Chicago's Next Mayor? Susana Mendoza on Fiscal Crises, AI, and Why City Hall Needs a Builder

When Susana Mendoza took office as Illinois Comptroller in December 2016, the state was staring down a $16.7 billion backlog of unpaid bills, a rainy day fund with just $48,000, and a credit rating one notch above junk. Vendors waited an average of 210

business days to get paid. Health care providers were threatening to disconnect patients from ventilators. It was, by any measure, the worst fiscal crisis in the nation at the time.

Nine years later, Susana has delivered ten credit upgrades, grown the rainy day fund to $2.4 billion, and brought the state’s payment cycle down from 210 days to 13. She did it by championing transparency legislation, engineering a bond deal that refinanced 12

percent interest rates down to 3.5 percent, and strategically targeting federal matching dollars to multiply the value of every state

dollar spent.

Now, as she prepares to leave the Comptroller’s office in January 2027 and signals a likely bid for Chicago mayor, Susana sat down with AI in Chicago to discuss what fiscal crisis management teaches us about the AI transition ahead—and why Chicago’s next

mayor needs to be a builder, not a bystander.

The Fiscal Turnaround: A Master Class in Crisis Leadership

The numbers tell the story, but Susana’s account of how she experienced them makes the story unforgettable. On her first day in

office, before she had even left the inauguration stage, she received an email from a constituent—a woman with a degenerative disease who relied on a ventilator and feeding tube to survive. The state hadn’t paid her health care bills in months, and her provider had set a cutoff date: December 21st, just days before Christmas. If the state didn’t pay, they would disconnect her.

That email set the tone for everything that followed. Susana immediately restructured the Comptroller’s payment priorities, moving

vulnerable populations—people in hospice care, adults and children with disabilities, patients on life support—to the front of the line. High-priced technology consultants were moved to the back. It was triage, and Susana ran her office like a fiscal emergency room.

The Transparency Problem Nobody Solved One of the most striking revelations from the conversation is how little visibility the Comptroller’s office actually had over the state’s liabilities. In her first week, Susana discovered that state agencies were sitting on billions of dollars in unpaid invoices that they simply hadn’t forwarded to her office. The law only required agencies to report their outstanding debts once a year—and even those

reports were based on data that was already months out of date by the time legislators saw them.

Its hard for lay people to understand: the state legislature was crafting annual budgets based on financial data that could be nearly a year old. Susana discovered a $19 million gap between what her systems showed and what a single nursing home provider was

actually owed. The then Governor Rauner opposed her transparency reforms. She overrode his veto and passed the Debt Transparency Act, which now requires agencies to report monthly and disclose the age of their outstanding invoices.

The Bond Deal That Changed Everything The strategic centerpiece of Susana’s fiscal turnaround was a $6 billion bond deal she championed against fierce political

opposition. The math was elegant: the state was accruing 12 percent in late payment penalties on its unpaid bills. Even at junk- adjacent credit ratings, Susana calculated the state could refinance at roughly 6 percent—and in the best case, far lower. She personally visited every editorial board in the state to make the case. The deal ultimately closed at 3.5 percent.

But the real innovation was what Susana did next. She targeted all $6 billion toward invoices that qualified for federal matching funds at 50 cents on the dollar, effectively turning $6 billion in state bonding authority into $9 billion in debt repayment.

Data Transparency as Infrastructure: The Technology Story

Susana describes herself as an early adopter of technology, and her track record backs it up. As Chicago City Clerk, she partnered with open-source data groups to release the city council code to developers and organized civic hackathons with other city officials,

including leaders from San Francisco. Her governing philosophy is straightforward: this data belongs to the public, and the public should be able to see how their money is being spent.

As Comptroller, she translated that philosophy into real-time public portals that track COVID-19 spending, asylum seeker expenditures, and state bond debt. These weren’t vanity dashboards. They were built to solve a governance problem: when the state’s own chief fiscal officer couldn’t see the full picture of its liabilities, no one could make good decisions. Susana’s transparency

reforms gave both lawmakers and the public the ability to see, in near real-time, where state dollars were going and how fast they were moving.

This matters for the AI conversation because it demonstrates something that most government technology projects fail to deliver: a

leader who understands that technology is a means to an end, not the end itself. Susana didn’t build portals because she wanted to modernize. She built them because she literally could not do her job without better data infrastructure. That kind of problem-driven technology adoption is exactly what cities will need as AI transforms the public sector.

The AI Reckoning: Why the Next Fiscal Crisis May Be Labor-Driven

The most forward-looking segment of the conversation centered on what AI-driven labor displacement could mean for state and city finances. What might happen if AI displaces a significant share of white-collar workers—particularly in a downtown like the Loop—

the resulting loss of income tax revenue, payroll taxes, and commercial real estate value could trigger a fiscal crisis on the scale of what Susana inherited in 2016. She didn’t dismiss it.

Susana described a recent panel at Loyola where she sat between a McKinsey representative and a food bank director. Her

observation was sobering: for the first time, food bank lines may include a constituency that has never imagined itself there. White- collar professionals who have historically felt insulated from economic dislocation may find themselves displaced by the same AI efficiencies that make their employers more profitable. And if that displacement happens at scale, the entire revenue model that funds state government, one that is built on payroll taxes and employment-driven consumption could be inverted.

Susana shared that dealing with fiscal crises whether due to a macroeconomic event or local AI economic and labor dislocations, she knows what to do when a state’s revenue model breaks and would surround her self with the right team of stakeholders to manage the turbulence.

The Mayoral Vision: Cranes, Not Committees

Susana has not formally declared a 2027 mayoral campaign, but the contours of her platform are unmistakable. She articulated a vision built on three interconnected pillars: public safety, growth and affordability, and innovation. Her framing is deliberately pro-

growth—she wants to see construction cranes in the skyline, not empty Loop office buildings. She wants Chicago to be a city where startups don’t just launch but stay.

On innovation, Susana made a commitment that should resonate with the AI and technology community: she wants to assemble a

team of experts—not a blue-ribbon commission, but a working group of operators and practitioners who understand AI, workforce disruption, and urban economics—to build a proactive strategy before the next crisis arrives.

Her critique of recent city leadership was pointed: in her mind, Chicago is suffering from a deficit of competent, execution-oriented leadership. She pointed to the Cook County tax modernization project—a technology initiative that has consumed ten years and

enormous resources without resolution—as a cautionary tale of what happens when elected officials don’t understand technology well enough to manage vendors and hold projects accountable.

Whether she runs or not, her perspective on what Chicago needs from its next mayor is among the most informed and substantive

in the field.

Why This Episode Matters for the AI Ecosystem

Most conversations about AI in government happen at the level of policy abstractions: regulation, ethics frameworks, responsible AI principles. This episode is different because Susana brings the perspective of someone who has actually managed a government through crisis, built data infrastructure under extreme constraints, and delivered results that can be measured in credit upgrades, payment cycles, and dollars saved.

For founders, operators, and executives in the Chicago AI ecosystem, this episode offers three critical takeaways:

1. Fiscal literacy is an AI readiness issue.

If AI-driven labor displacement reduces payroll tax revenue and commercial real estate values, cities and

states will face fiscal crises that no amount of AI policy will solve. Leaders who understand both technology

and fiscal management will be the ones who navigate the transition successfully.

2. Transparency infrastructure is the prerequisite for AI in government.

Susana’s experience shows that you cannot govern what you cannot see. Before cities can deploy AI to

optimize service delivery, they need the kind of real-time data visibility that Susana had to fight for at the

state level.

3. Chicago’s 2027 mayoral race will shape the city’s AI future.

The next mayor will need to decide whether Chicago becomes a destination for AI talent and capital or

continues to lose ground to coastal hubs. Susana’s track record of execution-oriented, technology-forward

governance positions her as one of the few candidates with the credibility to make that case.

Listen to the full episode on AI in Chicago wherever you get your podcasts. For more insights from the operators, builders, and thinkers scaling applied AI from the heart of the Midwest, subscribe and follow at chicagopodcast.ai

AI in Chicago is hosted and produced by Khullani Abdullahi, Founder of Techne AI.