Mayor Brandon Johnson’s corporate head tax is not dead — even after being voted down by the City Council’s Finance Committee — because his veto threat creates a threshold that cannot be overcome, a powerful mayoral ally said Wednesday.
Budget Committee Chair Jason Ervin (28th) pointed to Johnson’s central argument in defense of his proposed $21 a month per-employee head tax on companies with 100 or more employees: The only alternatives to a head tax are a property tax increase, higher garbage collection fees, a local version of the 1% grocery tax eliminated by the state, or police and fire department cutbacks.
Johnson has promised to veto a budget with any one of those elements, knowing that 34 votes are needed to override a mayoral veto. During a luncheon Wednesday hosted by the City Club of Chicago, Ervin was asked whether the head tax was dead.
“I would say no because the mayor has indicated that he would veto anything that… also included a property tax increase or a garbage fee increase,” Ervin said. “That brings the threshold required to pass something to a hyper level of 34 votes. And I can tell you there are at least 17 people who will stand against some of the items that are being brought to the table.”
Joining Ervin on the City Club’s budget panel were Ald. Jessie Fuentes (26th), a mayoral ally, and two of the City Council’s more conservative members: Ald. Matt O’Shea (19th) and Samantha Nugent (39th). Ald. Brian Hopkins (2nd) introduced his colleagues.
When Nugent was asked whether the head tax was dead, she said, “I hope so… We don’t want to see a budget passed that’s going to kill jobs.”
Even with an emboldened City Council that includes “different folks with different ideologies,” Nugent agreed with Ervin that a budget compromise will be reached long before the Dec. 31 deadline.
But she said, “I won’t be comfortable supporting a budget until we look internally and make more cuts… We have to look at ourselves as a city before we come out to you Chicagoans and taxpayers, and say we want more fees and fines and we want to pass measures that are going to encourage businesses to go elsewhere.”
O’Shea agreed that even if the head tax remains on life support, it needs to be dead and buried because it’s a “job killer that stunts growth.”
“We need to look more internally… and try to identify where there can be waste… It’s a billion-dollar-plus hole. It’s an almost $17 billion budget. Does anybody think 30 departments… can’t identify more duplicity in departments, more efficiencies in departments and, dare I say it, more cuts on some level?” O’Shea said.
When Ervin asked, “What do you want to cut?” O’Shea was verbally armed and ready.
“I’m going to say something uncomfortable. Labor needs to be at the table,” he said.
Chicago Federation of Labor President Bob Reiter did not return phone calls. But, he fired back on X with a posting that said, “Labor has been at the table in addition to being on the table.” Reiter added, “Maybe we can start with Alderman O’Shea returning my phone call and text messages.”
Johnson has ruled out layoffs and furlough days for fear of alienating the unions that helped put him in office. There is no evidence that the mayor has pursued increased employee contributions or reduced health care benefits, as recommended in the $3.2 million cost-cutting and revenue-generating road map provided by EY, formerly known as Ernst & Young.
Fuentes agreed that “shared sacrifice” is needed to solve the city’s budget crisis.
But she pointed to the “shared sacrifice” that Black and Hispanic neighborhoods have already endured when 50 schools and half of the city’s mental health clinics were closed, and hundreds of city employees were laid off.