A renegade coalition of conservative and moderate City Council members opposed to Mayor Brandon Johnson’s corporate head tax has decisively passed the second half of a final budget balanced without the policy detested by Chicago’s business community.
The Council voted 30-18 to pass the spending portion of an opposition budget that Johnson’s team has said will almost certainly require midyear cuts because of faulty revenue projections.
Now the question remains: will Johnson become the first Chicago mayor in three decades — since the city’s first Black mayor, Harold Washington — to veto an annual budget ordinance?
After Saturday’s vote, the mayor gave a speech from the Council dais to the deeply divided body. He didn’t specify his next steps but reiterated his argument against the budget.
“I do think that this proposal is ill-conceived. It sends the wrong message to struggling Chicagoans, and it will not produce the lofty revenue goals that are assumed in this budget.”
The rival spending plan solidified during a rare Saturday Council meeting nixed a $82 million head tax on large firms in favor of hiking the tax on off-premise alcohol; increasing the plastic bag fee; selling ad space on city lightpoles and bridge houses; legalizing video gambling at bars and restaurants; and selling Chicagoans unpaid ticket debt to private collectors.
“I remain seriously concerned about replacing the structural revenue from taxing corporations with a one time speculative revenue form attempting to sell off Chicagoans debts to debt collectors. I am concerned about that,” Johnson said.
Those revenue streams will also help the city make a full advanced pension payment, a policy lauded by credit rating agencies. Johnson shrunk the advanced pension payment in his initial budget proposal amid a $1.2 billion budget gap.
Johnson hasn’t said if he’ll veto the budget he has called “morally bankrupt” for targeting residents who struggle to pay their bills.
The city’s budget director and Chief Financial Officer have also said the Council’s rival proposal is short by $163 million and could require mid-year layoffs, furloughs, a hiring freeze or cuts.
On Friday, before Council approved the revenue portion of their plan, Johnson introduced a revised version of his own that still includes a corporate head tax on 500-plus-employee companies, but makes the full pension payment and legalizes video gambling at Midway Airport. Johnson’s new plan also keeps the Council’s proposed increased bag tax, and poses a new $0.15 tax on packaged delivery items.
He may try to somehow call that proposal for a vote, though it seems unlikely he could get a majority of members to rescue it from the Rules Committee where it was banished Friday.
Or, he could attempt to issue a line-item veto of the already-approved proposal — nixing some of revenue streams he particularly dislikes, such as the plan to sell Chicagoans’ debt to private collectors. Johnson’s team believes he has line-item veto power on appropriation ordinances only, according to one of his top advisers.
But Johnson is running against an end-of-year deadline to pass a budget. Meanwhile, opposing alders are eyeing how to hike their ranks to a 34-member veto-proof majority.
State law requires a five-day cooling off period on appropriation bills, meaning Johnson may not even be able to issue a veto until then.
Opposition alders have scheduled a Dec. 29 meeting in case they need to hold a veto-override vote.
The aldermanic coalition behind the alt-budget mostly refrained from Council-floor speeches Saturday, with some exceptions. Ald. Anthony Beale (9th) said he hadn’t voted for a budget in six years before Saturday, and warned this opposition coalition would endure during Johnson’s remaining year-and-a-half in his first term.
“This was a collective movement. Nobody was shut out,” he said. “I’ve never seen a movement quite like this… We’re going to continue to listen to everybody.”
Johnson’s progressive allies used their speeches to slam the revenue ideas in the opposition proposal.
“I do not believe that every corner bar, Bodega or family-run restaurant in my ward should become a mini casino,” said Ald. Jessie Fuentes (26th). “Addiction in my community is a battle we fight every day, including gambling.”
“Finally, this budget is not structurally balanced,” Fuentes continued. “We all know what that means, service reductions, layoffs and disruption that hits the most vulnerable residents.”
Progressive firebrand Ald. Byron Sigcho Lopez (25th) used his floor speech to continue a moral appeal for Johnson’s corporate head tax: “This is not the alternative budget. This is the billionaire budget.
“I’m a ‘no’ on this immoral, bankrupt, Michael Sacks budget,” he shouted to an applause from the Council gallery. Sigcho Lopez was referring to billionaire Chicagoan Sacks who buffered the campaign coffers of opposing alderpersons ahead of the budget vote, according to WGN.
Ald. Andre Vasquez (40th), who leans progressive but has positioned himself as an independent, threw shade at that characterization.
“We were still presented with a budget from an administration that appeared uninterested in negotiation and more focused on galvanizing people to choose a side, either you support their proposal or you’re standing with billionaires. The framing was more marketing than substance,” he said.
Still, Vasquez voted against the opposition budget, saying coalition alders did not have the resources, such as fiscal experts and analysts, to craft a balanced budget.
Ald. Desmon Yancy (5th) said he was insulted by the binary argument that opponents of Johnson’s corporate head tax are “Trump supporters,” as some mayoral allies have argued.
“[T]his false messaging, that I support billionaires over babies, is not only false, but it’s harmful to this movement,” Yancy said of progressive organizing. He took issue with Johnson’s original proposal that called to borrow money for expenses.
The coalition, led in part by Johnson’s own Finance Committee Chair Pat Dowell (3rd), took complete control of the budget process this year in a way not seen since the days of the 1980s Council Wars that saw 29 mostly white alderpersons thwart Mayor Harold Washington’s every move.
Back then, Washington vetoed Council-led appropriation ordinances four times — in 1983, 1984, 1985 and 1986, according to records from the City Clerk.
Regardless of where this year’s budget process lands, Johnson has warned that the fight for more revenue from high-earning corporations won’t stop.
He likened this budget season with the existential crisis of the Democratic Party nationally, marked by a split between far-left progressives targeting wealth inequality and ever-growing corporate profits, and moderates who believe further taxes on wealthy corporations will lead to job loss.
“I know that losing the battle does not mean that we have lost the war,” Johnson said to alders. “Though we may not have a majority of the Council, we do have the people.”