Chicago City Budget Analysis: Estimating Real Cost of Budgeted Positions from Publicly Available Data

BGA’s annual Budget Snapshots project seeks to supply policymakers and the public with analysis and historical context for Chicago’s municipal budgets. 

As part of that project, we are pleased to include in the 2027 Budget Snapshots a historical comparison of departmental budgets that features not only the budgeted and inflation-adjusted appropriations but also estimates of per-position and per-department pension and fringe benefit costs going back to 2018. For non-grant employees, these “fringe” costs have historically been treated as citywide lump sums under the “Finance General” section of the budget, rather than broken out by position and department.

Inclusion of fringe costs at the position and department level had a significant impact on several departments’ budgets relative to the total budgeted departmental expenses, BGA Policy’s analysis found. In general, when fringe costs are budgeted per-position rather than lumped together and assigned to the Finance General category:

• Departments with larger non-grant head counts make up a greater share of the overall departmental funding total.
  
• Heavily grant-funded departments, which already include estimated fringe costs in their departmental positions budget, make up a lower share of overall departmental funding.
  
• Bargaining units with more generous pension and benefits packages increase their departments’ shares of overall funding.

Including fringe costs provides a more accurate cost-of-service comparison between departments (and of each budgeted position at the departmental level), and we hope will provide useful context to the annual Budget Snapshots. 

In Chicago’s annual budgets, employee wages and salaries are budgeted per position (or per hour/month in the case of part-time employees), with all positions assigned to a specific departmental budget. A “fringe benefits” line item in departmental position budgets also accounts for benefit costs for grant-funded employees. Pension and benefit costs for non-grant-funded employees, however, are budgeted as citywide expenses, with lump-sum appropriations under the non-departmental “Finance General” umbrella. 

This practice can obscure part of the true cost of service for each department’s staffing needs, particularly in the cases of departments with a higher percentage of their budget dedicated to personnel expenses and departments whose employees receive the city’s most generous pension and benefits packages. 

To generate a viable estimate of those individualized costs, BGA Policy utilized publicly available data, including the positions and appropriations datasets, as well as city budget practices detailed in the annual Budget Overview and Department of Finance memos. 

Chicago’s Department of Finance produces annual fringe memos with salary-based calculations for the fringe cost of employees within the city’s four pension systems, as well as for both pensionable and non-pensionable part-time employees. The memos are primarily intended for use in calculating the full cost of grant-funded positions, which have their fringe benefits budgeted separately from non-grant employee costs. 

However, the city’s Office of Budget and Management also makes use of the fringe memo to calculate the statutorily-mandated “appropriations available to pay for the expenses” of three oversight departments: the Community Commission for Public Safety and Accountability, Civilian Office of Police Accountability, and Office of Inspector General. 

For purposes of determining whether those departments have received their mandatory minimum budgets, an OBM calculation included in the annual Budget Overview documents multiplies each relevant department’s total personnel services appropriations by the citywide average fringe value for a Municipal Employees’ Annuity and Benefit Fund (MEABF) employee, then adds the result to the department’s regular appropriations (as well as to certain calculated indirect costs, in the case of the Office of Inspector General). That total is considered representative of the “appropriations available to pay for the expenses” of each department, for purposes of determining whether the legally-mandated minimum funding level has been reached. 

For purposes of the BGA budget snapshots, BGA Policy has applied the fringe formulae from the DoF fringe memo to each budgeted position’s exact salary, rather than a citywide average. 

Each budgeted position was first sorted into its relevant pension fund, using a combination of bargaining unit, title code, and pay schedule/grade codes. The budgeted salary for each position or positions was then multiplied by the DoF fringe memo from the relevant year. Tying each individual salary to its relevant fringe multiplier provides as accurate an estimate as possible of fringe costs for full-time, non-grant positions. 

Part-time positions cannot be as accurately estimated, since budget data does not specify how many individual employees are represented by hours/months budgeted, nor which of those employees are eligible for pension and/or health benefits. The D0F fringe calculation for pensionable employees relies on a fixed per-employee pension amount, meaning it can only be used when a specific number of employees is known in addition to the budgeted hours/months.

Our estimate therefore uses the only available part-time fringe calculation that does not include a per-employee fixed value: the single multiplier for non-pensionable part-time employees. The resulting part-time fringe estimates will necessarily be an undercount, as at least some of the part-time hours and months included in the budget will be fulfilled by pensionable employees. 

The impact is marginal – part-time hours and months typically make up less than 5% of the locally-funded position budget in a given year – but accounts for a slight undervaluing of the BGA estimate relative to the fringe-relevant appropriation totals in the Finance General section. 

Breaking out departmental appropriations plus calculated fringe for a given budget year provides a more accurate side-by-side comparison of the departments’ relative costs of service than budgeted appropriations alone, as seen here using the current 2026 budget year as an example:

The personnel-heavy police and fire departments, with their generous benefits packages, see a significant increase in overall share of departmental funding. Taking estimated fringe into account at the department level, CPD’s share of overall departmental funding from 2018-2026 was on average 5.9% higher than the share shown by departmental budgets without fringe. CFD’s share averaged 2.8% higher. 

Heavily grant-funded departments such as the transportation, aviation, human services, and health departments made up a smaller proportion of overall funding once fringe was taken into account, largely because their budgets for positions already include a fringe benefit calculation of grant-funded employees. 

It is our hope, by including the per-position and per-department fringe cost estimates in the 2027 Budget Snapshots, that BGA Policy can continue to provide the public and policymakers with the most detailed context available for municipal budget cycles. 

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