Mayor Johnson's 2026 Budget Proposal: Prioritizing Chicago's Services and Residents

Strategic Insights -

The Mayor's 2026 budget proposal addresses the budget deficit without new property taxes or regressive fees, implementing new taxes on large corporations, Big Tech companies, and the ultra-rich to protect Chicago's services and residents. The Protecting Chicago Budget prioritizes protecting the city's services through savings and cost reductions, protecting its programs by taxing large corporations and Big Tech, and protecting its people through increased investments and resources for vulnerable Chicagoans.

Key Takeaways:

  • The budget achieves more than $200 million in cost reductions through strategic reforms targeting redundancies and inefficiency, including a hiring freeze, consolidation of real estate assets, contract reductions, and measures to rightsize and reduce overtime expenses.
  • The City will use the largest Tax Increment Financing (TIF) surplus in its history, totaling more than $1 billion, to support operations at Chicago Public Libraries and provide critical financial relief to taxing districts across Cook County.
  • Mayor Johnson's proposal balances the budget without imposing any new fees or regressive taxes on ordinary Chicagoans, protecting them from fees that increase the cost-of-living while avoiding taxes that place additional financial strain on working people.
  • The budget implements new taxes and fees on the wealthiest Chicagoans and the largest corporations, including a 'Yacht Tax', an increase in the 'Vacant Building Fee', and taxes on Big Tech companies.
  • The Protecting Chicago budget establishes two new, innovative special revenue funds to fund mental health services and community safety programs, including an amusement tax fee on social media companies to fund free mental health clinics and mental health crisis response teams.
  • The budget creates a new $100M Community Safety Fund to increase funding for youth diversion and employment programs, services for survivors of domestic violence and gender-based violence, mental health support for first responders, and community violence intervention programs.
  • The Protecting Chicago Budget strategically invests in resources and programs that protect Chicagoans' Constitutional rights and mitigate the disruption posed by Trump administration cuts to essential programs, including increased investment into the Department of Law's Affirmative Litigation division and funding for programs that support unhoused residents, returning residents, and vulnerable communities.

Statistics:

  • The budget proposes an amusement tax fee on social media companies to fund free mental health clinics and mental health crisis response teams, generating a projected $31M.
  • The budget creates a new $100M Community Safety Fund to increase funding for youth diversion and employment programs, services for survivors of domestic violence and gender-based violence, mental health support for first responders, and community violence intervention programs.
  • The budget secures guaranteed funding for proven community safety initiatives through a Community Safety Surcharge, to be paid by the top 3% of large corporations operating in Chicago with more than 100 employees.
  • The City will use the largest Tax Increment Financing (TIF) surplus in its history, totaling more than $1 billion, to support operations at Chicago Public Libraries and provide critical financial relief to taxing districts across Cook County.
  • The budget increases investment into the Department of Law's Affirmative Litigation division by $5M and funding for programs that support unhoused residents, returning residents, and vulnerable communities.

Sources:

  • Mayor Brandon Johnson's 2026 budget proposal
  • The Chicago Financial Futures Task Force report
  • The analysis conducted by the Office of Budget and Management (OBM) and EY
  • The Surgeon General's Advisory on social media usage and its negative mental health impacts on youth
  • The City of Chicago's Department of Environment
  • The Office of Reentry, community Re-Entry Centers, and re-entry job training programs tied to the Cannabis Excise Tax
  • The City's Rapid Rehousing program
  • The Office of Budget and Management (OBM)
  • The City's Department of Law's Affirmative Litigation division
  • The Chicago Public Library
  • The Chicago Park District
  • The City Colleges of Chicago