CHICAGO—Will Chicago’s $1.2 billion budget deficit be filled by reinstating corporate taxes, or will it be resolved by inflicting catastrophic cuts to schools and raising property taxes on the city’s working class?
The city’s 50-member City Council has only two weeks to answer this question and pass a budget for 2026 to prevent a looming city shutdown on Dec. 31.
The Chicago Teachers Union has issued an urgent appeal to Chicagoans to call on their alderpersons to support Mayor Brandon Johnson’s 2026 budget proposal. The mayor’s budget includes a corporate head tax to provide funds for public programs, while another provision redirects funds from a big business slush fund to schools and city services.
The city’s head tax was abolished in 2014 under pro-business Mayor Rahm Emanuel, who also closed 50 public schools while in office.
Not surprisingly, a corporate caucus in the City Council is condemning the mayor’s budget. Corporate interests typically attack any program requiring them to pay taxes as a “job killer.” Johnson’s proposal is no exception. A substitute “alternative” budget they’re attempting to push through council does not include Johnson’s proposed tax.
Recently, the Chicago Tribune reported that corporations are pouring money into a campaign to undermine progressive city council members’ support for the head tax and win over centrist lawmakers.
“Seventy-one percent of Chicagoans support taxing large corporations instead of raising fees on working families, and 74 percent say they’re less likely to vote for an alder who raises fees on residents instead of taxing corporations,” the CTU said.
Nevertheless, a majority of alders have now come out in opposition to the corporate head tax and signaled their demand for regressive revenue measures like doubling garbage collection fees and increasing taxes on liquor and groceries.
Because the funds that would be raised by the head tax would go directly to programs that reduce violence, Johnson is calling the tax a “Public Safety Surcharge.” The monthly $33-per-employee tax would be paid by corporations with 500 or more employees, affecting Chicago’s 175 largest employers, including JPMorgan, Accenture, Walmart, and Bank of America.
Another provision of Johnson’s budget proposal seeks to protect schools, libraries, and parks by returning $1 billion in property taxes that have been diverted from public services into a “Tax Increment Financing” slush fund.
Such TIFs mostly gives tax breaks to wealthy developers in Chicago’s downtown and business district. Without this TIF “sweep,” the schools’ budget will be short hundreds of millions of dollars in the second half of the year. Further, funds to public services, schools, libraries, and the park district would face massive cuts and potentially need to lay off 20% of their staff.
The groups opposing the head tax aren’t motivated by public interest, but by “the bottom line, how they can get richer,” Johnson argued last week.
Across the nation, corporations, including those who would be subject to the head tax, are complaining they can’t afford a new charge, but they’ve all benefitted from historic levels of tax breaks under Trump.
“How dare we protect CEOs who are living in mansions and having expensive meals when you have seniors standing in lines, begging for groceries,” progressive caucus Ald. William Hall, 6th, told a rally last week in support of the mayor’s proposals.
With the clock ticking on a potential city government shutdown, the countdown to New Year’s Eve has a different meaning this December.
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