Chicago Mayor Brandon Johnson has introduced a proposed $17.6-billion budget for 2027 that relies on new and expanded taxes to close an $882.4-million shortfall while avoiding layoffs and reductions to what his administration calls critical services.
Johnson presented the plan to Chicago City Council on Wednesday, October 21, 2026.
The proposal still requires council review and approval before it can take effect.
Table of Contents
What the Chicago budget proposal includes
The plan, branded by the mayor’s office as the “Fair Share Budget,” is designed to close the city’s projected gap through additional revenue, borrowing and changes to existing programs.
Among the most notable measures is a renewed employer tax aimed at larger companies.
The proposal refers to the measure as the Equitable Employer Tax and would charge qualifying businesses based on their workforce.
The measure is similar to a corporate head tax the mayor proposed during the previous budget cycle.
City budget materials project that it could generate more than $100 million, although its passage is likely to face opposition from some alderpersons and business groups.
The budget also proposes raising Chicago’s personal property lease tax from 15 per cent to 20 per cent, while keeping vehicle leases subject to the existing 15-per-cent rate.
Another proposed measure would impose a 15-cent tax on certain non-food and non-medical packages.
The administration says the packaging charge could raise about $9 million while encouraging businesses and consumers to reduce disposable waste.
The city is also counting on revenue from its existing Social Media Amusement and Responsibility Tax, known as SMART.
The mayor’s office says the tax is expected to generate approximately $49 million in 2027.
Services and staffing
Johnson’s office says the Chicago budget proposal would maintain city services without layoffs.
It also highlights spending on community violence intervention, mental-health services, youth programs, homelessness support and public libraries.
The proposal calls for an expansion of the Smart Streets traffic-enforcement program to all wards in 2027.
The system uses cameras mounted on city vehicles and Chicago Transit Authority buses to identify vehicles stopped or parked in bus lanes, bike lanes and bus stops.
The mayor’s office says data from the pilot found that 82 per cent of drivers who received one or two warnings or fines did not repeat the violation.
Police spending remains one of the largest components of the city’s finances.
An independent review of the proposed budget found that the Chicago Police Department would receive about $2.2 billion in appropriations, making it the city’s largest departmental budget.
The police allocation is higher than the previous year’s appropriation, even as the administration describes parts of its broader staffing plan as a transition from sworn positions to civilian roles.
Why Chicago faces a large shortfall
The projected $882.4-million gap reflects rising pension and debt costs, reduced flexibility in local revenues and obligations connected to police misconduct settlements.
Chicago’s financial pressures have intensified as pandemic-era federal support has faded.
The city must also manage long-term pension commitments and increased debt-service costs while continuing to fund public safety, transportation and social programs.
The proposed budget contains approximately $19.6 billion in total appropriations.
After transfers between funds and other adjustments, the city’s operating budget is roughly $17.6 billion.
Budget analysts said the overall appropriations figure represents an increase of about 5.1 per cent from the previous year’s plan.
What happens next
The proposal is not yet law.
Chicago City Council committees will examine the spending plan, revenue ordinance, tax levy, borrowing authority and related measures during a series of public hearings.
The Office of the City Clerk has posted the fiscal 2027 budget recommendations and accompanying ordinances, including the revenue, tax-levy and general-obligation borrowing documents.
Alders may seek changes to the tax proposals, departmental allocations and borrowing plans before the council votes on the final package.
The employer tax is expected to be among the most politically difficult elements because a similar proposal was rejected during the previous budget process.
The mayor’s administration argues that large corporations should contribute more to the services and infrastructure that support their operations.
Opponents are expected to argue that additional taxes could increase business costs, discourage investment or place pressure on employers during a period of economic uncertainty.
For Chicago residents, the final outcome will determine whether the city adopts higher charges on businesses and leased property, expands traffic enforcement and preserves the proposed funding increases for community and public-safety programs.
Chicago budget proposal at a glance
| Item | Proposal |
|---|---|
| Operating budget | Approximately $17.6 billion |
| Total appropriations | Approximately $19.6 billion |
| Projected gap | $882.4 million |
| Packaging tax | 15 cents on qualifying packages |
| Personal property lease tax | Increase from 15 per cent to 20 per cent, excluding vehicle leases |
| City Council status | Under review; not yet approved |
Frequently Asked Questions
How large is Chicago’s proposed 2027 budget?
The proposal contains approximately $19.6 billion in total appropriations and represents an operating budget of roughly $17.6 billion after fund transfers and related adjustments.
How large is Chicago’s projected budget gap?
The city is seeking to close an estimated $882.4-million shortfall for 2027.
What new taxes are included in the proposal?
The plan includes a renewed employer tax, a higher personal property lease tax and a 15-cent charge on certain non-food and non-medical packages.
Has Chicago City Council approved the budget?
No. The proposal must go through committee hearings, possible amendments and a final council vote.
Would the proposal affect city services?
The mayor’s office says it would avoid layoffs and protect funding for services including public libraries, mental-health programs, youth initiatives and violence intervention.
Fact-Checked: Key figures, proposed measures and the approval process were checked against the City of Chicago mayor’s office and Chicago City Clerk’s official 2027 budget materials, with budget details cross-checked against an independent budget analysis. ([chicago.gov](https://chicago.gov/city/en/depts/mayor/press_room/press_releases/2026/october/fair-share-budget.html?utm_source=openai))
Disclaimer: The proposed taxes, spending levels and program allocations could change during Chicago City Council review and are not final until formally approved.