>>> CHICAGO'S PENSION WOES WORSENED IN 2022 AGREED TO THE ANNUAL FINANCIAL REPORT.

HEATHER JOINS US NOW WITH MORE ON THE TOUGH CHOICES FACING THE MAYOR.

WILL HAVE KNOWN FOR A WIRE WHILE FINANCES HAVE BEEN PINCHED, HOW DID THEY GET WORSE IN 2022?

>> IN ALL THE CITY OWES $35.4 BILLION TO ITS FOUR PENSION FUNDS.

THAT IS FOR POLICE, FIRE, LABORERS AND MUNICIPAL EMPLOYEES.

THAT THAT GROUP 5% IN 2022 AND THAT IS ALMOST DOUBLE THE AMOUNT THE DEBT GREW IN 2021, SIGNIFYING THIS PROBLEM IS GETTING WORSE.

>> THE CITY, AS YOU SAID, HAS FOUR PENSION FUNDS WHICH PAY BENEFITS AS EMPLOYEES RETIRE.

CAN I COVER THE COSTS?

>> THAT IS LITERALLY THE $35 MILLION QUESTION.

THESE FUNDS ARE VASTLY UNDERFUNDED.

THE WORST SHAPE IS THE FIREMAN'S PENSION FUND WHICH IS ONLY 18% FUNDED.

WHICH REALLY RAISES INTO QUESTION WHETHER THEY WILL BE ABLE TO COVER THE COST AS MORE PEOPLE RETIRE .

AND THAT IS WHY THIS IS SUCH A BIG ISSUE FOR THE CITY'S FINANCIAL FUTURE.

>> 18%.

FAR FROM IT.

FORMER MAYOR LIGHTFOOT LEFT OFFICE, SHE AND HER ADMINISTRATION HAD MADE PROGRESS IN GETTING THE SHIP RIGHT, WHAT HAPPENED?

>> IT WAS A BAD YEAR IN THE STOCK MARKET.

THE CITY NOT ONLY MAKES BILLIONS OF DOLLARS IN CONTRIBUTIONS INTO ITS PENSION FUNDS BUT THAT MANY IS IN TURN INVESTED.

WHEN THOSE INVESTMENTS GO DOWN, THE CITY LOSES MONEY AND THAT IS WHY THIS DEBT GREW, EVEN THOUGH THE CITY IS PAYING $1.3 BILLION MORE INTO IT AS OF 2022, THEN IN 2019.

>> SO THAT LEAVES OF COURSE MAYOR JOHNSON BETWEEN A ROCK AND A HARD PLACE.

AFTER PROMISING TO USE RESOURCES TO INVEST IN PEOPLE, RATHER THAN TO PAY OFF DEBT, WHAT IS HIS PLAN?

>> THAT PLAN IS VERY MUCH A WORK IN PROGRESS.

HE HAS FORMED A WORKING GROUP TO EXAMINE THESE ISSUES AND OTHERS ASSOCIATED WITH THE CITY'S PENSION.

THAT GROUP MET FOR THE FIRST TIME JUNE 21 AND IN THE NEXT COUPLE OF WEEKS WE EXPECT THAT GROUP WILL ANNOUNCE SOME SORT OF PLAN GOING FORWARD, BUT THIS PROBLEM WAS NOT CRATED OVERNIGHT AND IT WILL NOT BE