Mayor Brandon Johnson built his preelection budget around a revival of his failed corporate head tax, defying a warning from the City Council majority that rewrote his budget last year.
On Tuesday, 28 members of that same coalition drew an even wider line in the sand.
They informed Johnson his proposed $17.6 billion budget does not have the votes to pass the Council for reasons that go far beyond the head tax, and it’s up to him to rewrite his spending plan — they’re not going to do the work for him.
In a letter to the mayor delivered on the final day of Council budget hearings, anti-administration alderpersons delivered a bill of particulars with six major items.
It starts with a $25-a-month, per-employee tax on businesses with more than 125 employees.
“You were told that a tax on jobs, which hinders our city’s ability to grow, would not get our votes. Yet, you put it in your budget anyway,” the letter states. “Taxing jobs prevents growth and moves the city in the wrong direction. … Employers deciding where to expand can choose the suburbs or another state, and every job that goes elsewhere takes with it the paychecks, spending and property taxes that makes up the city’s tax base.”
An even bigger-ticket item declared a nonstarter is Johnson’s third, and biggest, increase in a Chicago tax on equipment rentals and cloud computing — already the highest such tax in the nation.
“Moving the rate from 15% to 20% is a tax increase on every Chicago business and individual who leases equipment or pays for cloud software — from the neighborhood restaurant renting its dishwashing machine and point-of sale system to the family renting equipment from the hardware store to clean out a flooded basement,” the letter states.
Last year, the management ordinance tied to the city’s 2026 budget called for no increase in that “cloud tax” for two years.
“We will not break our word on the cap we imposed last year,” the letter states.
Acting Budget Director Jonathan Ernst has said the two-year freeze was stricken from the management ordinance because: “This is where the economy is moving toward, away from areas that we typically tax. We need to evolve with that.”
The letter also claims nearly half the gap in Johnson’s budget was closed with “one-time money and borrowing that will not be there next year.”
That includes the $75 million up-front payment from the New York investment firm that acquired Chicago parking meters; $37.7 million from the moribund Catalyst Fund; and $480 million in borrowing for settlements tied to police wrongdoing.
Johnson was further accused of leaving “billions of dollars owed to the city sitting on the books” and “adding tens of millions in new spending, while claiming $119.8 million in savings, but “itemizing none of it.”
“Aside from cutting police positions, your proposal appears to mostly shift recurring costs onto other city funds. That is cost shifting — not making government more efficient,” the letter states. “Growing spending in the middle of a $882 million budget gap is unfathomable, and every new dollar becomes a recurring cost with no plan to pay for it in future budgets.”
Johnson threw the political hot potato back into the laps of his Council opponents.
“No one has come up with a viable solution other than saying what they do not want. People have to come to the table saying what they do want. What are they willing to do?” he asked.
If City Council members “like the investments” he’s making in mental health, sanitation services, libraries and youth jobs,” they need to find a way to “fund them,” Johnson said.
He argued the blue wave that swept Democrats to victories across the nation was “not about cuts, consolidations, efficiencies and neo-liberal politics and austere budgets that have caused the fascist regime that we are experiencing now” from the Trump administration.
“The blue wave was about making sure that we are improving the quality of life for everyday people. We’re talking about basic human needs that people are calling for,” Johnson said Tuesday.
Last year, responding to Johnson’s proposed spending plan, a 31-member Council coalition seized control of the budget process, long controlled by Chicago mayors, in ways not seen since the 1980s power struggle known as “Council Wars.”
After rejecting Johnson’s corporate head tax, anti-administration Council members passed an alternative revenue package that the mayor opposed. This year, with three months to go before mayoral and aldermanic elections, the anti-administration group said it is not willing to do the heavy lifting again.
“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.”