Mayor Brandon Johnson, a first-term progressive running for another four-year term next year, unveiled a $17.6 billion budget aimed at closing an $882.4 million gap in Chicago's main operating fund while continuing to raise pension contributions and trying to keep other costs in check. The plan also targets spending on violence reduction, mental health care, and youth programs focused on the city's poorest residents.
City Hall estimates the revenue package will generate about $664.2 million and brings back a tax assessed on each employee, a step likely to face resistance from business groups and many city council members. The proposal adds a 15 cent fee on packages that the administration classifies as a waste tax, which it does not expect to require approval from the state legislature. It also seeks a higher levy on cloud computing, a line item that has been beating budget forecasts.
Johnson is asking the city council to authorize $480 million in new debt to handle what his team describes as exceptional costs from the legacy of police misconduct.
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The path through the council is not guaranteed. Last year, a group of aldermen advanced an alternate budget that stripped out Johnson's worker-based tax. The council passed that version, and the mayor chose neither to sign it nor to veto it. This year's debate lands as council members grow louder about taking on more debt and the chance of further credit rating cuts.
The plan stresses long-lived obligations that predate Johnson, from rising pension bills to police-misconduct payouts. In 2027, he plans to make the full $363 million supplemental pension payment on top of over $2 billion in yearly mandatory payments into the city's underfunded pension systems. Watch how the head tax and the proposed bond sale fare in council, because the outcome shapes Chicago's borrowing costs and the broader tone of local muni markets that can ripple into your fixed income sleeve.
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