Five paths to shrinking Chicago's deficit
Add Axios as your preferred source to
see more of our stories on Google.
Illustration: Brendan Lynch/Axios
Mayor Brandon Johnson is warning that Chicago has reached an economic "point of no return" with multiple agencies facing yawning deficits, and a $1.1 billion gap in next year's budget forecast.
Why it matters: This month the mayor's team must consider a suite of cuts or revenue boosters to close that gap, and none are likely to improve his popularity.
The big picture: The nonpartisan Civic Federation tells Axios that Johnson must first "identify savings and improve operational efficiencies, including controlling personnel-related costs" before looking at new taxes and fees.
- But Johnson says he's prioritizing progressive revenue by asking the "ultra-rich" to put more "skin in the game."
Case in point: The mayor released a list of 26 revenue-generating ideas gathered from alders, working groups and civic organizations that could be used to bridge the gap.
- We examine some of the most likely here.
Reinstating a property tax escalator that pegs annual property tax increases to the rate of inflation.
- The idea that was originally instated under former Mayor Lori Lightfoot has been endorsed by budget committee chair Ald. Jason Ervin and finance chair Pat Dowell.
- Yes, but: Johnson, who ran on forgoing property tax hikes and got burned by proposing a big one last year, is steering clear of them for now.
Raising garbage collection fees from the current $9.50 a month to as high as $52 could net $296.9 million a year, according to the mayor's list of ideas. Chicago garbage fees haven't risen in a decade, and many cities across the nation charge three times local rates.
- Last year Ald. Matt O'Shea (19th) supported the move and floated creating a volume-based system that rewards recycling.
- Yes, but: Ervin calls it a "regressive tax on some of our poorest citizens."
Reviving a head tax, under which big companies pay $4 a month per employee, could raise $25.6 million.
- Johnson campaigned on reviving this tax that was terminated by former Mayor Rahm Emanuel and says it's on the table this year.
- Yes, but: The Civic Federation predicts it "would generate limited revenue while likely discouraging job creation."
Charging a professional services tax on things like haircuts, lawn care and car repair could yield an estimated $305 million for the city.
- Ralph Martire of the nonpartisan Center for Tax and Budget Accountability heartily endorsed this plan in a Sun-Times op-ed earlier this year, predicting it could generate $2.6 billion across the state and "help sustain investments on core public services into the future."
- Yes, but: It would require approval in Springfield, making any effort too late for the FY26 budget.
Asking universities, churches and other nonprofits to make a payment in lieu of property taxes (PILOT) could raise $52 million annually.
- Johnson supports the measure, saying last month, "This is something the city should be looking at."
- Yes, but: The Civic Federation notes that these payments "are typically voluntary and administratively complex. Any serious consideration must be preceded by a careful evaluation of the public benefits already provided by nonprofit institutions and how those contributions would be factored into any PILOT framework."
What's next: The Office of Management and Budget needs to submit a balanced budget next month, and the mayor must present his version by mid-October.