Politics
Mayor Brandon Johnson’s Spending Plan That Hikes Taxes by $234M Set for Final Vote
Video: The WTTW News Spotlight Politics team on the 2025 budget and more of the day’s top stories. (Produced by Andrea Guthmann)
Mayor Brandon Johnson’s third proposal to raise property taxes in order to avoid draconian cuts to city services and thousands of layoffs may prove to be the charm.
Two key Chicago City Council committees voted Tuesday to send Johnson’s $17.3 billion spending plan for 2025 to the full City Council for a final vote. The two-step process is set to start Wednesday, with a final vote scheduled for Friday.
The City Council’s Finance Committee voted 14-12 to advance Johnson’s plan to hike property taxes by $68.5 million and increase a host of other taxes and fees by an additional $165.5 million.
Hours later, the City Council’s Budget Committe voted 17-16 to advance the rest of the budget proposal, ensuring that the City Council will be able to vote on the package Friday to avoid an unprecedented shutdown of Chicago city government.
The vote by the Budget Committee came with high drama. As 28th Ward Ald. Jason Ervin, the panel’s chair, tallied the vote, it appeared to be deadlocked, with 16 votes in favor of sending the proposal to the full City Council and 16 votes against.
As the tension mounted, Ald. Lamont Robinson (4th Ward) walked into the chambers from the gallery and took his seat. He quietly cast the deciding vote in favor of the plan.
The incredibly narrow vote by the Finance Committee also came with fireworks, with Ald. Brendan Reilly (42nd Ward) calling the mayor’s proposal “garbage.”
“We’re spending far too much money,” Reilly said, pounding his desk. “This government is bloated. This budget process has been a sham.”
The vote by the Budget Commitee was delayed after Ald. Nicole Lee (11th Ward) discovered that the budget for the City Council’s Housing Committee, led by Ald. Byron Sigcho Lopez (25th Ward), had been increased by $50,000 and the budget for the Police and Fire Committee, led by Ald. Chris Taliaferro (29th Ward), had jumped by $30,000 without explanation.
A common way of ensuring that wavering alderpeople vote for a controversial budget is to increase committee budgets, which can be spent by chairs with little oversight.
Those changes were reversed after alderpeople objected.
Committee members also unanimously stripped out a provision of the budget ordinance that agreed to provide the City Council with a mid-year budget update in July — but only if the entire package was adopted by the City Council no later than Friday.
Crafted by Ald. Andre Vasquez (40th Ward), the measure was an effort to avoid the controversy that engulfed the city this year after officials in late August revealed the city was facing a massive budget shortfall.
After Ald. Raymond Lopez (15th Ward) objected to tying the report to the passage of the budget on Friday, the committee voted unanimously to require the midyear report, regardless of when the budget is adopted.
Ald. Maria Hadden (49th Ward), co-chair of the Progressive Caucus, called the provision that appeared designed to increase the pressure on the City Council to approve the budget on Friday “wholly unnecessary and not in good faith.”
The committee votes came after weeks of furious negotiations prompted by the City Council’s rejection of Johnson’s first two proposals. The City Council voted unanimously to reject his initial proposal to raise property taxes by $300 million and then quietly killed his second proposal to hike property taxes by $150 million.
Johnson’s proposal to increase property taxes by $68.5 million is tied to the increase in the cost of living during the past two years. During his 2023 campaign for mayor, Johnson promised not to raise property taxes, blaming the steep increases approved by his predecessors for making it impossible for longtime Chicagoans to stay in their homes.
The owners of a property worth $250,000 will likely pay approximately $50 more a year if Johnson’s proposed tax hike is approved by at least 26 members of the Chicago City Council, according to a WTTW News analysis.
The largest tax hike included in Johnson’s revised budget proposal would generate $128.1 million by an increase in the tax levied on software licenses, cloud services and other digital goods from 9% to 11%, records show.
Other proposed tax increases would generate:
- $12.9 million by hiking the taxes paid by those who subscribe to streaming and cable television services from 9% to 10.25%.
- $11.3 million by hiking the tax paid by those who park in garages or use a valet service from 20% on weekends and 22% on weekdays and to 23.25% throughout the week.
- $8.1 million by charging a $3 surcharge on ride-hailing trips that start or end in the Central Business District between 6 a.m. and 10 p.m. on Saturday and Sunday. The current weekday surcharge would drop to $2.75 from $3.
- $5.1 million by charging shoppers 10 cents for each single-use paper and plastic bag at stores and allowing retailers to keep 1 cent to cover costs. The current tax is 7 cents, with store owners keeping 2 cents.
Johnson’s revised plan also relies on an additional $22 million in revenue, including $7 million in additional fines, most related to parking citations, records show.
Johnson’s plan also cuts $90 million in spending, including $31 million in federal COVID-19 relief funds he had planned to use to restart the effort that sent $500 per month to Chicagoans living below the federal poverty line as part of a basic income program, records show.
An additional $29 million in federal COVID-19 relief funds that had been set to be used to help small businesses would also be cut under Johnson’s proposal.
Johnson has said he will not sign a budget that cuts city services or puts city employees out of work, and the revised proposal holds that line. The mayor’s new plan cuts $13.1 million he had proposed using to pay down the city’s debt and reduces the budget for the Department of Fleet and Facility Management by $3.1 million.
The new plan also closes a $40 million gap created in recent weeks when state lawmakers failed to fix an issue with the taxes levied on prepaid cellphones, officials said.
The revised budget proposal earmarks $8.9 million to reverse deep cuts to the number of employees charged with implementing the federal court order requiring the Chicago Police Department to stop routinely violating residents’ constitutional rights known as the consent decree, bowing to intense pressure from advocates for police reform.
Those estimates assume that the employees who fill 162 positions set to be restored to the city’s 2025 spending plan will be paid significantly less than the average cost of a Chicago Police Department officer, who earns $150,000 annually, including benefits.
That cost of restoring the positions will be covered by an expansion of the city’s automated speed camera network into wards where City Council members have requested the cameras and a study by the Chicago Department of Transportation has found a need for speed reductions, Guzman said.
In all, the new cameras will generate $11.4 million, and cost $2.64 million to install, according to city projections.
CPD has fully met just 9% of the consent decree’s requirements in the more than five years since it took effect, according to the most recent report by the monitoring team.
If approved, city officials will earmark an additional $208.8 million for the reform effort in 2025, documents show. Between 2020 and 2024, the city set aside $667 million to implement the consent decree, but failed to spend at least a quarter of those funds every year, according to a WTTW News analysis.
The new budget proposal makes no change to Johnson’s plan to pay an additional $272 million into the city’s four underfunded pension funds. That will prevent the further growth of the city’s pension liabilities and save the city $3.9 billion by 2030, officials said.
If the city cancels the additional pension payment, Wall Street ratings agencies could lower Chicago’s credit rating, making it more expensive for the city to borrow money, making Chicago’s financial hole deeper.
S&P Global Ratings put the city on a negative credit watch before Thanksgiving, finding there is at least a one-in-two chance of a downgrade in the next 90 days.
Contact Heather Cherone: @HeatherCherone | (773) 569-1863 | [email protected]
