An alternative to the budget proposal being pushed by Chicago Mayor Brandon Johnson would increase the city’s garbage collection fee and raise the tax for liquor stores by 3%, among other measures.
The counterproposal, which was announced by a number of City Council members, would reject a corporate head tax “at any level,” according to a news release from the group; Johnson has called for a head tax on big companies to be instated – and other taxes to be increased – to plug the city’s projected budget gap of $1.12 billion next year.
In mid-November, Chicago City Council’s Finance Committee voted down the mayor’s 2026 revenue proposals, including the corporate head tax proposal, signaling an uphill battle to pass the budget before the end of the year.
The alternative budget proposal put forth by the council members includes a series of “negotiable options” that can be used to help close the budget deficit without relying on property taxes, reinstating the grocery tax or including a head tax, the members said in a letter to the mayor.
Under the measure, revenue would be obtained from a number of other sources, such as through augmented reality licensing, improving debt collection and increased Riverwalk gross revenue share fees.
Details on aspects of the counterproposal can be found below:
- A full advance pension payment of $260 million
- $166 million for firefighter back pay would be covered out of the corporate fund and “not the sale of general obligation bonds.”
- Restore $3.5 million in grant funding to youth guidance
Improving debt collection
A Chicago-Sun Times article mentioned $8.2 billion in uncollected city debt since the 1990s, including more than $1 billion in ambulance payments, utility bills, redlight camera tickets and other debts that have gone unpaid since December 2023.
The aldermen said they support selling off a portion of the debt, which will be recouped and applied to fill a portion of the 2026 budget.
Raise the liquor tax at liquor stores
The council members recommend the current tax structure remain in place for on-premise establishments while revising the structure for off-premise retailers.
The current structure can be found below:
● Beer: $0.29 per gallon
● Alcoholic liquor (14% alcohol by volume or less): $0.36 per gallon
● Alcoholic liquor (more than 14%, less than 20% alcohol by volume): $0.89 per gallon
● Alcoholic liquor (20% alcohol by volume or more): $2.68 per gallon
“Off Premise retailers would no longer be taxed based on gallonage and alcohol by volume, but
would be taxed based on retail sales,” the proposal stated. “This would require changes to the municipal code to create unique tax classification for on premise and off premise licensees and would add a 3% tax on sales for off premise retailers.”
Increase the garbage fee
The city’s garbage collection fee has remained at $9.50 per month since 2016, according to the council members. As a result, they recommend “increasing the garbage fee incrementally over multiple years.”
Discounts would continue to be offered for eligible seniors and utility relief eligibility would be expanded to ensure equity, according to the proposal.
Augmented reality licensing
The city could generate revenue by licensing the use of augmented reality content or applications “on” city property—like Millennium Park and the Riverwalk—and at City events, such as parades and festivals, the proposal stated.
Congestion pricing
The group of aldermen recommends the restoration of the initial congestion fee proposal, which would impose additional fees for riders who are picked off up in dropped off in two congestion zones.
Fee amounts: $1.50 per single ride and $0.60 per shared ride between 6:00 a.m. and 10:00 p.m.
These surcharges would be in addition to base transportation network tax rates, which would
shift from flat fees to percentage-based rates of 10.25% for rides entirely within the city and 5.12% for rides with only pickup or drop-off in the city, according to the group’s proposal.
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