Top mayoral aides on Monday began their defense of Mayor Brandon Johnson’s tax-heavy $17.6 billion budget and acknowledged they have no Plan B if, as expected, the failed corporate head tax is shot down again.
One year after a 31-member coalition of conservative and moderate alderpersons rejected the mayor’s corporate head tax, 29 alderpersons have vowed to do the same with Johnson’s newest attempt.
They will be joined by business leaders, who are also determined to block the third and biggest increase yet involving a Chicago tax on equipment rentals and cloud computing. The current tax already is the highest of its type in the nation.
Against that backdrop, Johnson’s finance team began trying to sell a tax-the-rich budget that includes $664.2 million in new and increased taxes and $119.8 million in spending cuts. The trimming is even less, given that up to $68 million of that spending is being shifted from the city’s corporate fund to enterprise funds.
“This budget is quote, unquote ‘balanced’ with more than $5 in new revenue for every one dollar saved,” said Ald. Brendan Reilly (42nd). “Why is the administration choosing taxing over managing its expenses?”
Acting Budget Financial Officer Ashlee Gabrysch, a former senior director and mid-central regional manager at Fitch, the Wall Street rating agency that in February dropped Chicago’s bond rating to three notches above junk.
“This budget repeats every one of those problems listed by Fitch ratings where you once worked,” Reilly said. “We have at least $155.6 million in one-time money, $480 million in new borrowing for settlements, (a) $882 million structural gap and a jobs tax that a majority of this City Council rejected once already.”
Ald. Anthony Beale (9th) demanded to know why the head tax was even presented to the Council “knowing you had 29 aldermen who wouldn’t support it.”
“What’s Plan B if the head tax doesn’t pass?” Beale asked Ernst.
“Work with the City Council.,” Ernst replied. “We presented you with our plan.”
Ald. Nicole Lee (11th), who helped lead last year’s unprecedented budget rebellion, homed in on Johnson’s proposal to raise by 33% the tax on equipment rentals,
Fran Spielman
Chicago Sun-TimesCity Hall reporter
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