A City Council majority came out with a budget plan Tuesday that raises garbage collection fees and liquor taxes while eliminating Mayor Brandon Johnson’s corporate head tax entirely for 2026, hours after he delivered a stinging rebuke to opponents of his controversial levy proposal.
It was the latest exchange in ongoing brinksmanship between the freshman chief executive and his rebellious legislative counterparts. And with just a month until the end-of-year deadline for the City Council to approve a budget, the group of 26 aldermen — including Johnson allies and progressives — pitched the changes in a letter that marks the council’s clearest challenge yet to his 2026 spending plan.
But while the aldermen raised the stakes by responding to Johnson’s call for them to come up with their own budget idea, it’s unclear what chance their counterproposal has.
It calls for nearly doubling the city’s garbage fee to $18 per household per month in lieu of Johnson’s $21-per-employee monthly tax on corporations that was rejected by a City Council committee last month. A defiant Johnson told reporters again Tuesday he was not backing down from the head tax — and would veto any budget that raises trash pickup fees.
That means 34 out of 50 council members would need to sign on to any budget with such a hike to override him. And the latest aldermanic plan would just barely achieve a simple majority if every signee to the Tuesday letter voted for it, far from a certainty given the way council members change their positions from day to day during private City Hall budget negotiations.
The group of aldermen said in their letter that they also want to raise $24 million in 2026 by hiking the city tax on retail beer, wine and liquor sales.
Their plan seeks to fully restore an advance payment to the city’s underfunded public pensions, and tosses a borrowing plan for the new firefighters’ contract.
They argue at stake are costly drops to Chicago’s credit rating, downtown’s future and jobs needed to maintain the city’s tax base.
“Budgeting without regard for these realities is a dereliction of our public duty. We must choose to lead this government responsibly, and we must make that choice now,” the letter said.
Earlier in the morning, as rumors of the plan swirled in City Hall, Johnson went on the offensive. He opened his weekly news conference by deriding political organizations opposing his head tax as liars, and implored aldermen to side with hungry families over corporations.
“It has been brought to my attention that there is a number of entities that are relaying information that would make Donald Trump blush,” Johnson said, referring to attack ads funded by business leaders. “Frankly, I think it’s beneath these so-called business leaders to lie to the public. … There’s no need to treat the people of Chicago like they’re stupid just because they may not have as much money as you do.”
Johnson unveiled a $16.6 billion budget plan in mid-October that he framed as Chicago’s greatest chance to stand up to an antagonistic White House, though the city’s fiscal woes long predate the second administration of President Donald Trump. Reinstating the head tax was part of a bundle of new levies and fees that would close a projected $1.19 billion deficit — without hiking property taxes — but a City Council panel voted down his revenue package in a stunning rebuke.
On Tuesday, aldermen presented the following amendments to Johnson’s proposal: restoring the advance pension payment from $140 million to $260 million; scrapping a three-year borrowing plan for $166 million in firefighter backpay and covering the full amount with the corporate fund; and shrinking a record $1 billion tax increment financing surplus by $100 million.
To balance the budget, the group proposes a series of “efficiencies,” spending cuts, and tax and fee hikes.
In addition to the liquor tax bump, their plan counts on the city taking in another $48 million by widely expanding the city’s downtown ride-share surcharge area, plus an extra $55 million from the higher garbage collection fee.
In a move sure to rankle Johnson, the aldermen are also seeking to block his plan to ramp up corporate fund spending on youth summer employment. Instead, they hope to freeze the program Johnson describes as violence prevention at 2025 levels, a move they say will save $6.5 million.
The proposal includes $90 million in “efficiencies” recommended by Ernst and Young. Many of the most pivotal changes recommended by the consulting firm would require labor negotiations, such as a cut to the number of managers in city departments or major shifts in employee health care.
The aldermen’s budget also relies on a number of untested ideas: $26 million to come from licensing city property for “augmented reality” advertisements, $150 million from “improved debt collection” and $31.6 million from improved revenue projections based on data released Friday.
Noteworthy among the signatories was Johnson’s handpicked Finance Chair Ald. Pat Dowell, 3rd, who publicly warned the mayor against forging ahead with the head tax before it failed in her committee. Black Caucus Chair Ald. Stephanie Coleman, 16th, and two progressives, Alds. Desmon Yancy, 5th, and Ronnie Mosley, 21st, also signed the letter.
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The mayor, for his part, singled out Common Ground Collective on Tuesday for running an attack campaign saying his “so-called Community Safety Fund, paid for with $100 million in new taxes, doesn’t make any new investments in public safety or youth programs.” Talking to reporters, the mayor argued that “no resident will be impacted by this tax,” that only a tiny share of large corporations would, and that the revenue would indeed go toward those programs.
Johnson’s head tax proposal applies to companies with over 100 employees, but some aldermen and business owners say that size is hardly the threshold for a large corporation. And while the new $100 million fund would go toward safety priorities, it would only serve to maintain existing programs currently supported by the corporate fund or expiring federal COVID-19 relief dollars. Some line items would see marginal increases, and others decreases, but spending levels from this year’s budget would largely stay the same.
“The mayor seems to be having a hard time accepting that an overwhelming majority of Chicagoans not only reject his leadership of the city, but his budget,” Mike Ruemmler, head of One Future Illinois, said in a statement after Johnson’s news conference. “It’s a hard reality to face and I’d be upset too.”
The mayor also shrugged off complaints that his closest ally, the Chicago Teachers Union, was the entity being misleading in its ads decrying aldermen who opposed his budget plan. The influential labor group, Johnson’s biggest backer in his 2023 election, posted a video after his head tax defeat that claims aldermen against the levy want to raise property taxes instead.
Johnson and his budget team countered that those are indeed the only two options, barring major layoffs in the police and fire departments.
“They’re not coming out saying it out loud because, for whatever reason, they don’t have the fortitude or the gall to actually state their position out loud,” Johnson said about unspecified aldermen who, according to him, privately indicated they want to raise property taxes. “So no, it’s not misleading.”
Johnson pledged not to raise property taxes in his 2023 mayoral campaign, but tried to break that promise a year ago when he proposed a whopping $300 million hike in his 2025 budget plan. Aldermen resoundingly shot the idea down.
Now, with the next municipal election looming in early 2027 and the latest property assessments hitting South and West Siders the hardest, most council members agree it’s politically impossible to go that route this time.
But an exasperated Johnson hasn’t found a way to win them over on the head tax, either. He told the council on Tuesday to do its homework and come up with a better solution. A few hours later, the aldermen released the letter arguing they had done just that.