Chicago City Wire

Brandon Johnson, the Mayor of Chicago, has proposed a budget for 2026 that has drawn criticism from various quarters. The proposal aims to address a $1.16 billion deficit by introducing new or increased taxes and fees expected to raise approximately $617 million. Additionally, it includes declaring a record $1 billion in one-time tax-increment financing (TIF) surpluses, with about $520 million directed toward Chicago Public Schools (CPS). Over two years, CPS is set to receive nearly $1.8 billion in supplemental TIF revenues alongside its existing substantial share of property taxes.

The budget introduces several new taxes, such as a modified business “head tax,” higher taxes on cloud-based services, a per-user tax on social media companies, and a new tax on motor vehicle traffic. Critics argue that these measures could discourage job creation and investment in the city. "There is nothing 'progressive' about taxing employers for hiring people or penalizing residents who rely on computers for work and everyday life," the statement reads.

While Johnson has stated there will be no increase in city property taxes, the Board of Education approved a $233 million property tax hike for CPS. In total, CPS property taxes have risen by $363 million over two years despite nearly $900 million in TIF surpluses.

The budget claims $200 million in spending cuts; however, critics describe these reductions as largely superficial since overall city spending has grown from $9.7 billion in 2019 to $16.6 billion projected for FY 2026—a 70 percent increase over seven years. The police department faces a cut of $92 million under this plan.

Pension funding is also affected by the proposal; Johnson's plan reduces pension contributions by $140 million even as fire and police pensions approach insolvency and recent legislative changes are expected to add significant liabilities.

To cover retroactive pay increases for firefighters and paramedics, the budget relies on borrowing—issuing $166 million in debt—a practice previously criticized as fiscally irresponsible.

Johnson’s budget earmarks revenue from new taxes for targeted programs but continues much of the current spending on violence intervention and youth recreation programs rather than expanding them significantly. On community mental health clinics and youth employment initiatives, progress remains limited compared to previous promises.

Affordable housing remains another challenge: while Johnson often cites 10,000 affordable units as forthcoming, actual building permits issued remain low compared to other cities like Houston. Only 505 affordable units have resulted from recent subsidies out of more than $324 million spent.

The costs associated with supporting migrants have also been highlighted; between 2022 and 2025, Chicago spent nearly $300 million addressing migrant needs with state support pushing totals above $600 million during a period when many neighborhoods lack investments in basic services.

Chicago Teachers Union (CTU), an ally of Mayor Johnson’s administration according to critics’ analysis, stands out as benefiting most from this budget through significant allocations directed at CPS staffing despite ongoing debates about educational standards and resource allocation within schools.

In public remarks related to fiscal challenges facing Chicago government operations moving forward into next year’s cycle: "This budget does nothing — absolutely nothing — to stop Chicago’s downward spiral," says one assessment included in critiques of the mayor’s plan.

The statement concludes by asserting that longstanding financial practices—not federal funding changes—are responsible for current fiscal pressures facing Chicago residents.