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Chicago Finance Panel Defeats Johnson’s Tax Package, Leaving 2026 Budget in Limbo

The rebuke forces negotiations over cuts or alternative revenue before the year-end budget deadline.

Overview

  • The City Council Finance Committee voted 25–10 against Mayor Brandon Johnson’s roughly $600 million revenue plan after efforts to delay the vote failed on 24–7 and 18–18 roll calls.
  • The centerpiece head tax—$21 per employee per month on firms with at least 100 workers after a brief 200-employee revision—was pitched to fund violence prevention and youth jobs but drew warnings it would deepen downtown vacancies and shift costs to homeowners.
  • Johnson said he will veto any budget that raises property taxes, garbage fees or grocery taxes, signaled willingness to negotiate details, and urged opponents to present concrete alternatives.
  • The package also sought to lift the cloud/software lease tax to 15%, create a social media amusement tax and raise boat mooring fees, while proposing about $1.8 billion in borrowing; industry advocates warned the social media levy could trigger costly legal challenges.
  • After the committee rejection, the full council met without resolving the impasse as allies pressed for a $1 billion TIF sweep to Chicago Public Schools and the city faces a Dec. 31 deadline to pass a balanced budget, with the next council meeting scheduled for Dec. 10.