No budget deal in sight as Johnson’s finance team pokes holes in alders’ plan

It’s clear Chicago Mayor Brandon Johnson and the Chicago City Council are no closer to reaching a budget deal, as top financial officials in the mayor’s administration have largely rejected the alternative budget plan presented by council members.

The 2026 budget plan needs to be approved by the mayor and at least 26 of the 50 alders by the end of the year. In October, Johnson presented his plan, which included a $21 per employee corporate head tax on the city’s largest companies each month, plus a host of other taxes. A month later, the mayor’s revenue ideas were soundly rejected by the council’s Finance Committee.

Alders began crafting their own plan, and 26 of them signed a letter Tuesday presenting an alternative proposal. The alternate plan took out the corporate head tax, replacing it instead with items like an increased garbage fee, with an exemption for seniors, and an increased liquor tax at liquor stores.

The mayor’s financial team — Chief Financial Officer Jill Jaworski, Budget Director Annette Guzman and City Comptroller Michael Belsky — responded to the alders Thursday, thanking them for their plan but rebuking several of their proposals, saying, for example, that an improved debt collection plan, is “not supported by legal, financial, or operational realities.” The mayor’s administration said increasing the garbage collection fee from $9.50 to $18 per month would represent a 90 percent increase in a year, which would be a financial hardship for families.

“At a time when many communities are already experiencing substantial property tax increases through the recent property assessments conducted by the Cook County Assessor and the appeals approved by the Board of Review, imposing another major cost escalation would create an immediate and disproportionate burden on households least able to absorb it,” Jaworski, Guzman and Belsky wrote in a joint statement to the 26 alders.

The mayor’s team also made it clear the corporate head tax — which it calls a “Community Safety Surcharge” — will stay in the budget proposal, despite objections from more than half the council. Opponents of the head tax call it a “job killer.” The mayor’s team challenged that notion, saying the assertion that it would “disincentivize economic growth is not substantiated by data.”

“The assumption that corporate taxation directly affects employment growth lacks empirical support. By investing in proven community safety interventions, we are making Chicago better for businesses. A progressive revenue like the Community Safety Surcharge, one that asks those who have benefited the most from the city’s growth and prosperity to contribute their fair share, is not a threat to prosperity, but a prerequisite,” Jaworski, Guzman and Belsky wrote in a joint statement to the 26 alders.

Ald. Nicole Lee and Ald. Scott Waguespack responded to the mayor’s administration’s rebuke of their alternate proposal, disagreeing with their assessment.

“The mayor’s office has offered no new ideas – only criticisms of our work. This is not anyone’s idea of actual collaboration,” Lee said.

“It is time for Mayor Johnson to accept the reality that his budget is not going to pass as is,” Waguespack said. “We will take the necessary steps required to move this process forward on our own.”

The city paid the accounting firm Ernst and Young $3 million to outline efficiencies that could help Chicago close its billion-dollar gap in its $16 billion 2026 budget. Among the options in the report: consolidating city purchasing and fleet management, streamlining city departments and better managing health care costs.

Alders have urged Johnson to adopt more recommendations from the report, but his finance team responded in their memo Thursday, saying, “It is important to note that the City’s Financial and Strategic Reform Options report presents a set of options for consideration—not mandates.”

The mayor’s administration noted that it has made changes to its own initial proposal, including the full restoration of the Chicago Public Library’s circulation budget, additional money for the advanced pension payment, more funding for community programs and upping a program that helps low-income people with disabilities make their homes more accessible.