In a committee vote on Mayor Brandon Johnson’s FY 2026 $16.6 billion budget proposal, the Chicago City Council Finance Committee decided Monday not to advance the proposed revenue options for a full City Council vote. A point of contention is Johnson’s proposed corporate head tax, a monthly $21-per-employee fee on large businesses that would generate a “Community Safety Fund” for violence prevention, mental health services and youth programs.
The 35-member committee voted 10-25 against advancing the proposal. Ald. Pat Dowell (3rd Ward) is the Johnson-appointed chair of the committee with Ald. Bill Conway (34th Ward) as the vice chair.
Borrowing plans, among other items, were also included in the revenue options up for committee vote. Aldermanic Progressive Caucus member Ald. Andre Vasquez (40th Ward) has positioned himself against the proposal due to concerns about a borrowing plan to cover police misconduct spending, according to Block Club Chicago, but says he supports the corporate head tax.
Originally proposed for companies with 100 or more employees, Johnson’s administration amended the head tax proposal last week to include those with over 200 workers. He has since gone back to its original 100-employee proposal and is expected to generate $100 million in funding. Johnson’s head tax proposal heeds the call of the grassroots organizers who elected him to tax the city’s richest and wealthiest corporations.
At a post-meeting press conference on Monday, Johnson encouraged Chicagoans to call their alderperson to tell them they don’t want a property tax increase. Johnson said the corporate head tax is a solution to avoid a property tax increase.
“I actually think that these communities should call their alders,” Johnson said to reporters. “Call their alders and tell them that we don’t want our property taxes increased.”
A report released by the Cook County Treasurer’s Office showed that property taxes in Chicago increased 11.6% while taxes on business properties went up just 0.9%. According to the analysis, the burden on homeowners was in part due to a decrease in property values in the Loop, with homeowners on the South and West sides facing a larger increase than the rest of the city.
Residents have been on the receiving end of mass text campaigns from opposing political action groups, such as One Future Illinois, that frame the corporate head tax as a job killer, and proponents such as Chicagoans Against Trump Cuts, that frame the tax as making big corporations pay their fair share.
“What they’re saying is, at least so far, these individuals are more interested in protecting the corporations, the largest corporations in our city, than protecting working people,” Johnson said.
Some of the alders who stood behind Johnson during the press conference include Ald. William Hall (6th Ward), Ald. Byron Sigcho-Lopez (25th Ward), Ald. Leni Manaa-Hoppenworth (48th Ward), Chris Taliaferro (29th Ward), Ald. Jessie Fuentes (26th Ward), Ald. Jason Ervin (28th Ward), and Ald. Rossana Rodriguez Sanchez ( 33rdWard).
Some of the opposing alders held a separate press conference after the vote. Those in attendance included Ald. Gilbert Villegas (36th Ward), Ald. Brendan Reilly (42 Ward), Ald. Anthony Beale (9th Ward), and Ald. Monique Scott (24th Ward).
Johnson is urging City Council members to bring more suggestions to fill the $1.15 budget gap.
“The cost of living is going to increase because of the budget that the President of the United States has put forward. People are paying more for everything, and we, as a City Council and as city government, have an opportunity to provide that relief. That’s what this budget ultimately is doing,” Johnson told reporters after the committee vote.
Johnson said he would veto a budget that includes a property tax increase and called for a recess until the first week of December to allow alderpeople more time to come up with alternatives to the head tax.
He added that he would also veto a budget that includes a grocery tax and a garbage fee increase.
“I will veto any budget that includes a property tax increase,” Johnson said. “Working-class Chicagoans can simply just not afford a property tax increase.”
Parts of Johnson’s FY 2026 budget proposal are a call from community organizers with the People’s Unity Platform (PUP), who are pushing for more progressive forms of taxation. They rallied behind the proposal through their Babies Before Billionaires campaign over the summer.
Breanna Champion, an organizer with the Chicago Black Voter Project, called the finance committee’s vote “disheartening and dangerous.” She said the fact that majority-Black neighborhoods are seeing their property taxes go up shows that businesses should be taxed. She said alders should support the head tax, which is called the Community Safety Surcharge in Johnson’s budget.
“One of the major reasons why these businesses say they are leaving [Chicago] is not because of the corporate head tax, because we don’t even have the corporate head tax in effect,” Champion said. “The reason why they say they’re leaving is because the city isn’t safe for them to do business. And that’s exactly what the Community Safety Surcharge is trying to remedy.”
Alderpeople who oppose the tax point to its possible impact on small businesses — despite only employers with 100 or more employees — and the restaurant industry, stating that it could lead to layoffs.
Ald. Red Burnett has told The TRiiBE that he is open to conversations about how to make the head tax “make sense” for all industries. His 27th Ward expands from disinvested neighborhoods like Garfield Park to bustling enclaves like the West Loop.
Ald. Desmon Yancy initially called Johnson’s budget “progressive,” but has since retracted his support of the proposed head tax. His 5th Ward includes well-off areas near the University of Chicago and the surrounding Black neighborhood of South Shore, which has historically had the highest eviction rates in the city.
Ald. David Moore (17th Ward) has stated worries about the tax impacting McDonald’s franchisees, but does not reject the idea of the head tax altogether.
The Chicago Teachers Union released a statement after today’s vote. Although the statement addresses all alders on the committee who voted “no,” the union specifically called out Yancy and Conway for putting the interests of millionaires over “a supermajority of Chicagoans and 90% of Black and Latine Chicagoans” who support taxing large corporations.
“At a time when families in Roseland, Beverly, and Humboldt Park are struggling to keep up with rent and groceries, these alders are siding with the corporations who fight DEI and who are turning the tax breaks they’re getting from the President into donations to his White House ballroom,” the CTU statement reads. “Mayor Johnson’s proposal is the only one on the table that delivers for schools, parks, libraries, and making us safer and he found a way to make the ultra-wealthy corporations pay for it.”
In response to concerns for the tax’s impact on local business owners, Johnson said they’re considering reimbursements and establishing a new grant program for some small and medium-sized businesses.
“Our updated proposal will return to the original threshold of only taxing companies with more than 100 employees, but we would use those additional funds to set up a community business grant program to support small and medium-sized businesses that are operating in socially and economically disadvantaged areas, as well as important tourism and Investment zones and areas with food scarcity,” Johnson said.
Some City Council members have called for more efficiencies and cuts in the FY26 budget. During today’s finance committee meeting, Johnson’s Budget Director Annette Guzman said any additional cuts would come from the public safety portion of the budget, which includes the Chicago Police Department.
The proposed budget for CPD totals $2.1 billion for 2026, a 0.8% increase from last year. Johnson said he would not support any city layoffs in the FY26 budget.
Champion said that the committee’s vote doesn’t prioritize Chicagoans generally and Black residents in particular.
“I feel like what their vote shows is that they care more about corporations than they do people,” Champion said. “Specifically, as it relates to corporations’ ability to stay in the city, but not Black folks who are actually being pushed out.”
