Chicago Mayor Proposes $300 Annual Tax per Worker for Large Firms

Businesses in Chicago with at least 125 employees would pay a new monthly fee of $25 for each worker under Mayor Brandon Johnson’s proposed budget. The annual cost for a company with that minimum workforce would be $300 per employee. Johnson labels the measure the Equitable Employer Tax and intends to use the revenue to fund housing, homelessness services, youth employment, and violence reduction strategies.

The proposal has triggered a sharp disagreement between the mayor’s office and the City Council. Johnson told Fox Political Reporter Brandon Pope that aldermen who claimed his staff failed to contact them were being dishonest. The mayor’s office shared screenshots of calls and texts sent to Ald. Samantha Nugent (39th Ward) that appeared unanswered. Officials inside the mayor’s office also stated that Nugent told a representative to stop calling her office.

Nugent rejected the accusation of poor communication in an interview. She stated that the idea of the council being non-communicative is obscene and that staff see each other daily at City Hall. She said the council’s position is firm until the mayor returns with a responsible and thoughtful proposal.

Ald. Anthony Beale (9th Ward) argued that the criticism is misplaced. Beale said he has served for 28 years and has met with every mayor on substantive issues except Johnson. He challenged Johnson to look in the mirror before calling others dishonest. Beale and Nugent both identify the removal of the corporate head tax as a non-negotiable requirement for budget talks.

A group of 28 council members sent a letter to Johnson on Tuesday. The letter stated they will not support a budget that includes a tax on businesses. The group described the fee as a job killer that could drive companies out of the city. Beale said the council is willing to sit down and work with the mayor but insists that his executive role is to present a balanced budget while their role is to vote it up or down.

Johnson countered that passing the budget is the responsibility of the council. He said his job was to present a budget, which he has done, and that it is balanced and meets the demands of the public. The mayor appears confident in keeping the tax, citing recent election results where many residents supported taxing large corporations to fund social services.

In a non-binding referendum on the South and West sides, approximately 88 percent of voters said yes to the tax. The advisory measure appeared in the 5th, 8th, 21st, and 24th wards. All but the 21st Ward are led by aldermen who oppose the corporate head tax. Fox Chicago reached out to the four aldermen in those wards for comment but had not received a response as of this report.

Under the Illinois municipal code, the budget director prepares the budget and the mayor approves it. The council can revise the document and change items before final action, though it cannot appropriate more than the city's estimated available resources. If the city does not pass a budget by Dec. 31, a municipal government shutdown will occur. Essential services like police and fire would continue, but other municipal workers face uncertainty.

Johnson noted in his interview that he believes asking companies to contribute more is a reasonable expectation. He pointed to CPI proven strategies that drive violence down as a justification for the revenue. The council’s 28-member block says it does not want a repeat of last year’s process, where they submitted an alternative budget with mixed results.