The 29-member City Council coalition that rejected Mayor Brandon Johnson’s corporate head tax on Monday laid the ground rules for the pre-election budget debate with three boundary lines: no property tax, no “head tax or tax on job growth” and no counting on money from Springfield not yet approved.
With an $882.4 million shortfall looming less than five months before the mayoral election, Johnson has drawn his own line in the sand. He is staking his uphill battle for re-election on a promise to “tax the rich.”
The mayor has also pointedly refused to rule out a pre-election property tax hike — even after his proposed $300 million property tax increase was unanimously rejected by the City Council nearly two years ago.
Against that backdrop, the parameters established by the opposition coalition of alderpersons that Johnson likes to call the “Corporate Caucus” appear to put the mayor and Council on a collision course that could make last year’s budget stalemate look tame by comparison.
The group that calls itself the Budget Accountability Coalition said in a letter to Johnson Monday that its 29 members “recognize spending cuts alone may not responsibly erase the entire deficit.”
But the coalition is prepared to consider what it calls “locally-controlled revenue options” only after “meaningful recurring savings are on the table.”
The group argued that any effort to generate new revenue must begin with “money already owed to the city: collecting it, recovering our costs and modernizing existing revenue where it makes sense.”
“Reduce the cost of government. Protect essential services. Collecting what is already owed. Determine the truly remaining structural deficit. Then and only then decide what new revenue, if any, is truly necessary,” the letter states.
“Our position is plain: No property tax increase. No head tax or tax on job growth. No counting on Springfield money that has not been approved. Within those bounds, we stand ready to work with you.”
Last year, an emboldened City Council seized control over the budget process long control by the mayor in a way not seen since the 1980s power struggled known as “Council Wars” that saw 29-mostly white alderpersons thwart then-Mayor Harold Washington’s every move.
The same 29-member coalition that wrote Monday’s letter rejected Johnson’s corporate head tax and approved an alternative revenue package with several major elements that Johnson vehemently opposed and has either been unwilling or unable to implement.
The Council lifted the Chicago ban on video gambling terminals, but the Johnson administration has yet to license a single video gambling terminal even though the Illinois Gaming Board has licensed 65 Chicago applicants. And a plan to sell nearly $1 billion in outstanding city debt collapsed after a lack of interest from banks.
That left the city with an $85.1 million mid-year shortfall. Determined to avoid employee layoffs, Johnson refinanced up to $525 million in outstanding city debt and said he would use pandemic relief funds as a back-up.
Those are the kinds of short-term fixes that the opposition coalition is ruling out in the upcoming debate.
“One-time money must not paper over a permanent problem. Borrowing, refinancing, reserves and asset sales have no business underwriting operations,” the letter states. “A one-time expense does not justify a permanent tax. A program launched on temporary federal dollars should not quietly become a standing obligation of Chicago taxpayers.”
The mayor’s office had no immediate comment on the letter.
Last week, the Johnson administration responded to a financial report issued by an influential business group by claiming that the “real path forward for Chicago’s long-term financial future is through sustainable progressive revenue.”
Northwest Side Ald. Samantha Nugent (39th) argued that the $882.4 million shortfall in next year’s budget would have been “much smaller” if Johnson had fully implemented the 2026 budget, instead of “sabotaging” the alternative spending plan.
“With this letter, we’re providing clarity. A budget that raises taxes before seeking cuts and efficiencies, or that relies on Springfield revenue that doesn’t exist, is a non-starter,” Nugent told the Sun-Times.
“We’re also being really clear on what we won’t support from last year’s proposals. Namely, a tax on jobs that penalizes businesses for hiring or cutting our advance pension payment or leaving uncollected debt on the table when collecting it would reduce the need for revenue elsewhere.”
Nugent was asked what good a letter providing “clarity” will do when Johnson has already drawn his own line in the sand by renewing his tax-the-rich mantra.
“The City Council is a co-equal branch of government. It’s up to us to pass the budget. And the lesson from the past year is, we can’t start with tax increases,” Nugent said. “We need to begin by finding efficiencies and collecting more of the debt.”