Chicago 2027 Budget: Johnson’s $17.6 Billion Plan Faces Head Tax Fight in City Council

Photo: Chicago City Hall on LaSalle Street (file photo). Ajay Suresh, Wikimedia Commons, CC BY 2.0.

Chicago’s City Council is a week into hearings on Mayor Brandon Johnson’s proposed 2027 budget, a $17.6 billion plan that would close an $882.4 million gap largely through new and higher taxes on corporations, sportsbooks and package deliveries. Alders have until Dec. 31 to pass a balanced Chicago budget, and early hearings showed the main fight will be over a corporate head tax that failed last year.

What is in Johnson’s 2027 Chicago budget proposal

Johnson introduced the plan, which his office calls the “Fair Share Budget,” at a special City Council meeting on Oct. 21. According to the mayor’s office, it closes the shortfall without layoffs or cuts to core services. The city says the proposal reflects community engagement sessions in which 88% of participating residents called for taxing large corporations.

On the spending side, the plan would make the Department of Community Wellness and Safety permanent, add $7 million for community violence intervention street outreach (enough, the city says, to hire 390 outreach workers plus 50 Youth Peacekeepers), and add $30 million for homelessness prevention and support. It would fund 40,000 paid summer youth jobs through a $24 million investment, provide a $30.9 million subsidy to Chicago Public Library, and expand the CARE crisis-response program to seven days a week.

The administration also says it will find nearly $120 million in savings in 2027 through real estate consolidation, fleet modernization and organizational changes, and it plans another $363 million supplemental pension payment on top of what state law requires. The city says it has made nearly $1.1 billion in such advance payments to its four pension funds since 2023.

The tax measures driving the debate

The most contested item is the Equitable Employer Tax, a head tax of $25 per month for each Chicago-based employee at large companies outside socioeconomically disadvantaged areas. ABC7 Chicago reported it would apply to companies with at least 125 full-time employees. The city projects $101.8 million from it. Companies could earn back a monthly credit for each Chicago resident they employ in a historically disinvested neighborhood.

Other measures include raising the Personal Property Lease Transaction Tax, often called the cloud tax, on corporations from 15% to 20% (car leases would stay at a flat rate), nearly doubling the sports wagering tax from 10.25% to 20%, and a new 15-cent tax on non-food, non-medical packages delivered in the city. Axios Chicago also listed a higher off-premises liquor tax among the proposals.

By the numbers: where the new money would come from

Using the city’s own projections, the five tax measures above add up to about $430.8 million, roughly 49% of the $882.4 million gap (TBR calculation from City of Chicago figures). The lease tax increase is the single largest piece at $234 million, more than twice the head tax. The head tax, though, is the item alders have singled out: at the first hearing, one council member asked why $114 million of the budget was “built on a tax that has already been rejected,” according to ABC7. The figure differs from the city’s $101.8 million projection, and the station did not explain the gap.

The social media tax, which took effect in 2026, is projected to bring in $49 million again in 2027. The city says it is running 77.9% above projections through August.

Borrowing for police misconduct settlements

The plan also relies on borrowing to cover close to $500 million in police misconduct settlements, ABC7 reported. Chief Financial Officer Ashlee Gabrysch said in the city’s release that the global settlements “will save the City between $300 and $400 million relative to litigation that could go on for years,” and that the bonds would be issued over a short term with level debt service. CBS Chicago reported that the first hearing drew pushback from alders and that many signaled the budget could come down to the wire.

The budget would also launch a vehicle debt amnesty program, which the city estimates will collect more than $6 million, and expand the Smart Streets camera program, which tickets cars blocking bus and bike lanes, to every ward. The City Council approved that expansion this week, CBS Chicago reported.

What happens next

Budget committee hearings were scheduled almost daily through Nov. 10, with a break for the Nov. 3 election. The council must adopt a balanced budget by Dec. 31. Johnson tried and failed to pass a head tax in last year’s budget, and Axios Chicago described the divide among alders as a sign of a long, grueling budget season while Johnson runs for reelection; WBEZ reported this week that 16 candidates met the deadline to file signatures for mayor.

For comparison with another big city’s finances, see our coverage of Boston’s office vacancy rate, which shapes that city’s commercial property tax base, and the 100 Summer Street auction in downtown Boston. More Chicago coverage is on our Chicago news page.

Sources

• City of Chicago, Mayor’s Press Office: Mayor Brandon Johnson introduces Chicago’s Fair Share Budget for Fiscal Year 2027 (Oct. 21, 2026)
• ABC7 Chicago: City Council members begin reviewing Johnson’s budget plan (Oct. 26, 2026)
• CBS Chicago: Johnson’s 2027 budget plan faces pushback from alders in first hearing

Additional sources

• Axios Chicago: Alders chime in on Johnson’s proposed 2027 budget (Oct. 21, 2026)
• City Council record F2026-0029537: special meeting to receive the 2027 Executive Budget
• CBS Chicago: Smart Streets program expanding citywide (Oct. 30, 2026)
• WBEZ: Weekly News Recap, Oct. 30, 2026