Chicago Mayor Brandon Johnson on Wednesday unveiled a $17.6 billion budget proposal for 2027, emphasizing investments in the city’s future, particularly children and underserved neighborhoods, even as significant opposition remains within the City Council. The proposed budget marks an increase of $760 million over the current year and revives a form of his previously rejected corporate head tax, now renamed the “equitable employee tax.” Under this plan, companies with more than 125 employees would pay $25 per worker monthly, with a full rebate for those headquartered in designated areas primarily located on the South, Southwest, and West sides of the city.
Johnson framed his budget around what he referred to as the “Fair Share” principle, echoing a similar initiative by former Mayor Harold Washington in 1986. He argued that new revenue measures, including the revised head tax, bond issuances, and other tax adjustments, are necessary to avoid property tax increases and layoffs while expanding city services such as tree trimming, rodent control, and mental health support.
During his address to the council, Johnson criticized corporations for their rising profits, contending there is no justification for leniency toward them amid ongoing demands for equity. While some council members applauded, much of the chamber responded with subdued reactions. The mayor did not directly mention the council’s previous rejection of his head tax proposal a year ago but expressed optimism that lawmakers might reconsider, citing prior successful taxation of leased property related to emerging technology sectors.
One of the most contentious elements of the budget is a planned $480 million bond issuance to cover police misconduct settlements, including a recent $260 million global wrongful conviction settlement and other approved settlements that currently lack allocated funding. City officials estimate this borrowing would save $300 million to $400 million compared to litigation costs over time. The funds would be repaid over five to seven years.
Council members remain divided on the proposal. A group of 23 aldermen, many of whom previously opposed the mayor’s head tax and sparked a historic budget defeat last year, have already voiced strong objections. Ald. Anthony Beale described the budget as excessive and politically motivated, while Finance Committee Chair Ald. Pat Dowell raised concerns about increased borrowing potentially jeopardizing the city’s credit rating and questioned the efficacy of some new programs.
The mayor’s administration anticipates closing 76% of a projected $882.4 million budget gap through structural adjustments—an improvement from previous years—by combining the revamped head tax (estimated to bring in $102 million), increased lease transaction taxes primarily targeting technology firms ($234 million), and changes to liquor, sports wagering, and package waste taxes generating an additional $60 million. However, a coalition of business groups has challenged the lease tax hike, warning it could inadvertently burden small businesses reliant on leased equipment.
The equitable employee tax’s design allows for full rebates in communities based on socioeconomic distress metrics, limiting applicability mostly to specific parts of the South, Southwest, and West sides. This reflects the mayor’s attempt to channel resources to historically underserved neighborhoods, although some aldermen from these areas have distanced themselves from Johnson.
Beyond tax and borrowing initiatives, the budget includes $132 million in new spending focused on quality-of-life improvements, such as expanding forestry and sanitation crews to address illegal dumping and overgrown lots, increasing the number of rodent control teams, and investing in youth jobs with a goal of employing 40,000 young people. Mental health services would receive additional funding, including plans to expand non-police 911 response teams and open a new clinic.
The police budget is set at $2.24 billion, an increase from the current year. The plan includes not filling 368 vacant officer positions and converting 132 sworn vacancies to civilian roles intended to reduce costs and free up law enforcement personnel for field duties. The budget also retains funding for a pilot gunshot detection program.
Pension contributions are projected to reach $2.94 billion, combining state-mandated payments and a continued “pension advance” designed to stabilize Chicago’s retirement funds. The city will apply $75 million from a recent parking meter deal toward this advance, which this year will be funded largely from the city’s operating budget rather than reserves, potentially limiting discretionary spending.
Johnson highlighted the necessity of increased revenue and investment to address both social justice priorities and practical challenges facing Chicago. While he acknowledged the difficult task of navigating a divided council, he pledged to continue working with aldermen across the political spectrum ahead of the 2027 budget’s negotiation and the upcoming election year.