(Bloomberg) -- Chicago will contribute $1.18 billion to pensions in 2018 as the junk-rated city stepsup payments to put its retirement funds on a path to solvency, evenas the unfunded liabilities keep growing.

The city will pay $792 million to the police and fire pensions,$344 million to the municipal workers’ fund and $48 million to thelaborers’ fund next year, according to its annual financialanalysis released Monday.

The metropolis forecasts a $114.2 million budget deficit in2018, the smallest since at least 2007, the report shows.

Mayor Rahm Emanuel has taken steps including raising propertytaxes and getting approval from the gridlocked state government tokeep the retirement funds from running out of money.“All four pension funds are on the road to solvency with dedicatedrevenue supporting increasing pension contributions in 2018,”Emanuel said in a letter included in Monday’s report.

Emanuel has enacted higher property taxes and utility levies tohelp cover these higher payments.

The city also won Illinois’s approval to overhaul its municipaland laborer retirement funds, which had been on track to run out ofmoney by 2025 and 2027, respectively.

Changes, included in the state budget package this month, allowChicago to contribute more money and make new employees pay moreinto their pensions.

Despite the changes, the city’s pension debt is still rising.Chicago’s pensions are struggling with $35.8 billion of unfundedliabilities as of Dec. 31, up from $33.8 billion a yearearlier.

The shortfall comes after years of not paying enough into thefunds. Chicago’s ballooning debt to its pension funds has weighedon the city’s finances and led Moody’s Investors Service two yearsago to cut its bond rating to junk.

Copyright 2018 Bloomberg. All rightsreserved. This material may not be published, broadcast, rewritten,or redistributed.