Mayor proposes property tax increase to close budget gap, breaking key campaign promise

CITY HALL — As a candidate for mayor, Brandon Johnson has repeatedly promised that he would not raise property taxes during his first term.

“I will not raise property taxes. I’m the only person in this race who has committed to doing that,” he said during a Block Club interview in March 2023. “In my first term, we are not raising property taxes.”

But faced with a series of difficult decisions about how to close the nearly $1 billion spending gap in 2025, current Mayor Brandon Johnson is breaking his promise.

According to the mayor's office, Johnson will propose raising the city's property tax in his budget address on Wednesday to bring in an additional $300 million a year. This will represent an estimated increase of 4 percent for property owners “on average,” based on estimated values ​​for 2023, a spokesman for the mayor said.

Johnson's budget proposal also eliminates more than 700 currently unfilled full-time jobs in the city. In addition to the tax increase, it relies on a mix of new revenue, a surplus of tax increment financing and “operational efficiencies” in city departments, among other things.

The mayor’s budget is also based on a “record” TIF surplus of $570 million. That will send $131 million to the city, about $300 million to the Chicago Public Schools, and the rest will be split between taxing entities like the Chicago Park District, the City Colleges and others.

Johnson's budget recommendations will now be reviewed by councilors in a series of department meetings over the next few weeks. The City Council must pass a balanced budget by the end of the year, as required by state law – a process that could become a political battle as more city councilors publicly distance themselves from the city over the recent unrest at Chicago Public Schools and other issues Distance mayor.

During a briefing Tuesday, Johnson and his finance team defended the proposed property tax increase, saying it was preferable to mass layoffs in police, fire and other key areas such as facilities and sanitation.

“Given the choice between laying off police officers and firefighters and ensuring that we don't have to have layoffs, that has been a very agonizing process, but I recognize in this moment that the alternative is simply not acceptable: reducing services and impacting the Overall safety,” Johnson said.

City officials this summer projected a 2025 budget gap of $982.4 million in the enterprise fund — the city's main operating fund — more than $400 million more than last year's estimated deficit.

This estimate resulted in an expected decrease in city revenues, including from the state-distributed personal property replacement tax, as well as increased labor costs and other cost increases.

Also factored into the budget shortfall was a $175 million pension payment for CPS's non-teaching staff, which the city has shifted to the district's jurisdiction in recent years.

But CPS did not include the $175 million in its own budget passed this summer, sparking a political dispute between Johnson and CPS CEO Pedro Martinez, who said he rejected the mayor's proposal to take out a high-interest loan, to make ends meet.

That refusal could result in Martinez being fired by Johnson's new, hand-picked school board. During Tuesday's briefing, Johnson said he was confident the city would ultimately receive the pension payment – but he did not elaborate.

“We'll get it done. We’ll get there,” Johnson said. “We will have an intergovernmental agreement.”

The 2025 budget forecast also included $150 million in spending for the city's New Arrivals Mission, which has set up shelters and provided services for thousands of migrants who have arrived in Chicago over the past two years.

But as the number of migrant shelters declines, due in large part to President Joe Biden's severe restrictions on the entry of asylum seekers across the southern border, the city plans to upgrade the emergency shelter system to the city's existing system by the end of the year Consolidate homeless people.

According to budget documents, Johnson's budget proposal includes $40 million for this initiative and an additional $29 million to help unhoused families move into “stable housing.”

Budget officials on Tuesday also announced additional city “investments” in next year's budget, including $15 million for community violence intervention programs, $52 million to hire an additional 2,000 people through the city's youth hiring program city ​​and $2 million for “capacity expansion” at three psychiatric health clinics that the Johnson administration opened this year.

But resistance to Johnson's budget proposal is already growing.

On Tuesday, 14 city council members — most of them frequent critics of the mayor — sent Johnson a public letter calling on the city to avoid a property tax, renew the ShotSpotter contract and create a new police district on the Southwest Side and a satellite office on the West Town to set up.

“We and our voters stand firmly behind these demands. We urge you to consider these points as we work together to finalize a 2025 budget for the City of Chicago,” the letter reads.

But despite the political headwinds, Johnson expressed confidence Tuesday that the city council will support his spending vision.

“That is their job. I will present this budget. The city council’s job is to pass it,” he said. “The people of Chicago expect me to continue investing in people, and this budget does just that.”

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