Chicago Mayor Brandon Johnson’s $16.6 billion 2026 budget proposal won early praise from progressives and disdain from business interests when he unveiled it last week.

While he framed his pitch as the city withstanding the financial impact of President Donald Trump’s term while avoiding hits to middle-class taxpayers, it pushes off more lasting fiscal reforms that could save future taxpayers money, budget watchdogs say.

Though it’s likely to go through several tweaks in the weeks to come as Johnson runs a gantlet of aldermanic counter-proposals, here’s a look at his budget by the numbers.

New or improved taxes, hits to others

Johnson wants to close a significant part of city’s $1.19 billion 2026 deficit with “revenue enhancements.”

The largest is a 3 percentage point increase to the city’s existing tax on cloud-based computer services. Though the mayor framed the tax as one on big tech, the tax isn’t due by the companies themselves.

“It’ll get passed along to every small business that uses cloud computing, that uses offsite data servers, all the streaming stuff,” said Justin Marlowe, director of the Center for Municipal Finance at the University of Chicago. “I think a lot of this framing will be cut through pretty quickly.”

In all, the city is counting on $1.1 billion in “personal property lease transaction” taxes with the increase. That’s up from a little over $800 million this year.

It’s a more sustainable solution than many alternatives, Marlowe said, and is ahead of the curve compared to many other cities that haven’t caught up with charges on digital services.

The mayor’s proposed $21-per-employee head tax, which Johnson’s team estimates would bring in $100 million next year, might be less sustainable, Marlowe warned, since companies can encourage workers to spend more time working from home or move them to suburban offices.

Johnson plans to dedicate that money to a “community safety fund,” including about $54 million to youth employment and intervention programs; $3.6 million to wellness programs for police officers; and $35 million to violence reduction, street outreach and grants to outside organizations. Another $6 million would go to victim support and just under $1 million would help staff the mayor’s office of community safety.

Johnson’s planned social media tax — charging 50 cents a month to Facebook, X and other platforms for each active user in Chicago over 100,000 — was met with some fears about whether it would withstand an almost certain legal challenge by the country’s top tech firms. It would be charged as an “amusement” tax, and bring the city’s total amusement tax revenues up to $303 million next year.

Johnson’s plan to increase certain ride-share charges would start in April, adding a second “congestion” zone where riders will have to pay more while also charging a rate based on distance instead of a flat fee. City ride-share charges have helped boost the city’s “ground transportation tax” revenues from $17 million in 2015 to $230 million this year.

There are other one-time revenues in the budget — including rejiggering the city’s properties by canceling unnecessary leases. The city expects to raise $31.7 million more from the sale or lease of city-owned land, “driven by higher anticipated revenues from the City’s advertising contract,” according to the city’s budget overview.

Another big TIF surplus, pension advance retreat

Johnson has already joined predecessors Rahm Emanuel and Lori Lightfoot in balancing city budgets by sweeping money out of special taxing districts, so-called TIF surpluses.

But this year, Johnson’s sweep is unique in its scope: He plans to tap roughly a third of the total balance left in all of the city’s TIF accounts at the end of 2024.

“That is a revenue source that will always be there, but very, very unlikely to be there with the size of the numbers that they’ve been able to depend on over the last several cycles,” Marlowe warned.

The move throws a key lifeline to both the city and Chicago Public Schools, yielding an estimated $232.6 million for the city next year. CPS would bring in about $522 million. The Chicago Public Library would receive an additional $19 million.

Johnson’s TIF proposal was applauded by both the Chicago Teachers Union and many progressive aldermen keen to see what have long been considered City Hall slush funds be put to better use.

But other aldermen fretted Wednesday about the fate of certain projects in their wards that count on TIF money. Even Budget Chairman Jason Ervin, who generally supported Johnson’s budget plan, said he was worried the city would miss out on opportunities to grow its tax base by using the property tax money in TIF districts to spur development as the program originally envisioned.

“When I think about the Midwest TIF on the West Side of Chicago, when I think about some of the things that we’ve done in the Northwest TIF, to have to delay those types of things for other communities that are not putting in their total share, in my opinion, is having the residents of the South and West sides ultimately have to bail out CPS when other communities are not having to pay that burden,” he said.

Jill Jaworski, the city’s chief financial officer, said officials had done “an extensive vetting” of TIF projects on the docket and removed ones “that have not moved forward, that do not appear to be moving forward. We did not remove any active projects, all the projects that are in engineering, in construction that are actively moving forward all remain in the TIF.”

That means major housing projects downtown being funded by the massive LaSalle Central district are untouched.

Johnson’s decision to pull back on the city’s planned extra payments to its pension funds also drew some rebukes from organized labor and watchdogs. The city had originally planned to put a combined $260 million extra into the city’s four funds, but instead proposed $120 million. The total pension payment is a budgeted $2.76 billion — a whopping figure, but lower than last year’s $2.9 billion payment.

Skipping it now is especially troubling, the Civic Committee’s Mary Wagoner said, because of the new burden of a recent bill granting more benefits to certain police and firefighter retirees, “which adds about $11 billion to the funds’ liabilities.”

The payments mattered before — because they kept the funds from going underwater — “but they really matter now,” Wagoner said.

The Johnson administration hoped by now that revenues from the city casino would help fill the gap, but the Bally’s in River North is only projected to generate about $45 million for pension payments, according to the city’s budget overview.

City budgets for fewer employees overall, but more in Department of Environment

Budget officials say the current hiring freeze will stay in place next year, another one-time fix that is expected to save about $50 million. In all, the city’s budgeted headcount dipped slightly from 36,206 to 35,760. The biggest decreases were in grant and federal pandemic dollar positions, hitting the Department of Public Health hardest.

The Department of Environment was one of few departments to see a major boost. It gained 65 FTEs, or “full time equivalents,” in Johnson’s proposal. Restored under Johnson, the department is slated to take over environmental regulations and permitting across the city.

The Police Department, the city’s biggest, saw its FTE count decrease only slightly, from 13,807 to 13,793.

There are 282 fewer budgeted FTEs at CDPH compared with last year, according to the city’s budget overview, bringing the budgeted number to 764. That’s in large part because pandemic-related funding across all departments dropped from $666 million to $164 million in 2026, according to the city’s budget overview.

The Department of Housing is also seeing its so-called housing “entitlement funding” that built up during the pandemic dwindle by $32 million, but its budgeted headcount is roughly the same as last year.

Anders Lindall, spokesman for AFSCME, which represents thousands of city workers, foreshadowed the difficulty Johnson will face with his overall plan, saying the union was grateful the mayor didn’t cut pay or city services, but “we can’t forget that more than 70 layoffs have already been announced in the city public health department alone due to loss of federal grants.”

“This proposal doesn’t include the revenue needed to prevent those layoffs and the erosion of the services those employees provide, such as epidemiologists who protect city residents from disease outbreaks and staff who vaccinate kids in schools,” Lindall said. “We’ll be asking alders to revisit that.”

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