Video: The WTTW News Spotlight Politics team breaks down the biggest headlines of the day. (Produced by Alexandra Silets)
In his inaugural address on Monday, Mayor Brandon Johnson pledged to increase the amount of money flowing into the city’s coffers and use that new revenue to invest in Chicagoans “without breaking the backs of working people with fines, fees and property taxes.”
Less than 48 hours later, a progressive nonprofit dedicated to reducing the power of big corporations laid out a plan to do just that by hiking taxes by approximately $8 billion and saving more than $5 billion by reducing the Chicago Police Department’s budget and changing the way the city borrows money and handles its pension funds.
The “moral budget” by Saqib Bhatti and Gabriela Noa Betancourt of the Action Center on Race & the Economy, known as ACRE, urges Johnson and the City Council to take a new approach to “the underlying issues that lead to crime and violence” by “standing up to major corporations that don’t pay what they owe” and “saying no to entrenched interests.”
The plan detailed by ACRE shares many of the goals Johnson campaigned on, including new investment on Chicago’s South and West sides and fully funded neighborhood schools. That means the debate among progressive political organizations and the mayor they helped elect will center on what is possible – and how best to achieve those objectives.
ACRE also backed the plan authored by Ald. Rossana Rodriguez Sanchez (33rd Ward), known as Treatment Not Trauma, that calls for publicly run mental-health clinics to be reopened and for social workers, not police officers, to respond to 911 calls for help from those experiencing a mental health crisis. Johnson supports that proposal as well.
Bhatti is a member of Johnson’s transition team, serving on the Economic Vitality & Equity Subcommittee.
ACRE’s plan, titled “First We Get the Money,” would raise billions more than the platform that Johnson campaigned on, which proposed $800 million in new taxes.
ACRE backed Johnson’s call to tax big firms for each Chicagoan they employ. In 2011, the Chicago City Council approved a plan from former Mayor Rahm Emanuel to eliminate a $4-per-employee monthly tax that had been in place for decades.
Johnson’s plan would generate more than $20 million by charging large companies that perform 50% or more of their work in Chicago $4 per employee. However, ACRE calls for companies with more than 50 employees to pay $33 per worker per month, generating $106 million.
ACRE’s plan echoes Johnson’s call to generate $98 million by boosting the tax on jet fuel sold at Chicago’s airports from 5 cents to 14 cents per gallon. Both Johnson and ACRE back the proposal known as “Bring Chicago Home,” which would hike taxes on the sales of properties worth $1 million or more to generate more than $100 million to fight homelessness in Chicago.
Both ACRE and Johnson back a plan to impose a tax on financial transactions. While Johnson would add a $1 or $2 tax to each securities trading contract to generate $100 million, ACRE’s plan has a much larger scope. It would impose a $1 to $2 tax per trade that could generate $10 billion to $12 billion, with at least $2 billion earmarked for Chicago with the rest flowing into state coffers.
However, Gov. J.B. Pritzker publicly opposes that proposal, and said so during his first meeting with Johnson after his election. Because it would require a change in state law, Pritzker’s opposition means it is a nonstarter.
While Johnson rejected calls during the campaign to impose a city income tax, ACRE calls for those who live or work in the city and earn more than $100,000 to pay a 3.5% tax to generate approximately $2.1 billion annually. Levying that tax would require a change in state law, and could run afoul of the Illinois Constitution, which requires income taxes to be flat – or not based on income.
ACRE also wants to levy a 0.4% “wealth tax” on the wealthiest 10% of Chicagoans to generate $960 million annually. A similar statewide proposal failed to advance through the Illinois General Assembly this session. Johnson’s budget plan makes no mention of such a tax.
ACRE did not echo Johnson’s call to boost Chicago’s hotel tax by $1 per room per night to generate $30 million.
ACRE also wants to tax the largest digital advertising platforms, including Google, Facebook and Amazon, to generated $193 million. Johnson has not backed such a tax, which would require a change in state law. ACRE would also use tax increment financing funds to boost the city’s bottom line. TIF districts capture all growth in the property tax base in a designated area for a set period of time, usually 20 years or more, and divert it into a special fund for projects designed to spur redevelopment and eradicate blight.
During the campaign, Johnson pledged not to cut one penny from the Chicago Police Department, which had a budget of $1.94 billion in 2023. ACRE’s proposal urges Johnson to eliminate 1,000 vacant positions in the police department, and save approximately $150 million annually.
Johnson has vowed to redirect $150 million within the police department’s budget. That includes an additional $50 million to fund reform efforts and comply with the consent decree, according to Johnson’s campaign.
The city could save billions more by creating a public bank and changing the way it invests pension funds, according to ACRE’s plans.
In addition, ACRE backed Johnson’s call to end the city’s contract with SoundThinking, the firm formerly known as ShotSpotter, and save $9 million. The city’s inspector general found that the company’s gunshot detection system rarely leads to evidence of a crime.