Chicago's $17.6 Billion Budget Fight Turns on a Revived Head Tax, With Hearings Resuming After Election Day
Mayor Brandon Johnson's plan to close an $882 million shortfall charges large employers $25 per worker per month — a tax 29 aldermen have already pledged to kill. The Council must pass a budget by Dec. 31.
Chicago's budget season is heading for the same wall it hit last year. Mayor Brandon Johnson's proposed $17.6 billion spending plan for fiscal 2027 would close an $882 million shortfall in part by bringing back a corporate head tax — branded the Equitable Employer Tax — charging companies with 125 or more employees $25 per worker per month, according to reporting on the first City Council budget hearing read by this desk.
The administration estimates the tax at about $101 million a year, with full rebates for employers in designated disadvantaged census tracts. But a 29-member bloc of aldermen — a majority of the 50-member Council, and the same bloc that passed its own budget over the mayor's objections last year — has pledged to oppose any head tax, calling it dead on arrival before the mayor even delivered his address. At the first hearing, Ald. Brendan Reilly (42nd) pressed the budget team on why the plan is built on a tax the majority has already rejected.
The head tax is not the plan's only new revenue. The proposal also raises the Personal Property Lease Transaction Tax from 15 percent to 20 percent (projected at about $234 million), nearly doubles the sports-betting tax to 20 percent, adds a 15-cent packaging waste tax, and asks the Council for $480 million in borrowing authority to cover large police-misconduct settlements. On the spending side, FOX 32 Chicago reported $131.5 million in new spending, $120 million in identified savings, and $500 million in tax increment financing funds, with $285 million of that directed to Chicago Public Schools.
Budget hearings ran through Thursday of last week and resume after Election Day, with a hard deadline: the City Council must adopt a budget by Dec. 31. If the head tax falls and is not replaced, the plan reopens by roughly the amount the tax was meant to raise — which is why this fight, more than any single line item, will decide what Chicago's 2027 budget finally looks like.
