A majority of aldermen signed onto a letter Thursday objecting to reinstating Chicago’s head tax and other components of Mayor Brandon Johnson’s 2026 budget plan.
The 27 aldermen said they were “gravely concerned” about what Johnson’s pitch for a monthly $21-per-employee tax on larger companies would do for job growth and companies leaving Chicago. The city’s old head tax, phased out in 2014, was cast as the next frontier in the mayor’s largely-stalled tax-the-rich agenda, as he seeks to plug a $1.19 billion deficit in next year’s budget.
“We ask your administration to model alternative budget scenarios that exclude this jobs tax,” the letter says.
Other demands the aldermen laid out include asking the Johnson administration to look at more cuts, as identified by Ernst & Young after the city hired them this spring to look under the city’s hood to find more savings and efficiencies. The letter calls for representatives from the accounting firm to testify before City Council’s budget committee to explain why some recommendations were rejected.
Lastly, the City Council bloc says they were “very concerned” about further borrowing for operating expenses such as backpay for the new firefighters’ contract, saying that “we believe such practices undermine long-term fiscal stability.”
Johnson’s team said the city would issue a new bond to make good on $185 million owed in back pay to Chicago firefighters, a $90 million “global” payment to resolve misconduct claims against former Chicago police Sgt. Ronald Watts, among other legal settlements. While that frees up dollars in this year’s budget, it tacks on interest costs in future years — firefighter debt would be paid back over three years, city briefing documents said, and the settlements over five years.
The aldermen signing on were mostly mayoral opponents and moderates but also included Johnson’s handpicked Finance Committee chair Ald. Pat Dowell and Ald. Desmon Yancy, a member of the Progressive Caucus, which is supposed to be Johnson’s most ideologically aligned bloc.
Johnson introduced a $16.6 billion budget for next year that, besides reinstating a corporate head tax, scales back an extra pension payment and adds other taxes such as a new charge on social media tech giants. But it largely avoids layoffs and does not raise property taxes.
Other one-time tricks — a record $1 billion sweep of tax increment financing funds, refinancing old debt, borrowing money to pay for settlements and labor contracts and a continued hiring freeze — would help cover another significant chunk of the deficit.
The city’s business community immediately tried to put a kibosh on Johnson’s head tax proposal, rejecting the mayor’s framing that it would be an investment in fighting crime. His team has projected $100 million would be raised, going into a so-called “Community Safety Fund” to partly support some programs that are losing COVID-19 stimulus funds this year.
Johnson’s reaction? “Well, that sounds awfully unreasonable on the part of the business community, and their hard line against funding community safety … doesn’t really reflect the values of the city of Chicago,” he said during a Tuesday news conference.
