Chicago’s revised budget plan has finally gained traction with a pared-down tax increase.
The City Council Finance Committee narrowly approved a $68.5 million property tax hike on Tuesday, moving the 2025 budget one step closer to finalization, Crain’s reported. The decision marks a significant compromise following months of fraught negotiations between aldermen and Mayor Brandon Johnson, who previously proposed a $300 million property tax hike to curb the city’s $982 million budget shortfall.
The revised property tax increase includes an adjustment tied to the consumer price index, which helps align the levy with inflation and forms part of the city’s $1.87 billion total tax income. That also includes $36 million in new revenue from real estate developments and the expiration of tax increment financing zones.
The 14-12 vote revealed deep divisions among city leaders. Alderman Brendan Reilly opposed the measure.
“We have a spending problem in the city of Chicago; we don’t have a revenue problem,” Reilly said.
Supporters, like Alderman Andre Vasquez, cited gains in transparency and accountability within the budget process as reasons for their approval.
“People don’t have confidence in how the mayor is moving or how city government operates, so doing these kinds of reforms allows us to restore that,” Vasquez said.
Beyond property taxes, the budget relies on $165.5 million in revenue from hikes in the cloud computing tax and streaming service tax, as well as increased fines and fees. The changes are part of a broader effort to stabilize the city’s $17.3 billion budget while avoiding layoffs and furloughs.
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Still, the financial adjustments required canceling $74 million in social programs, including a cut of $31 million from the basic income initiative, which would’ve provided $500 checks annually to 5,000 struggling families. It also scrapped $29 million in small-business grants, sparking further debate about the city’s fiscal priorities.
— Andrew Terrell