Mayor Brandon Johnson plans to bring forth a new budget proposal targeting large corporations to alleviate Chicago’s budgetary concerns, sources suggest. This proposal includes reintroducing an employee head tax for major corporations, alongside a $480 million borrowing plan to settle police-related lawsuits. Additionally, the proposal increases personal property lease transaction taxes from 15% to 20%, projecting a revenue of $234 million. These moves focus on sparing Chicago residents from direct financial burden.
Unlike previous plans, the head tax targets businesses with over 125 employees, charging $25 monthly per employee. An exemption exists for companies in socioeconomically disadvantaged areas on the South, Southwest, and West sides. This could potentially generate $102 million, according to estimates.
Johnson prioritizes taxing wealthy entities in his latest budget proposal. Past attempts faced opposition and were ultimately defeated, with the City Council providing an alternative spending plan. However, Johnson’s focus remains on making affluent corporations contribute more, tying this to his reelection strategy.
Additional measures include hiking taxes related to sportsbook betting and smart street programs, alongside increasing liquor taxes and implementing a package tax. The focus remains on extracting funds from large businesses.
The city’s financial challenges include a projected $882.4 million deficit for the 2027 budget due to pension liabilities and settlements. The budget also considers a $364 million pension payment in line with former Mayor Lori Lightfoot’s policy, aiming to fortify retiree funds.
With increasing opposition and past budget decisions leading to credit rating downgrades, Johnson’s administration faces critical decisions. Achieving consensus on the budget will necessitate strategic negotiations within the City Council.
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