By Townhall Chicago News Staff
Mayor Brandon Johnson on Tuesday delivered his fiscal year 2027 budget proposal to the Chicago City Council, outlining a plan that closes an $882.4 million budget gap by raising taxes on large corporations while maintaining city services.
The proposal, branded the “Fair Share Budget,” would create a new Equitable Employer Tax charging the city’s largest corporations $25 per month for each Chicago-based employee, generating an estimated $101.8 million in revenue, according to the mayor’s office.
The budget avoids layoffs and cuts to city services, instead relying on a combination of new corporate taxes, increased levies on existing revenue streams and nearly $120 million in operational savings. It also includes a $363 million supplemental pension payment, continuing a practice the Johnson administration began in 2023.
“Every year during the Johnson administration, the budget office has undertaken an exhaustive review of each City department’s spending — going line by line, looking for ways to streamline and cut costs without impacts on city services,” Acting Budget Director Jonathan Ernst said in a news release.
Among the largest revenue measures, the city would increase its Personal Property Lease Transaction Tax on corporations from 15 percent to 20 percent, projected to bring in $234 million in aggregate revenue. The Sports Wagering Tax would nearly double, rising from 10.25 percent to 20 percent, with an estimated $37 million in additional revenue.
The budget also counts on $49 million from the Social Media Amusement & Responsibility Tax, or SMART, which the administration says has outperformed projections by 77.9 percent through August 2026. A new Packaging Waste Tax of $0.15 per non-medical, non-food container is expected to generate $9 million.
On the spending side, the proposal includes $7 million in increased funding for Community Violence Intervention street outreach, enough to hire 390 new street outreach workers and 50 Youth Peacekeepers, according to the release. It permanently establishes the Department of Community Wellness and Safety and expands the Crisis Assistance Response and Engagement program to seven days a week.
The budget also allocates $30.9 million to Chicago Public Libraries, $30 million for homelessness prevention, $24 million for 40,000 summer youth employment positions and $7 million to sustain pay raises for more than 3,000 early childhood professionals.
Under the Equitable Employer Tax, companies could earn back a monthly tax credit for each Chicago resident they employ in historically disinvested neighborhoods through a program called the SEED Credit, the release said.
Chief Financial Officer Ashlee Gabrysch said the 2027 budget also addresses legacy police misconduct settlements, with the city planning to issue bonds over a short duration to cover costs.
“The City estimates that the global settlements accounted for in the 2027 budget will save the City between $300 and $400 million relative to litigation that could go on for years,” Gabrysch said in the release.
The administration also plans a vehicle debt amnesty program expected to collect more than $6 million by allowing residents to pay original fines in exchange for waived fees.
“The amnesty program is a win for the City and a win for residents,” Comptroller Michael D. Belsky said in the release.
The city’s Smart Streets traffic enforcement program, which uses cameras on city vehicles and CTA buses to identify vehicles parked illegally in bus and bike lanes, will expand to every ward in 2027. City data show 82 percent of drivers who received warnings or fines did not repeat the violation, according to the release.
The proposal was shaped by community engagement, with the administration citing input from hundreds of residents, including 88 percent who supported taxing large corporations to fund city services such as pothole repair, homelessness support, libraries and gun violence reduction.
The budget now heads to City Council for review and debate. Council members are expected to hold hearings on the proposal in the coming weeks before a final vote.
Source: City of Chicago Mayor’s Press Room
