Johnson Revives Corporate Head Tax in 2027 Budget Amid Council Opposition

Key points

• Mayor Johnson proposes a $25 monthly head tax on companies with 125 or more employees, estimated to raise $102 million.
• The plan includes a rebate for businesses in socioeconomically disadvantaged areas to incentivize investment in underserved neighborhoods.
• Johnson proposes raising the personal property lease tax from 15% to 20%, targeting cloud computing and large tech firms.
• The budget includes a $480 million loan to cover police misconduct settlements, including $261 million for cases tied to former officer Reynaldo Guevara.
• A coalition of 29 aldermen has already opposed the head tax, calling it a threat to job growth and business retention.

Background

This proposal follows Johnson’s 2026 budget defeat, where the City Council passed its own spending plan after rejecting his head tax. Johnson’s reelection bid has faced challenges, including a 53% disapproval rating and criticism over campaign rhetoric. The current budget gap has narrowed from an initial $882.4 million estimate to $652.5 million, though pension and settlement costs remain significant pressures.

How outlets are covering it

The Chicago Tribune and CBS News emphasize the political risk of reviving a previously rejected tax, noting that 29 aldermen have formally opposed the measure. NBC Chicago highlights the broader tax package, including sports betting and packaging fees, as part of a strategy to avoid burdening residents. The Chicago Sun-Times frames the move as a renewed fight for Johnson’s signature policy, despite low approval ratings. All sources agree that the proposal faces significant legislative hurdles, with the Council likely to scrutinize the borrowing for police settlements and the impact on local businesses.

Why it matters

The outcome of this budget battle will determine Chicago’s fiscal stability and borrowing costs, especially after recent credit rating downgrades. It also sets the stage for the 2027 mayoral election, where Johnson’s progressive tax agenda may influence voter sentiment. The proposal’s success or failure will impact neighborhood services, school funding, and the city’s ability to manage long-term liabilities.

What to watch

Johnson is expected to detail the proposal on Wednesday, with the City Council likely to debate the head tax and borrowing measures in the coming weeks. The mayor must secure 26 votes to pass the budget, a challenge given the current opposition from the Budget Accountability Coalition. The outcome will influence the city’s credit rating and future borrowing costs.