A group of 26 alders put forth an alternate budget last week after the Chicago City Council Finance Committee rejected Mayor Brandon Johnson’s proposed revenue-generating options for 2026, including plans to tax large corporations and take out loans to cover firefighter backpay and police misconduct.
The alternate budget from the coalition of mostly moderate and conservative-leaning alderpeople relies on regressive fees, according to expert analysis. Some of those include a garbage fee hike from $9.50 to $18 and increasing the city’s liquor tax by 3%.
Pat Doerr, director of the Hospitality Business Association of Chicago, is opposed to increasing the liquor tax. The suggestion initially appeared in an August recommendations report from the city’s Chicago Financial Future Task Force, but it was not included in Johnson’s 2026 budget proposal.
“These eggheads, who never apparently owned a bar, restaurant or grocery store, said that [the current tax rate] was unfair to the city because those rates haven’t changed with inflation,” Doerr told The TRiiBE. He explained that the liquor tax rate is based on the volume of alcohol delivered by distributors and retailers who pay the tax to the city.
“These two proposals that are kicking around from the mayor’s task force [and] the alternate budget group both entirely missed the point that sales tax captures all that inflation already,” Doerr said. “When you buy beer, wine or spirits in Chicago, you’re paying a city excise tax, a county excise tax, a state excise tax, a federal excise tax and a sales tax, and that adds up to the most heavily taxed beer, wine or spirits in the Midwest.”
The alternative budget is an attempt by opponents of Johnson’s head tax to offer ideas to close the city’s $1.19 billion budget gap for 2026. The alders say they are looking for efficiencies: for example, they suggest that keeping the youth employment at its current level instead of expanding the program could save $6.2 million, improving the city’s collections system by selling off a portion of debt from unpaid tickets and city services could bring in $150 million, restoring the city’s original traffic congestion fee could bring in $48 million, and ensuring the parking meters are at 100% operability could bring in $6.5 million, and reducing the tax increment financing (TIF) surplus by $100 million.
According to an analysis by the Institute of Public Good (IPG), the alternative recommendations rely on regressive fees. The alders’ suggestions “hold fraught assumptions, core contradictions, and an overall increased cost burden on working class Chicagoans.” The analysis concluded that some of the efficiencies being proposed would result in higher healthcare costs for city workers.
“Literally, it just isn’t a feasible budget. It’s just going to put more burden on citizens, and it doesn’t alleviate the burdens that everyday citizens are currently facing,” Chicago Black Voter Project organizer Marian Patton told The TRiiBE.
With Johnson and a faction of the Chicago City Council seemingly at an impasse, one question surrounding the budget debate is why some alders — especially in a Democratic city — would choose implementing regressive fees on working people over taxing corporations while President Donald J. Trump’s administration continues to cut vital services.
“They’re politically undesirable revenue sources, but they’re reliable revenue sources just because people are going to continue to need to take out the trash and people are going to continue to buy liquor and so forth,” Center for Municipal Finance Director Justin Marlowe said about regressive fees. He also works as a research professor at the University of Chicago Harris School of Public Policy. “I don’t know that it adds stability, but it doesn’t necessarily create any new instability or any new uncertainty.”
This week’s Finance and Budget Committee meetings have been cancelled. A weekend meeting between some City Council members and Johnson’s budget team didn’t yield much progress as the alternate budget group plans to “move forward” with their proposal in hopes of passing a budget before Dec. 30. Johnson has said he would veto any proposal that includes regressive fees.
Although 26 alders signed the letter expressing opposition to Johnson’s corporate head tax, also known as the Community Safety Surcharge, some say they don’t support everything proposed in the alternate budget. Ten Black alders signed the letter, two of whom are members of the City Council Progressive Reform Caucus.
Ald. Ronnie Mosley (21st Ward), a member of the City Council Progressive Reform Caucus, said he signed the letter but doesn’t support everything in it. He agrees with the head tax and the proposed TIF surplus, which would fully fund the Chicago Public Schools budget throughout the school year.
Asked how residents would know he supports the head tax since he signed the letter with the alternative budget, Mosley said people wouldn’t know unless they talked to him “one-on-one.”
“Everybody has to pay and help us close this budget gap, corporations included. It’s about getting them to the table and seeing what’s also going to work with them, and not just dictating to them what’s going to be needed,” Mosley said, “the same way we wouldn’t just dictate to any other interest group or faction and so forth.”
Ald. Monique Scott (24th Ward) said she understands why some people support the head tax, but maintains her position that the policy would push out businesses. She represents West Side neighborhoods including North Lawndale and Douglas Park.
“Downtown vacancy rates are still historically high, and when those major commercial buildings lose value, the burden shifts to neighborhoods like the 24th Ward,” Scott told The TRiiBE in a text message.
There’s been concern among some Chicagoans that some alders are putting their campaign donors’ wants and needs ahead of their residents. Notably, many of the Black council members who oppose the head tax have received past donations from Michael Sacks, or in some instances his wife Cari Sacks. The Chicago-based billionaire is a notable Democratic donor who has funded ads against the head tax.
According to the Illinois Sunshine Database, Scott , Ald. Emma Mitts (37th Ward), Ald. Anthony Beale (9th Ward), Ald. Stephanie Coleman (17th Ward), Ald. Pat Dowell (3rd Ward), and Ald. Greg Mitchell (7th Ward) have received thousands of dollars in donations from the Sacks to their candidate committees.
Scott responded to these concerns.
“My votes and positions are driven by the needs of the 24th Ward, period. Not by donors and not by interest groups. Every decision I make is rooted in long-term impact and what actually helps my residents,” Scott wrote. She referred to an analysis by the Cook County Treasurer’s Office that found this year’s increased property taxes were due in part to properties in the Loop losing assessed value, which largely impacted mostly Black areas such as West Pullman and North Lawndale.
“If downtown vacancies rise further and commercial values continue to fall, our ward will feel those consequences directly on our property tax bills,” Scott said.
Dowell also said she has “never been influenced by donors” and always votes in the best interest of her constituents. She has stood firm in her opposition to the head tax.
Regarding the head tax, Marlowe said it is difficult to know its impact because no city has had one since the COVID-19 pandemic. The pandemic dramatically shifted things, Marlowe said, in terms of the number of employees working remotely. In November 2011, the Chicago Tribune reported the head tax — then $4 per month for companies with more than 50 employees — brought in up to $23 million a year. Chicago had a head tax from the Mayor Richard J. Daley administration in the 1970s until Mayor Rahm Emanuel eventually killed it in 2014.
Initially proposed as a $21-per-month tax on companies with 100 or more employees, Johnson’s most recent head tax proposal has been amended to a $33 monthly fee for companies with 500 or more workers, according to the Tribune’s Alice Yin.
“You really can’t overstate just how different the downtown business community in many big cities is today compared to five years ago, and we’re just starting to understand some of those longer-term structural kinds of shifts,” Marlowe said. “So if you propose a head tax now, it could have all kinds of intended and unintended consequences. It’s speculative, at this point, on both sides to say this is exactly what would happen if you do a head tax.”
On Dec. 3, organizers took to the upscale Gold Coast neighborhood for a Tax the Rich Holiday Rally. They called for alder people to pass Johnson’s “Protecting Chicago Budget,” which largely includes calls from community organizers to make the wealthy pay their fair share.
Ald. William Hall (6th Ward), a member of the City Council Progressive Reform Caucus, who has been a loud supporter of the mayor’s budget, spoke during the rally.
“Myself and so many aldermen will not vote for a budget that will tax the poor and give an excuse to the rich. We will not support a budget with garbage fees sky high, and yet we take the garbage of incorporation,” Hall said. “We will not support a budget where our kids’ schools are not funded and corporations use a slush fund to build more buildings for themselves.”
Larnce White, who attended the Tax the Rich Rally, said he is disappointed with the opposition to the head tax. A resident of the 9th Ward, White also said he is disappointed with his alderman’s position against the mayor’s budget. He said he’s been reaching out to Ald. Beale but has not been able to speak with him.
“It really just tells me what type of values they have,” White said about those in opposition. “It is very simple. It’s your opportunity to fund schools, fund mental health and make sure the citizen services are not cut then it’s a simple yes for the mayor’s [budget], and if you say anything differently, I just hold you in caution because I really don’t trust you anymore.”
Here’s the list of 26 alders who signed the letter proposing the alternative budget:
Brian Hopkins (2nd Ward)
Pat Dowell (3rd Ward)
Desmon Yancy (5th Ward)
Greg Mitchell (7th Ward)
Michelle Harris (8th Ward)
Anthony Beale (9th Ward)
Peter Chico (10th Ward)
Nicole Lee (11th Ward)
Stephanie Coleman (17th Ward)
Derrick Curtis (18th Ward)
Matt O’Shea (19th Ward)
Ronnie Mosley (21st Ward)
Monique Scott (24th Ward)
Felix Cardona (31st Ward)
Scott Waguespack (32nd Ward)
Bill Conway (34th Ward)
Gilbert Villegas (36th Ward)
Emma Mitts (37th Ward)
Nicholas Sposato (38th Ward)
Samantha Nugent (39th Ward)
Anthony Napolitano (41st Ward)
Brendan Reilly (42nd Ward)
Timmy Knudsen (43rd Ward)
Bennett Lawson (44th Ward)
James Gardiner (45th Ward)
Debra Silverstein (50th Ward)
