Chicago's Mayor Makes Budget Moves, But Will It Be Enough?

Chicago's Mayor Brandon Johnson is navigating a complex budget process, aiming to make his $16.6 billion budget work while facing significant pushback. The outcome remains uncertain as he seeks support from the City Council.

Key Changes and Proposals

Business Tax Adjustments

• Head Tax Reduction: Originally proposed at $21 per employee for businesses with 100+ employees, now adjusted to 200+ employees.
• Revenue Impact: Estimated $18 million less in revenue.
• Compensation Plan: Mayor plans to offset this loss by raising other taxes.

Tax Increases

• Cloud Computing & Software Tax: Rising from 14% to 15% (up from 9% last year).
• Projected Revenue: Approximately $416 million.
• Towing Fees:
• Small Vehicles: Increasing from $150 to $250.
• Large Vehicles: Increasing from $250 to $350.
• Annual Revenue: Expected to generate an extra $7 million.

Allocation of Additional Revenue

• Pension Fund: Mayor aims to contribute more than required.
• Contingency: Additional funds if cloud computing tax exceeds expectations.

Other Notable Changes

• Ride-Sharing Fee: Adjusted to reduce burden on working individuals.
• Non-Profit Exemption: Exempt from proposed boat mooring fee hike.
• Library & Violence Services: Reversing proposed cuts; full funding for gender-based violence services.

Opposition and Alternative Solutions

• African-American Alderpersons: Oppose the head tax due to potential impact on restaurants.
• Exemption Consideration: Mayor's team deemed it illegal.
• Alternative Revenue Ideas:
• Restoring automatic property tax increase tied to inflation.
• Doubling garbage collection fee (last increased in 2015).
• Concerns: Head tax might hinder hiring and living costs.