Politics

Johnson, Majority of City Council Remain At Odds Over 2027 Budget As Hearings End

A majority of the Chicago City Council remains vehemently opposed to Mayor Brandon Johnson’s plan to bridge a portion of the city’s massive budget gap by taxing large firms, leaving Chicago once again on the brink of another budget impasse.

Twenty-eight members of the Chicago City Council sent a letter to Johnson Tuesday — the final day of hearings into each agency’s budget — that delivered a stark warning to the mayor that his $17.6 billion spending plan is dead in the water. All are facing reelection in approximately 100 days.

“We are writing to share with you plainly where the votes stand on your proposed (fiscal year) 2027 Budget proposal: the 26 that are needed to approve your proposal do not exist,” the self-declared Budget Accountability Coalition wrote. 

The coalition said it would not vote to approve a budget that included Johnson’s plan to impose a $25 per month per employee tax on all firms that have more than 125 employees. 

That is projected to generate approximately $100 million — after exempting firms whose employees work in areas of the city designated by the federal government to be “socioeconomically disadvantaged,” which includes much of the city’s South and West sides, according to Johnson’s proposal.

The coalition also rejected Johnson’s plan that proposes to hike personal property lease taxes from 15% to 20% to generate $234 million. That tax, which gets added to car and equipment rentals as well as cloud-based software, will ensure that “big tech” firms pay their fair share, Johnson said.

In addition, the coalition said they would not agree to spend $131.5 million more this year as proposed by Johnson, who wants to use those funds for another mental health clinic, to add 7,000 youth jobs and reduce the number of unhoused Chicagoans.

“This version of your budget is a non-starter,” the coalition wrote. “This budget would hold back growth just when Chicago needs it most. A growing population and a growing job base are what make our city more affordable. A budget needs 26 affirmative votes from this Council before the end of the year. We are telling you now, with 51 days left before the city is required to have an approved budget, so your team has ample time to write a budget that can earn the votes of this Council instead of spending the next several weeks defending one that cannot.”

Johnson responded to that letter immediately, telling all 50 members of the City Council that his office was “developing new models” for the proposed head tax and the increase in the personal property lease tax “to address questions by members.”

Johnson’s letter offered no specifics on what a new proposal could entail.

The mayor’s office will hold a series of briefings “regarding additional gap closing measures” as well as plans to use the $75 million the city got from the new owners of the parking meters to make an extra payment to the city’s woefully underfunded pension funds, as required by a 44-6 vote by the City Council earlier this month.

Johnson’s letter included a breakdown of the programs he wants to increase spending for, including another $7 million that would be used to expand the city’s violence prevention programs and add 390 outreach workers.

Speaking outside one of the two mental health clinics closed by former Mayor Rahm Emanuel, Johnson told reporters Tuesday that he was confident the people of Chicago wanted the city to spend more on programs designed to improve their quality of life.

“I think the larger, broader question is why are those alders refusing to respond to the will of the people?” Johnson said, adding that the results of the midterm elections that showed widespread support for Democratic candidates strengthened his hand in the budget debate.

Johnson challenged his critics to propose a solution to the city’s financial crisis.

“No one has come up with a viable solution other than saying what they do not want,” Johnson said. “People have to come to the table saying what they do want. What are they willing to do?”

Johnson’s critics have not offered an alternative way to fill the $409 million hole their response to the mayor’s budget would open in the city’s budget.

The only other tax that the City Council has the power to raise without the approval of state lawmakers that could generate hundreds of millions of dollars is the property tax, and no elected official wants to propose such a hike just a few months before facing voters.

The coalition’s letter to Johnson rules out a property tax increase.

The City Council must pass a budget for 2027 by the end of December. Officials cannot pass a short-term ordinance to keep City Hall functioning while negotiations continue, officials said. That means without a budget agreement, more than 30,000 workers will not be paid and city services will stop.

Contact Heather Cherone: @HeatherCherone | (773) 569-1863 | [email protected]

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