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(Bloomberg) — Chicago’s City Council passed a nearly $16 billion budget for 2026 — less than two weeks before the deadline — without certainty about whether Mayor Brandon Johnson will sign or veto the plan.
The council on Saturday voted on the appropriations and management ordinances needed to approve a spending plan that would plug a nearly $1.2 billion shortfall in the third-largest U.S. city’s main operating account, known as the corporate fund.
The votes ended a contentious budget process between the Johnson administration and a group of aldermen who disagreed with his budget proposal, which also included a so-called head tax that would charge large employers a monthly fee for each employee. The head tax was not included in the revenue ordinance passed by the city council.
On Friday, the council approved a revenue ordinance that authorizes higher taxes on cloud computing and shopping bags, as well as more debt collection to fund the city’s annual spending plan. The package developed by aldermen also calls for higher supplemental pension payments than the mayor’s proposal.
Johnson said Friday that he had not decided whether he would sign the budget, given his concerns about selling a portion of the debt collection and overall revenue projections.
While Johnson’s proposed budget included more debt collection through internal efforts, the mayor is concerned that selling the debt to an outside entity could lead to aggressive collection practices against poor residents. He and his team also expressed concern that the revenue projections in the aldermen’s proposal may be too optimistic and could lead to mid-year cuts.
The city is required to enact a budget by the end of the year to avoid a local government shutdown. Johnson reiterated his concerns about the alternative budget proposal during Saturday’s City Council meeting but did not indicate whether he planned to sign or veto it.
“Chicago’s City Council today passed its most tightly contested budget in years. The process marked a major shift in Chicago’s legislative norms,” the watchdog Better Government Association said in a statement Saturday. “It remains to be seen whether the mayor will veto the council’s counterproposal, but it is a far cry from the many years in which mayors’ motions passed on almost unopposed votes.”
Aldermen and the Johnson administration have been negotiating for weeks after the Finance Committee rejected Johnson’s revenue proposals last month.
The first-term progressive Democratic mayor faces tough choices. Johnson has long supported the need to give a greater share of Chicago’s tax revenues to the city’s wealthiest to ease the burden on poor and minority residents.
Other concerns include Chicago’s borrowing costs and a ratings trajectory that has turned negative, a reversal after a surge in recent years that helped Chicago cut its rating from Moody’s Ratings to a junk rating in late 2022.
“We wanted to pass a budget that better addresses the concerns raised by credit rating providers to help avoid downgrades,” Alderperson Samantha Nugent said in a statement after the vote. “The question now is, will the mayor veto this budget and bring this city to the brink of shutdown?”
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