Illinois Governor JB Pritzker has once again voiced his opposition to a proposed corporate head tax in Chicago, as Mayor Brandon Johnson includes the measure in his latest budget proposal for the city. The tax, which would levy a monthly fee per employee at large companies, has stirred debate ahead of both leaders’ upcoming reelection campaigns.
Pritzker expressed his concerns on Thursday during a news conference in West Englewood, arguing that the tax could discourage hiring and ultimately harm economic growth. “It’s just the most direct signal to employers: don’t hire more people,” the governor said, emphasizing the importance of job creation across Illinois. “I love this city. I’m from the city. I live in this city. But I also am the governor of the entire state, so everybody deserves to have a more affordable state.”
The proposed head tax would apply to companies with 125 or more employees, charging $25 per employee each month. However, the plan includes a tax credit designed to encourage companies to locate jobs within economically disadvantaged areas of Chicago, primarily on the South, Southwest, and West sides. Employees must perform the majority of their work hours in these designated zones for the company to qualify for the credit. Additionally, the city comptroller would establish rules to address services that make it difficult to determine work locations.
Mayor Johnson’s spokesperson, Griffin Krueger, defended the measure as a tool to promote job growth and economic development in underserved communities. Krueger also highlighted state law restrictions on Chicago’s ability to raise corporate taxes without Springfield’s approval. “The Mayor appreciates the Governor’s stated support for a state-wide millionaires tax and remains committed to working with the Governor and the General Assembly to pursue expanded home rule authority to give Chicago greater flexibility,” Krueger said.
This proposal marks the second consecutive year Johnson has pushed for a corporate head tax, following his initial 2026 budget plan which faced rejection by both aldermen and Pritzker. At that time, the governor was “absolutely, four-square opposed” to imposing a $21-per-employee fee. The debate on this issue has occasionally grown heated, notably when progressive alderman Byron Sigcho-Lopez publicly confronted the governor last year.
Johnson, confronting a significant budget deficit for 2027 and an upcoming reelection, is seeking ways to pursue new revenue without directly raising taxes on residents during an election year. His current budget proposal also aligns with his long-standing agenda to increase taxes on the wealthy.
The mayor’s effort faces resistance within the City Council, where 29 aldermen have signed a letter opposing the head tax. With a simple majority of 26 votes required to pass the budget—potentially 25 if Johnson casts a tie-breaking vote—the path forward remains uncertain as the city prepares to finalize its fiscal plan.