Chicago Mayor Brandon Johnson embarked on a blitz Thursday to save the corporate head tax proposal in his 2026 budget plan, but businesses are fighting back.
Executives are arguing the proposed tax, which could be used to help close a significant budget deficit for the city, is a “job killer” that could backfire if enacted.
“We have been quite consistent on our priorities, but we are always open to new ideas. We remain open to compromise and working with anyone on the council,” Johnson said Thursday, as he announced a new tool to allow alderpeople an opportunity to provide his administration with recommendations for revenue and cost-saving measures in the budget.
Chicago City Council faces a New Year’s Eve deadline to pass the budget. The mayor has proposed a corporate head tax that would charge large companies $21 per employee each month, but half the council has expressed concerns about the tax.
“We have made considerations for many different business industries, but we see this as a responsible way to balance this budget with these large corporations. It’s going to affect about 3 percent of them,” the mayor told NBC 5 Chicago.
Business leaders like Sam Toia, president and CEO of the Illinois Restaurant Association, have warned that the head tax will negatively impact local businesses.
“This is just not a good idea because a midsized restaurant group could have over 100 employees. I have members that own one restaurant that have over 100 employees. Do not tell me they’re in the top 3 percent,” Toia said.
The head tax would affect companies that have 100 or more employees who spend at least 50 percent of their time in the city. Toia believes ultimately, imposing a head tax would backfire in a way the mayor isn’t anticipating.
“What you’re going to see is a lot of companies telling their team members to work two days a week in the city, three days a week from home, so now that cuts them out of the head tax. But you know what else that does? It hurts the restaurant industry, because people will not be coming to the offices and our breakfast places and our lunch places and our happy hour places,” Toia said.
On Thursday, Johnson invited NBC 5 Chicago as he and Alderman David Moore visited Cheryl Robinson, a South Side homeowner whose property taxes dramatically increased. Her home in Auburn Gresham is paid off, and she’s not happy with the recent tax bill, which increased nearly $1,000 from last year.
“I came this far to where I don’t have a mortgage anymore. But now my taxes (are) through the roof, meaning that I wasn’t even expecting this amount,” she said.
The mayor reiterated Thursday his refusal to raise property taxes or grant labor concessions.
“We’ve worked with our labor partners and there have been a number of means of cost savings that we’ve already implemented. And it’s important that before we ask for more layoffs, we should make sure that corporations stay at the table. That’s what’s most important here,” he said.
Though the mayor has promised no layoffs, labor sources have confirmed to NBC 5 Chicago that layoff notices have been sent out, including five layoffs in the Department of Procurement Services and between 50 to 70 in the Chicago Department of Public Health, or CDPH.
CDPH told NBC 5 Chicago the positions were funded through federal COVID-19 response grants, and the funding sources have run out.
“Employees in these roles were informed at the time of hire that their positions were temporary and contingent on the availability of funding. We understand the impact this can have on individuals and teams, and we are working diligently with our Human Resources department and union partners to minimize the effects of these changes wherever possible,” a spokesperson for CDPH said in a statement.
Procurement Services did not return NBC 5 Chicago’s request for comment.
When asked about the layoff notices, the mayor told NBC 5 Chicago, “They won’t have the position that they have, but they will be in a position to have other positions … These are some reconfigurations because of the COVID dollars that have run out, and so we know that this is a challenge with a lot of programs that have relied upon COVID dollars alone.”
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