A looming budget crisis in Chicago is setting the stage for a historic showdown between Mayor Brandon Johnson and the city council. The 2026 budget, recently approved by the council, faces the potential of a veto from Johnson over the absence of his preferred corporate “head tax.” Johnson labeled the council’s budget as “morally bankrupt,” showcasing a rift within the Democratic Party that may lead to unprecedented municipal consequences.
If Johnson proceeds with the veto, it would demand swift action from the city council to devise a new budget plan before a December 30 deadline. Failure to do so could result in Chicago’s first-ever municipal shutdown, plunging the city into turmoil. The dynamics are complicated further by the absence of Republican representation in the council, which consists of 48 Democrats and two independents. This shift indicates a significant internal struggle among factions on the left, with leaders like Ald. Gilbert Villegas advocating for attempts to override the mayor’s veto.
Chicago is grappling with a projected budget deficit of $1.2 billion for 2026. In response to fiscal challenges, Johnson has urged Chicago’s corporate sector to contribute more. He asserts that policies from the Trump era have favored big businesses to the detriment of working families, stating that corporations should “put more skin in the game.” However, the proposed head tax of $33 per employee has drawn sharp criticism, including from the state’s governor, JB Pritzker. Pritzker warned that it could disincentivize hiring, stating it would “penalize the very thing that we want, which is more employment.”
Moreover, tensions are rising as the media weighs in on the controversy. Johnson rebuffed a Washington Post editorial that criticized his approach, acknowledging that the paper “wouldn’t be the first time a publication got something I’ve done wrong.” This exchange illustrates Johnson’s defensiveness and determination amidst external pressures.
The council’s budget does include revenue-generating measures, such as legalized video gambling at various establishments, an increase in the shopping-bag tax, and a unique tax proposal aimed at social media companies. This tax, proposed at $0.50 per active user beyond 100,000 users, could bring in an estimated $31 million if passed. These added revenues are critical as the city attempts to balance economic needs with the demand for public services.
Historically, late-year budget vetoes in Chicago are not new. The city witnessed similar maneuvers during the administration of Harold Washington in the 1980s. Washington, noted for his assertive leadership style, vetoed multiple budgets, which often catalyzed urgent negotiations and adjustments. This historical narrative underscores Johnson’s current dilemma—one in which the stakes echo in the city’s political saga.
Support for Johnson’s approach comes from within the council, particularly from his ally Ald. Pat Dowell, who described the proposed budget as “not perfect but is a good budget and one we can work with.” This allyship highlights the varying perspectives among council members regarding how best to navigate the fiscal storm.
On the other hand, progressive voices within the council are rallying behind Johnson’s head tax proposal. Ald. Byron Sigcho-Lopez denounced the council’s budget as an “immoral, bankrupt, ‘Michael Sacks’ budget,” sharply directing criticism at billionaire financier Michael Sacks, a figure associated with controversial funding for political campaigns. This framing suggests that economic contributions from wealthy donors may be influencing the council’s priorities, adding another layer of complexity to the negotiations.
As tensions escalate within the Chicago city government, differing visions for the city’s future are more apparent than ever. The upcoming weeks will reveal if the council can present a budget that Johnson finds acceptable, or if Chicago will prepare for an unprecedented municipal crisis. With $1.2 billion hanging in the balance, the pressure is mounting, and the implications for residents are significant.
Chicago finds itself at a crossroads, and how Johnson and the city council navigate this financial storm will shape the landscape of municipal governance for years to come. A shutdown would not only be a novel development but could also serve as a critical moment in understanding the city’s political dynamics and priorities.
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