Mayor Brandon Johnson’s New Budget Proposal
Mayor Brandon Johnson plans to propose hitting large corporations with an employee head tax, exempting less affluent areas of Chicago. He will present this in his budget proposal on Wednesday. Johnson also suggests borrowing $480 million to handle police-related lawsuit settlements and increasing lease transaction taxes on personal properties from 15% to 20%. This move would impact large businesses and could raise $234 million. Johnson aims to avoid directly taxing residents and instead places the financial burden on large corporations to balance Chicago’s budget.
Johnson’s strategy echoes his prior calls for taxing the wealthy, as he seeks to avoid property tax hikes and layoffs. He underscores the need for billionaires and millionaires to contribute more. His proposal includes no major layoffs or property tax increases, as confirmed by four aldermen briefed on the plan. Further details are expected on Wednesday, although Johnson’s administration did not comment when approached Tuesday morning.
The proposed head tax involves a $25 charge per month for each employee at companies with over 125 full-time staff. This time, businesses in socioeconomically disadvantaged areas, including large sections of Chicago’s South, Southwest, and West sides, would get a tax rebate. This incentive encourages businesses to invest in these neighborhoods. Estimated revenue from this tax is $102 million, affecting roughly 3% of Chicago businesses. Johnson wants large companies to help bridge the budget deficit, echoing his consistent messaging of taxing the wealthy.
Johnson’s past proposal, branded a marquee item, faced rejection from aldermen, leading to a significant political setback. He has persisted in his rhetoric, arguing big corporations should pay their share. Allegedly, federal tax cuts under President Trump have left corporations with sufficient funds to bear more tax responsibilities. Johnson’s latest proposal, the “Fair Share budget,” recalls former Mayor Harold Washington’s 1986 plan, despite mixed reactions to the comparison.
Chicago anticipates an $882.4 million shortfall in the 2027 budget, attributed mainly to pension liabilities and many settlements. Johnson aims to formulate budget solutions to avoid further credit downgrades. These downgrades, primarily due to budgeting decisions, can make borrowing more expensive for the city. Johnson plans to uphold Mayor Lori Lightfoot’s policy of advance pension payment, emphasizing the need for this commitment to stabilize city finances.
In the forthcoming weeks, Johnson’s team must secure at least 25 votes from the City Council to proceed, with Johnson ready to cast a tiebreaker if necessary.