Mayor Brandon Johnson abandoning $68.5 million property tax hike in latest bid for budget deal
CHICAGO (CBS) -- Seeking to get a budget deal done on Monday, Mayor Brandon Johnson has dropped plans to seek a $68.5 million property tax hike, sources have told CBS News Chicago, though it remains unclear if his latest proposal will win him enough votes from the City Council.
The move comes as the mayor and aldermen have been spending the weekend working to negotiate a possible deal to end the budget impasse in time for a vote on Monday afternoon. The mayor's team was holding briefings with alders on Sunday to discuss his latest plan.
Sources said one new element of the effort to pass a budget deal on Monday includes the city cracking down on major sports teams and other venues in Chicago to reimburse the city for police overtime costs for special events. That would bring in an estimated $10 million for the city.
The city spent $22.6 million on police overtime for special events this year but has only been reimbursed $2 million, leaving taxpayers to cover the remaining costs.
City law requires special event producers to pay for police services beyond 12 shifts. However, an investigation by Block Club Chicago and CBS Chicago revealed through records requests that the city has not been retroactively charging for those costs.
In 2024, the police department spent $22.6 million on special event overtime across various music, street, and neighborhood festivals. About $7.2 million of that is attributed to ticketed events like Lollapalooza, the Chicago Marathon, and NASCAR. However, the city has only been reimbursed for Lollapalooza and the Chase Corporate Challenge, totaling just under $2 million, police officials disclosed last month.
In addition to seeking the money the city is owed for police overtime for special events, sources said the mayor's new budget plan would save $40 million by delaying payment of a debt that had been due in its entirety this year, freeing up that money for 2025.
Instead, the city will "amortize" that debt, costing an additional $2 million in the long-run, according to Crain's Chicago Business. The debt had been tied to the city's purchase of the old Michael Reese Hospital site under former Mayor Richard M. Daley as part of his failed bid to host the 2016 Summer Olympics.
"This is like taking out a payday loan to say that, 'Look, I got a raise in my salary.' That's not how this works," said Ald. Raymond Lopez (15th). "It is the exact opposite of what Chicagoans want. They want cuts, they want an effort to right-size government, and simply taking out a loan to get through the moment is unacceptable."
Other new details in the mayor's latest budget proposal include:
- $1 million in savings by reducing the number of positions in the mayor's office.
- $2.8 million in savings by cutting "middle management" positions.
- $8.6 million in savings through reduced spending on city contracts.
- $5 million in unspecified "energy and facility management efficiencies"
This is the mayor's fourth budget proposal. Alders have shot down his last three plans. Some have said the mayor's latest plan still doesn't cut spending enough.
"People are looking for cuts and efficiencies, and these cuts are nowhere near the cuts that need to be done," said Ald. Anthony Beale (9th).
Lopez and Beale are part of a coalition of 15 alders proposing far more sweeping spending cuts citywide to trim more than $800 million from the city's budget.
"I just really wish that the administration would, for once, put his pride to the side, and he claims he's a collaborator-in-chief, but he's not collaborating with the 15-16 people who have stopped this trainwreck. He's just insisting on hitting the gas and going over the cliff, and that's what he's about to do," Beale said.
The 15 alders seeking deeper spending cuts sent the mayor a letter Sunday night outlining their proposals. Among their demands for reduced spending:
- Eliminating the $432,000 set aside in the budget for Ald. Walter Burnett (27th) for his largely ceremonial role as vice mayor.
- Eliminating the "detached services" spending for security details for the city treasurer, city clerk, and committee chairs.
- Eliminating the Office of Public Safety Administration, saving an estimated $61.3 million. The office was created under former Mayor Lori Lightfoot in 2020 to merge the administrative functions of the Chicago Police Department, Chicago Fire Department, and Office of Emergency Management and Communications under one agency.
- Shifting the responsibility for $175 million in pension payments for non-teaching staff at the Chicago Public Schools back to the school district.
- Keeping spending for youth employment programs and homeless support programs at current levels, rather than expanding them as the mayor wants.
In their letter, those same alders criticized Johnson's latest budget plan, calling it a "gimmick" that would simply amount to a "delayed backdoor property tax increase" by adding to the city's debt burden.
In addition to their push for spending cuts, the same alders also are demanding the return of ShotSpotter gunshot detection systems until a replacement system is found; an agreement to split the current 8th District of the Chicago Police Department into two districts, with a new station in the Chicago Lawn area; an agreement to build a new satellite police station in the 12th District; and finalizing new contracts with the unions representing Chicago firefighters and police sergeants.
Johnson and the City Council have until Dec. 31 to approve a balanced budget plan for 2025, or face an unprecedented city government shutdown.
"It's a real possibility if we don't figure something out by December 31st, and there will be clearly people to blame for that. I won't be one of them, though," said Ald. Jason Ervin (28th), a mayoral ally who chairs the City Council Budget Committee said on Saturday. "You have a group of people in the City Council that's hell-bent on driving us over an edge."
Former Ald. Dick Simpson, a retired UIC political science professor, said it's unclear exactly what would happen if the city were to face a shutdown. The mayor's budget team has acknowledged they don't have the authority to pay city employees beyond the end of the year if there is no budget in place, even on an temporary emergency basis.
"It's either you get a budget or you close," Simpson said. "It would be a mess, and we don't really know how to handle it since we've not had it happen."
On Friday, Johnson called off his effort to pass a budget plan that would have included the $68.5 million property tax hike before debate could begin, after failing to get enough support for the plan, which also included other tax increases and minimal cuts.
The mayor recessed the City Council meeting until Monday at 1 p.m., when he could try to call for a vote on a new plan. However, some alders have suggested that's not enough time to review any changes the mayor might make to his budget proposal this weekend.
"We want to go through everything with a fine-tooth comb, but reconvening on Monday's not going to give us enough time," Ald. Nicole Lee (11th) said after Friday's vote was called off.
Facing a nearly $1 billion budget shortfall for next year, the mayor originally proposed a $300 million property tax hike, which was swiftly and unanimously rejected by the City Council. He has since whittled down his proposed property tax hike to $68.5 million, but it appears even that may be too high for most alders.
"We're still not there. We are still not there. There is more fat that can be trimmed, and in some cases these are going to be painful cuts," said Ald. Matt O'Shea, one of many alders who have been urging the mayor to cut spending rather than relying on tax hikes.
However, the mayor has adamantly resisted making any cuts that would result in layoffs or furlough days for city workers, or reductions in day-to-day city services.
As it stands, the mayor's current $17.3 billion budget plan includes a laundry list of increased taxes, fines, with minimal spending cuts:
- A $128.1 million from increase on the city's tax on cloud computing services.
- A $12.9 million tax increase on streaming and cable TV services.
- A $11.3 million increase in the tax on parking garages and valet parking services.
- An $8.1 million increase in the congestion surcharge on ride-hailing trips that start or end downtown.
- A $5.2 million increase on the tax on checkout bags from 7 cents to 10 cents per bag.
- $11.4 million in additional revenue from new speed cameras.
- $3.1 million in unspecified cuts from the Department of Fleet and Facilities Management.
- $13.1 million in cuts from the city's general finance fund by reducing the amount going to pay down existing debt.
- $74 million in cuts from federal COVID-19 relief funds the mayor had planned to use to finance a guaranteed basic income program and small business assistance programs.
It's unclear if the mayor will push forward with a vote on his latest budget plan on Monday, and if he does if he can get the 26 votes he needs to pass it.
Sources said Johnson's budget team would be working late into the night on Sunday to shore up votes.
The mayor's loudest critics said they are working on an alternative budget plan of their own, but the mayor has not reached out to them to talk through ways to find middle ground.
Some are dubious a budget vote will happen Monday at all, with just over two weeks to get the deal done, predicting a budget vote will be pushed back once again.