Mayor Johnson's team compiles 26 ideas to raise revenue, plug Chicago’s budget deficit
Staring down the barrel of a $1.12 billion shortfall, Mayor Brandon Johnson’s administration on Thursday distributed a list of more than two dozen revenue generating ideas to take the temperature of City Council members who refused to raise property taxes a year ago.
The itemized list includes 26 ideas — along with high- and low-end revenue estimates. Eighteen of the ideas originated with members of the City Council. Seven came from civic organizations. One simply states “external stakeholder.”
The biggest potential money makers are an increase in property taxes with a high-end estimate of $396 million, and an increase in the $9-a-month garbage collection fee with a potential yield of $296.9 million.
The perennial idea of extending the state sales tax to professional services has a potential annual yield of $305 million, but that’s a change that can only be made by the Illinois General Assembly and would have to be signed by Gov. J.B. Pritzker, who has given a cold shoulder to the idea.
Other big-ticket items include: imposing a congestion surcharge ($103 million); raising taxes on liquor ($90 million), restaurant meals ($20 million), bottled water ($27.9 million) and checkout bags ($13 million); extending the amusement tax to resellers ($38 million) and imposing a city tax on sports betting ($17 million).
Lump sum “payments-in-lieu-of-taxes” imposed on hospitals, churches universities and other non-profits exempt from paying property taxes made the chart compiled by the mayor’s finance team with an annual revenue estimate of $52 million.
Reviving the $4-a-month-per-employee head tax condemned as a “job killer” and eliminated by former Mayor Rahm Emanuel would raise just $25.6 million. The list came in a 61-page memo sent to council members.
Budget Committee Chair Jason Ervin (28th) agreed with Finance Chair Pat Dowell (3rd) that the City Council needs to reinstate the automatic escalator imposed by former Mayor Lori Lightfoot that would lock in annual property tax increases to match the rate of inflation.
But, that’s as far as he was willing to go.
“It’s easy to say, 'Let’s just add more to the revenue pile.' But we really need to look at our expenses and how we can become more efficient. That has to be the first conversation before we dive into revenue,” Ervin said.
In a separate memo to city department heads Thursday, Budget Director Annette Guzman imposed a hiring freeze for the remainder of the year with the exception of “critical public safety, revenue-generating, mission-critical and legally mandated” positions.
The freeze will also apply to “non-essential” travel and “non-public safety overtime.”
That’s tinkering around the edges compared to the efficiencies that Ervin has in mind.
“Does a pothole get filled in seven days or does it get filled in ten days or fifteen days? Is garbage picked up once a week or once every other week? These are questions that need to be posed and what the fiscal impacts of these particular changes in service delivery are. Those questions have not been asked,” Ervin said.
Far Southwest Side Ald. Matt O’Shea (19th) agreed that “significant reductions in costs” are needed.
“We’re now almost at the eighth month of the year and now we’re talking about minor cuts to travel and hiring?” O’Shea said. “Before you bring me in a room and talk about something as drastic as [raising taxes], you better be able to identify cuts and efficiencies that people can take back to their community [and say], 'We’ve done this and we’ve done this and we’ve done this and it’s not going to get us there.’ “
At a recent softball game that pitted the City Council against a team from the Chicago Police Department, O’Shea said it was “surprising to hear” so many mayoral allies who supported Johnson’s hard-fought 2025 budget “make it clear several times that they were not voting for any type of property tax increase.”
“I don’t know what their appetite would be for any type of significant tax increase,” O’Shea said.
Johnson has ruled out a property tax increase. He has also slammed the door on employee layoffs and furlough days that could alienate the unions that put him in office.
Chicago Federation of Labor President Bob Reiter said there has been no discussion of either of those options.
"The last thing I would put on the table is layoffs and furloughs because, usually it doesn't result in saving any money. It usually ends up costing the city more," Reiter said. "You end up paying more in overtime. You end up paying more for contractors to come in and do it."