Politics
Chicago Alderpeople React to Johnson’s Budget Proposal as Hearings Begin
Budget negotiations between members of the Chicago City Council have accelerated following Mayor Brandon Johnson’s initial proposal, which he unveiled last week.
Johnson’s proposal would generate $617 million in new revenue through, among other things, taxes on Chicago companies with more than 100 employees, taxes on large social media firms and by reclaiming a $500 million property tax surplus, which has been earmarked for Chicago Public Schools.
Critics warn the new taxes could stifle business growth in Chicago, discouraging existing companies from expanding and deterring new ones from moving to the city. Chicago’s alderpeople are expected to weigh the impact of corporate taxes on economic growth as budget talks move forward.
Here’s a snapshot of where three of Chicago’s aldermen stand: Ald. William Hall (6th Ward), Ald. Jason Ervin (28th Ward) and Ald. Bill Conway (34th Ward).
Reaction to the Overall Budget
“I think it’s a Trump-proof budget, No. 2. People are still keeping their jobs with no cuts in this budget,” Hall said. “We invested in jobs for young people — yearlong jobs for young people. Also, what we see is no property taxes, no knickknack fees, so we looked out for the breadwinners in the city of Chicago — the middle class, those who go to work every day and want to come back home to the homes they work so hard to keep.”
Ervin, chair of the City Council’s Budget Committee, acknowledged the proposal isn’t perfect but praised it for not cutting any city services.
“Many of the things he (Johnson) puts on the table have been designed not to hurt everyday Chicagoans in their pocketbooks,” Ervin said. “The budget is not something that I’m sure everybody is happy with, but at the end of the day, no one wants to decrease services. We talked to residents about that — they don’t want to see decreased services.”
Conway expressed skepticism about Johnson’s proposed revenue sources, including directing more TIF money toward Chicago Public Schools.
“At a time we’re already very much worried about affordability in this city, I’m concerned about all the taxes and fees we’re adding on Chicagoans here,” Conway said. “We really need to grow the size of the city, and what that’s going to require is affordable housing as well as jobs. This budget really hurts both those things by taking a massive TIF surplus, which often is used in affordable housing, as well as the jobs tax, which I worry certainly won’t create jobs and will add a tax on people who are trying to do that.”
A $21 “Head Tax” on Large Business
Johnson has proposed reinstating a tax on companies with more than 100 employees, requiring them to pay $21 per worker per month.
The proposed “head tax” has drawn support from progressive aldermen who have long urged large businesses to pay their “fair share,” and criticism from the business community.
“(The head tax) only looks at 3% of the city’s companies — 97% of companies are not impacted by this change,” Ervin said. “And again, it’s designed toward the things that people have talked about, which have been focused on public safety. All these things we’re looking to fund with this particular set of dollars are around public safety — that includes summer jobs for youth, violence prevention programming and mental health components.”
Conway questioned the math behind the head tax, which Johnson says would generate about $100 million.
“That math is just not accurate. Twenty-one dollars a month would be $252 a year — 21 times 12. He said it’s going to raise $100 million. One hundred million divided by $252 a year is about 400,000,” Conway said. “There are about 1.2 million private-sector workers in the city of Chicago, so I don’t really see how that math maths. To raise that kind of money, you would have to affect a third of the private-sector workforce in the city.”
The State of Property Taxes
Notably absent from the proposal are property tax increases — historically one of Chicago’s most reliable revenue sources and a measure recommended by Johnson’s budget task force.
In a statement, the Civic Federation, a nonpartisan government research group, criticized Johnson’s budget, arguing it “does not meaningfully engage or incorporate the recommendations of the Chicago Financial Future Task Force.”
If the city avoids raising property taxes this year, it would mark the second consecutive year without an increase.
“We hope that we can have a three-peat next year,” Hall said. “Not raising property taxes and fees is essential to everyday Chicagoans. Again, in my ward, 42,000 people — the average income is less than $40,000 a year — so we must make sure that people stay in their homes. That’s how you have a Trump-proof economy: you have people working, people maintaining their homes and paying their fair share of property taxes without increasing them.”
Ervin acknowledged that the city of Chicago portion of resident’s property taxes are unlikely to rise this year but cautioned that history shows they should not be seen as permanent.
“I think that for this current year, I believe that they’re off the table, but I do caution us — we lived this same time in the Daley years, when we did not look at our property taxes, which were the most stable form of revenue,” Ervin said. “There are the same times we went and sold assets, and if we would’ve had incremental increases along with inflation during that same time, the taxes would be at the same level they are today, and we’d still own our parking meters and we’d still own the Chicago Skyway.”
The City Council has until the end of December to pass a budget.
