(Bloomberg) -- Chicago Mayor Brandon Johnson said on Wednesday he will close a deficit of more than half-a-billion dollars for the coming year by reining in costs, taking advantage of improved revenue and taking money from pools of funds earmarked for economic development. 

Johnson said he’s keeping his promise not to boost property taxes. He unveiled his first budget, with $16.6 billion of total expenditures, in prepared remarks for an address at City Hall. 

The first-term mayor, who took office in May, is trying to deliver on his progressive social and economic campaign promises amid financial constraints brought on by rising migrant, pension and salary costs. Those expenses are surging at a time when federal aid is running out.

“This administration is also committed to fiscal responsibility and ensuring we have the resources to pay for new investments,” Johnson said, according to his prepared remarks on Wednesday. “We will not repeat the failures of the past by spending money we do not have and bankrupting our future.”

Pensions, Migrants

In September, the mayor had forecast a deficit of $538 million for 2024, in part because of pension contributions plus the costs of addressing the thousands of migrants that have come to the city. 

On Wednesday he proposed balancing the budget with $243 million in savings from healthcare costs and other expenses, a strategic bond refinancing and $321 million in projected revenue improvements.  

The city also expects to tap higher surpluses from tax increment district funds, collections of taxes from rising property valuations that are intended to spur development. Johnson said he also plans to make “strategic use of the City’s fund balance.”

The mayor’s forecast last month included a contribution of about $2.7 billion toward the city’s four pensions, drawing from the main operating account and other city funds to pay for benefits for its severely under-funded retirement systems. That total included an advance payment of more than $300 million into the city’s severely underfunded pensions. 

‘Down Payment’

On the expenditure side, Johnson said he plans to increase funding for mental health services and housing. The city will call on state and local partners to help with the costs of the rising number of migrants in the city from border states. His budget also plans to make the advanced pension payment. Total expenditures are up about 1.4% from the prior fiscal year. 

“The 2024 Budget is a down payment on this administration’s priorities to empower people,” Johnson said.

Rising crime, a $35 billion pension hole and soaring costs to care for the more than 18,000 migrants who have arrived in Chicago since August 2022 have all weighed on the mayor as he crafted his inaugural spending plan.

(Updates with mayor’s comments from fourth paragraph)

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