Mayor Brandon Johnson’s already strained relationship with the City Council sunk to a new low on Monday when the Finance Committee rejected his nearly $600 million plan to, as he put it, “challenge the ultra-rich and corporations to pay their fair share.”
The vote was 25-10. The defeat came only after a motion to postpone the vote failed by an 18-18 tie vote.
“Can we just get this over with? This is a joke. They’re calling people out there right now to delay this,” said Ald. Matt O’Shea (19th).
For Johnson, it was a repeat of last year’s 50-0 City Council vote rejecting his proposed $300 million property tax increase.
“The City Council will [now] drive the budget conversation —similar to last year,” said Ald. Marty Quinn (13th), who represents the Southwest Side and is one of the mayor’s most outspoken critics.
Ald. Ray Lopez (15th), another one of the mayor’s most ardent critics, said Monday’s developments are “extremely embarrassing” to Johnson, adding, “Once again, he has lost control over the budget process.”
Johnson responded with trademark defiance to the latest declaration of independence from an already emboldened City Council.
“The corporate [head] tax is in this budget. It will stay in this budget. Is that clear enough?” he said.
The mayor argued that the only alternative to the head tax is a property tax increase, an increased garbage collection fee, a local version of the one percent grocery tax eliminated by the state and police and fire cuts — or a combination of them.
He said he would veto a budget with any one of those elements. Thirty-four votes would be needed to override a mayoral veto.
The die for Monday’s humiliating defeat was cast last week, when Finance Chair Pat Dowell (3rd), a member of Johnson’s handpicked leadership team, rejected the mayor’s offer to impose a $21 a month per-employee head tax on companies with 200 or more employees and declared her opposition to the corporate head tax “at any level.”
Dowell’s outright rejection of Johnson’s compromise in favor of a 15% increase in the tax on lease rental or use of computer software and cloud infrastructure forced the mayor back to the bargaining table to make even more concessions in addition to the changes he has already made.
On Monday, it was clear that those weekend negotiations had failed — so much so that Johnson returned to his original proposal to impose the corporate head tax on companies with 100 or more employees with an $18 million fund for small businesses that hired in underserved communities.
Early on, Dowell tried to recess the Finance Committee until Dec. 2. Her motion to recess was tabled by a vote of 24-7.
After a break, Budget Director Annette Guzman and Chief Financial Officer Jill Jaworski appeared before the Finance Committee to explain the revenue ordinance along with the mayor’s plan to borrow $1.8 billion.
The borrowing includes $1.3 billion for capital projects, $283 million for settlements and judgments tied to allegations of police wrongdoing and $166 million to defray the cost of retroactive pay raises for Chicago firefighters and paramedics. The controversial plan to borrow to pay for day-to-day operations will cost Chicago taxpayers $50 million in interest costs over the life of those bonds.
Monday’s defeat sends the budget negotiations back to square one.
Johnson can try to save face politically by portraying opponents as champions of the wealthy and opponents of working people. However, he’s also lost control of a budget process that Chicago mayors have long dictated.
Johnson had hoped to put his budget to bed by Thanksgiving to avoid a repeat of last year’s budget stalemate that ended in a 27-23 vote the week before Christmas — and only after the City Council unanimously rejected the mayor’s proposed $300 million property tax increase and refused to raise property taxes by any amount.
Instead, political indigestion could be on the mayor’s Thanksgiving menu.
He didn’t have the votes no matter how he tried to spin it.
And it’s not clear at this point how he plans to get to the finish line.
Other than scrapping the head tax altogether or making the legally shaky decision to exempt restaurants and bars, it’s not clear what changes Johnson can make to get to 26 votes, or 25 votes, if the mayor is willing to cast the tie-breaker.
“I don’t mean to sound cantankerous, but the question is what can these aldermen do? At some point, they have to meet me half way,” Johnson said, arguing that he has already done his job.
The mayor argued that those in the City Council who are clamoring for budget cuts over tax increases are “not being honest and sincere about where those cuts” would be coming from. It’s the corporate fund with the “vast majority” earmarked for community safety, he said.
“I don’t believe the people of Chicago want us laying off police officers at a time in which we’re collaborating with community violence intervention work, we’re investing in young people. Everyone says this is the No. 1 issue until they have to make a hard decision. Well, guess what? We were all elected to make hard decisions. That’s what we’re calling for in this moment,” he said.
It was just a year ago that Johnson proposed a $300 million property tax increase only to have the City Council unanimously reject the increase and refuse to raise property taxes by any amount. More recently, the mayor and his budget team have pushed for the City Council to restore the 1% grocery tax increase that would generate $80 million in annual revenue.
But the mayor emphatically denied that his own prior support for those increases undercuts his budget message now.
“It’s the right time to shift now. And that’s what happens in politics. We actually respond to what people say. Isn’t that what politicians should do?” Johnson said.
“I’ve never said that I’m perfect. God knows I’m not. What I’m trying to do is make right in imperfect situations. I’m not asking you to congratulate me. I’m just saying that we’ve made a shift because we have other options…The options are clear: We’re gonna protect working people and middle-class families in this city by investing in education, youth employment and community safety, or we’re going to place the burden on working people. And I’m saying we don’t have to do that because the ultra-rich and these large corporations—they can do more.”
South Side David Moore (17th) said he’s willing to go along with the head tax, only if a way can be found to mitigate the impact on “McDonald’s operators and any other small restaurants.”
“I would like to have further conversation to make sure that’s not happening. Hopefully, we can get there,” Moore said.
A clearly exasperated Budget Chair Jason Ervin (28th) resurrected his favorite budget cliché: “Everybody wants to go to heaven, but nobody wants to die.”