Chicago Mayor Brandon Johnson to give head tax another shot in 2027 budget proposal

Chicago Mayor Brandon Johnson will unveil his new budget proposal for the city on Wednesday.

The mayor wants to take another crack at his controversial corporate head tax to help offset an $880 million shortfall. He is looking to charge companies with 125 or more full-time employees $25 per worker per month.

While this tax is often called a head tax, Mayor Johnson prefers to think of it as the "equitable employer tax."

Mayor Johnson's office estimates the head tax would raise $101 million a year. He said it would affect less than 3% of Chicago's employees.

Johnson proposed a $21-per-month head tax as part of his 2026 budget proposal last year. The City Council voted it down, and the City Council Budget Accountability Coalition, which opposed the head tax, passed an alternate budget plan.

There is no indication that the parliamentary arithmetic in the City Council has shifted in favor of a head tax now. Some Chicago aldermen warned weeks ago that a head tax would be dead on arrival.

Last month, the 29 alders who are part of the City Council Budget Accountability Coalition sent a joint letter to the mayor declaring their willingness to work together on a budget plan. However, the group specifically requested no head tax, and said they would not support any move that increases costs for companies that keep or create jobs in Chicago.

The alders wrote to the mayor that while the current budget gap forecast is lower than previously estimated, "it remains a fiscal challenge of the first order," one which they believe three principles should anchor. One of those principles is rejecting a head tax or any other "tax on job growth."

The other two principles the alders are endorsing are rejecting an increase in property taxes and avoiding relying on "Springfield revenues that have not been approved."

Meanwhile, Mayor Johnson also will be proposing a 15-cent packaging waste tax that will be similar to the existing bag tax. He also wants sports betting companies to pay a 20% tax, up from 10.25%.

The mayor's team also suggests taking out a loan of $480 million to help pay off police misconduct claims sooner, which the team says would cut down on legal costs.

The City Council has to pass a budget by the end of the year.  

Mayor Johnson will deliver his budget address at 10 a.m. Wednesday.