Chicago Budget Director Annette Guzman abruptly resigned Monday, forcing Mayor Brandon Johnson to head into the all-important investors conference and a grueling election year budget season with a whole new financial team.
One week after Acting Chief Financial Officer Steven Mahr and Mahr’s top deputy jumped ship without warning or explanation, Guzman followed them out the door.
What Secretary of State and mayoral contender Alexi Giannoulias has called the “revolving door of senior leadership” under Johnson is spinning fast.
Ald. Matt O’Shea (19th) was part of the renegade coalition that rejected Johnson’s corporate head tax and passed an alternative, $16.7 billion budget with major elements that the mayor has never stopped fighting.
O’Shea said Guzman’s departure is the most surprising given the role she played in crafting and defending Johnson’s budget and battling the revenue items he didn’t like.
Her role as Johnson’s field general was on full display during a City Council hearing last month on the city’s mid-year financial report, O’Shea said.
During the hearing, Guzman and Mahr denied that foot-dragging on the very revenue items that Johnson opposes had caused a $90 million mid-year budget shortfall and warned of layoffs.
Citing late property tax payments from Cook County, they also hedged on whether the city could afford to make the second half of a $260 million advance pension payment that was at the center of the budget battle and, if so, how much that additional payment would be.
“When several of my colleagues and myself posed legitimate questions about our financial status, she was very defensive and very aggressive in her responses,” O’Shea said.
“She said there were no issues. The only issue was that the budget our coalition passed was to blame for this. She was very quick to point the finger. Now all of the sudden, she’s out the door.”
In addition to the $90-million mid-year shortfall, Chicago is facing a $1 billion budget gap next year and has a $36-billion pension crisis. Police and fire pension funds are hovering dangerously close to insolvency and needed a loan from the city to avoid selling assets to cover liabilities.
The question from investors assembling in Chicago for their annual meeting, and from Wall Street rating agencies that have already downgraded Chicago, is likely to be the same as the one that O’Shea is asking.
“Who’s minding the store? What is going on? What is the mayor doing to get us on better financial footing?” O’Shea said
“The fact that he can’t even retain his top financial team that he handpicked at this critical juncture should be alarming to everybody.”
In a statement, Johnson thanked Guzman for her service.
“As Annette steps away from her role to focus on caring for her family, we are deeply grateful for all she has done for our City and wish her and her loved ones nothing but the very best. Family comes first, and we stand with her during this important time,” Johnson said.
Finance Chair Pat Dowell (3rd) could not be reached for comment on Guzman’s resignation.
Last week, Dowell all but blamed Guzman for Mahr’s departure. She claimed that the acting CFO took “tons of shots for the administration when they basically hung him out to dry during hearings” before the City Council.
“When you step into a position like that, and you’re fairly junior, you need to have support, and I’m not sure he had that,” Dowell told the Sun-Times.
Asked whether it was Guzman who pulled the rug out from under Mahr, Dowell said, “Who is more senior? I couldn’t even point to somebody.”
O’Shea agreed with Dowell, telling the Sun-Times, “It’s become apparent to me that the budget director doesn’t play well with others in the sandbox. And we need a budget director, a comptroller and a chief financial officer working together.”