Chicago Mayor Proposes Property-Tax Hike to Cover Shortfall

Chicago Mayor Brandon Johnson is set to unveil a budget solution aimed at closing a gap of almost $982 million.

Johnson is seeking to secure labor and City Council support with a budget proposal that steers clear of union layoffs and instead leans on property tax increases and surplus funds from tax-increment financing districts, Crain’s reported, citing sources at City Hall.

Johnson’s team previously proposed potential personnel reductions to help close the deficit, but union leaders including Chicago Federation of Labor’s Bob Reiter pushed back. Now, the budget largely avoids cuts that require union consent. By doing so, Johnson aims to maintain the union’s support at City Council, where 26 votes are needed for approval.

Alderman Byron Sigcho-Lopez, a strong ally of the mayor, voiced his support for Johnson’s approach, attributing the city’s financial pressures to decades of “mismanagement” and deferred revenue options.

The plan is drawing plenty of opposition, however.

“We can’t just continue to raise property taxes and then spend recklessly.” Alderman Timmy Knudsen said. “Obviously there’s a big gap, and we need confidence that the budget presented sets a framework for more fiscal stability for years to come. That’s going to come from cuts in addition to increasing revenue.”

Johnson’s budget proposal relies heavily on TIF surplus funds, which may reach over $500 million to aid in reducing shortfall. Chicago Public Schools is expected to receive a portion of this surplus, with CEO Pedro Martinez requesting additional funds for pension and labor costs.

The City Council’s approval hinges on Johnson balancing fiscal demands with the Progressive Caucus’s calls for $75 million in funding for city programs like housing, childcare and violence prevention programs.

Many of those services have previously been funded through federal relief, raising the stakes for Johnson’s allocation choices.

“These programs have become essential for how Chicagoans function and to the quality of life for so many people that we don’t think we can afford to not fund them,” said Alderman Maria Hadden, who co-chairs the Progressive Caucus.

— Andrew Terrell