Chicago Mayor to Try Again With a Tax on Big Employers

Chicago Mayor Brandon Johnson is set to share his new budget plan for the city on Wednesday morning. One of his biggest ideas is a tax on large companies to help pay for a huge gap in the city's budget. The city is facing a shortfall of $880 million, which means it needs to find a lot of extra money to cover its costs.

Mayor Johnson wants to charge companies with 125 or more full-time workers $25 per employee each month. This kind of tax is often called a 'head tax,' but the mayor prefers to call it the 'equitable employer tax.' His office says the tax would bring in about $101 million a year and would affect less than 3% of Chicago's businesses.

This is not the first time Mayor Johnson has pushed this idea. Last year, he proposed a similar tax of $21 per worker per month as part of his 2026 budget plan. The City Council voted it down, and a group of council members came up with their own budget plan instead.

It does not look like things will go much differently this time around. Some Chicago aldermen, who are the elected members of the City Council, warned weeks ago that a head tax would be 'dead on arrival.' That phrase means they believe the idea has no chance of passing.

A group of 29 aldermen sent a letter to the mayor last month saying they were willing to work together on a budget. However, they made it very clear that they would not support a head tax. They said they would not back any plan that raises costs for companies that keep or create jobs in Chicago.

In their letter, the aldermen called the budget gap a 'fiscal challenge of the first order,' meaning they see it as a very serious problem. They laid out three rules they think should guide the budget plan. Those rules are: no head tax, no increase in property taxes, and no counting on money from the state of Illinois that has not been approved yet.

Mayor Johnson is also proposing some other new ways to raise money. He wants to add a 15-cent tax on packaging waste, similar to the existing bag tax people pay at stores. He also wants to raise the tax on sports betting companies from 10.25% to 20%.

On top of all that, the mayor's team is suggesting the city take out a loan of $480 million. The goal would be to pay off police misconduct claims faster, which they say would save money on legal costs in the long run. Mayor Johnson was scheduled to deliver his full budget address at 10 a.m. Wednesday.