your City Needs You Join Strong Towns Chicago

Hungry for more?

Source data
➔ Finance Decoder DataRaw data behind every chart on this page ➔ Chicago's ACFRsThe city's official audited financials, published yearly
Go deeper
➔ 2025–2029 Capital Improvement PlanWhere the city plans to spend on infrastructure ➔ Civic Federation Pension DashboardInteractive funded ratios for all four city pension funds
Strong Towns
➔ The Finance DecoderHow the tool works, what it measures, and how Chicago compares to other cities ➔ Strong Towns: A Bottom-Up RevolutionThe book that started the movement, by Charles Marohn
Follow the conversation
➔ A City That WorksPolicy analysis and ideas on how to make Chicago work better ➔ The Last WardChicago government accountability and City Hall decision-making

About this data

Source: Chicago's Annual Comprehensive Financial Reports (ACFR), 2003-2024. Comparison cities drawn from their respective ACFRs. Figures are not adjusted for inflation.

Pensions: Covers the city's four funds (Municipal, Police, Fire, Laborers). The sharp shifts around 2015 are due to GASB 68, a reporting change. The obligations already existed; only the reporting was new. Figures represent long-term actuarial obligations, not cash due today.

Infrastructure: Depreciation-based metrics are accounting estimates, not physical condition assessments.

This page is intended to inform public discussion, not to provide financial advice. Spot an error? Let us know.

Last updated March 2026