Chicago’s budget for the 2026 fiscal year, enacted just before its Dec. 31st deadline, made history when it passed without the mayor’s support or approval. 

Mayor Brandon Johnson lacked the votes to pass his own proposal and was forced to accept a budget package that contained substantial amendments by Chicago’s city council. Johnson ultimately allowed the council’s revised version to pass without a veto, marking the first time in modern history that the city council passed a budget without the sitting mayor’s support. 

Despite the high-profile clash, the final package was still based heavily on the mayor’s initial budget proposal. A BGA Policy analysis of the budget as passed and the mayor’s initial proposal found more similarities than differences between the two. The council’s alternative budget concerned itself primarily with changes to revenue, leaving much of the mayor’s proposed spending plan intact.

All told, the final version of the budget worked out to a roughly 2% net increase in spending from the mayor’s proposal. Twenty-five of the city’s 39 departments and the non-departmental Finance General category saw at least some adjustment in appropriations — many very minor — while on the revenue side, 24 out of the city’s 103 itemized revenue sources were changed in the council-passed version of the budget. 

Not all changes were initiated by the city council, according to alderpersons involved in the drafting and the city’s budget office. As with every budget year, some administrative adjustments were made between the original proposal and the final version, meaning the council-authored changes affected an even smaller portion of the overall spending plan. 

Revenue Changes

Opposition to the mayor’s budget proposal centered around a proposed revival of the city’s corporate head tax, a per-employee fee levied on large employers that operate within city limits. 

From 1973 to 2014, Chicago levied a quarterly $4 per employee head tax on businesses with 50 or more employees. For 2026, Johnson initially proposed a monthly $21 per employee levy on businesses with 100 or more employees, projected to raise $100 million in revenue. Subsequent tweaks failed to garner enough support for passage, and the final budget ordinance passed without any form of corporate head tax. 

Eliminating that anticipated $100 million marked the largest revenue reduction between the mayor’s budget plan and the council’s version, followed by a $39.4 million loss in expected revenue from eliminating changes to the city’s rideshare and ground transportation tax. 

A planned hemp tax was also eliminated due to changes at the federal level, and a $2 million impact fee from the city’s first licensed casino was negated, per the city’s contract with casino operator Bally’s, by the council’s authorization of video gambling. 

All told, the council plan faced a net loss of $153.6 million in anticipated revenues relative to the mayor’s initial proposal.

Advance payments to the city’s four pension funds, which are treated as revenues for purposes of those funds, appear in the data as a revenue increase but are functionally a transfer from the city’s corporate account rather than external revenue. Setting aside the advance pension payments, the largest increase in estimated revenues incorporated into the council-passed budget was an additional $92.6 million in anticipated fines, forfeitures and penalties payments. 

The bulk of that extra revenue is based on the council’s authorized sale of uncollected city debt to private collectors. During budget and finance committee meetings, the city’s Office of Budget and Management cautioned that such a sale would be unprecedented, and that the city could not count on receiving the $89.6 million projected in the council plan, or even necessarily complete a sale within the 2026 budget year.

The final version of the budget also anticipates $31 million from a new application of the city’s amusement tax to social media companies. The initial revenue projections provided with the mayor’s budget recommendations did not include social media tax revenues as a standalone line item, but according to a statement from the city’s Office of Budget and Management the city anticipates collecting revenue from the social media tax, which will be captured by a new “Protecting CARE Fund” dedicated to mental and behavioral health initiatives. 

In addition to the new amusement tax, the council-passed budget also created new revenue streams from the licensing of video gambling machines within the city and the sale of advertising space on city property. 

Increases in existing revenue streams from raised levies on cloud and computing services and shopping bags, planned rentals and sales of city-owned property, and changes to the local liquor tax structure made up the rest of the difference between the council-passed plan and the mayor’s, with a total of roughly $281.3 million more in local revenues relative to the initial proposal. 

Appropriations Changes

All told, the council-passed plan made a net $317.8 million more in appropriations than the mayor’s proposal, with a net $287.1 million increase in local fund appropriations and the remaining increase in grant funds. 

The largest adjustments fell under the non-departmental Finance General category, which includes the city’s pension, benefits and debt service expenses, followed by the Chicago Fire Department, which received additional funding for backpay mandated by the recently-approved firefighters’ contract.

The bulk of the additional Finance General spend in the council-passed budget stems from increases in advance pension payments. 

Beginning in 2023 under then-mayor Lori Lightfoot and in every year since, the city has made advance pension payments above and beyond the mandatory minimums required by state law. Johnson’s 2026 plan reduced the advance payments by roughly half, a measure that the council plan reversed at a net additional cost of $278.9 million across the city’s four pension funds. 

The Finance General section of the council-passed budget also holds $31 million for a new “Protecting CARE Fund,” appropriated under the reserve balance category, which is used for funds not planned for expenditure within the budget year. If collected and held in the fund, those revenues would provide a starting balance for the new fund in future year budgets. Alderpersons involved in the drafting of the budget said that their team did not add or adjust the social media tax revenue or associated reserve balance appropriation; those changes were administrative adjustments made by the mayor’s budget office.

A lump sum for firefighter wage adjustments was moved out of the Finance General section and into the CFD budget, while an additional $8.8 million in “payment of term notes” represents increased public library spending. (The “term notes” categorization is a vestige of earlier budgets, in which the city used short-term loans to bridge the months between the start of the year and receipt of the library’s property tax levy; in recent years the city has covered the gap out of general funds to avoid additional interest charges.)

Other significant changes in appropriations outside of the Finance General section included:

• An additional $25.3 million for a grant-funded rehabilitation loan for the Congress Theater, under the Department of Planning and Development budget
  
• Roughly $18.7 million moved from Finance General and split between the Department of Public Health and Department of Family and Support Services budgets for violence reduction programming, along with small increases to domestic and gender-based violence aid and youth and mentoring programs.
  
• Special program costs funded by the cannabis fund moved from the mayor’s office budget to the CDPH and DFSS budgets
  
• An additional $3.8 million for salaries and wages on payroll for the Chicago Public Library, corresponding to an additional 72 positions and FTEs in the council-passed budget, and an additional $5 million in the materials and books budget. These changes restored cuts that the mayor’s budget proposal had made from the previous year, retaining the status quo rather than adding anything new in 2026.

Purely in terms of dollars and cents, the council-passed spending plan was fairly similar to the mayor’s. The additional $317.8 million in appropriations represents an increase of roughly 1.7% above and beyond Johnson’s originally proposed $18.4 billion; setting aside grants and comparing only local fund appropriations, the total rises to about 2%. 

Almost none of the appropriation changes in the final budget represent new programming or significant departures from the mayor’s overall plan for departmental spending. The bulk of the additional appropriations reverse cuts from 2025-level spending proposed in Johnson’s budget, with marginal staffing, salary and contracting changes making up most of the rest.

The Road to 2027

For all its political history-making, the budget that passed over Johnson’s objections was essentially a revision of his own proposal. The largest disputes — and the largest resulting changes to the budget — revolved around how the city’s operations would be funded, not what those operations would be. 

That reflects the reality of Chicago’s city council: independent on paper, and nominally the branch of government with final control over the pursestrings, the legislature still relies heavily on the mayor’s administration for budget data and analysis.

The city’s Office of Budget and Management, which prepares and presents the annual budget proposal, has 56 budgeted staff positions, while the Council Office of Financial Analysis, which supports the city council, has five. The relevant software and datasets are housed within the administration, although updates to the municipal code passed as part of the 2025 budget cycle attempted to clarify and expand COFA’s access to budget data. As a structural matter, the council still faces a long, uphill climb to anything like a from-scratch, independently drafted budget proposal, rather than modifications of the mayor’s recommendations. 

Politically, any further independent budgeting on the part of the city council likely relies on being able to tout wins from their 2026 foray into financial planning. If some or all of the new revenue streams enacted to replace the mayor’s corporate head tax fail to materialize, the council’s leading budget authors will have a much tougher sell the second time around, both to the public and to their colleagues. 

Depending on how the council-passed revenues and spending play out in 2026, the mayor could end up entering the 2027 budgeting cycle with a defiant “I told you so” narrative — or facing a newly empowered council flush with wins from charting their own course. 

Either way, the outcomes will reverberate beyond the plain dollars and cents of budgeting, and into broader questions of whose vision will shape the city for years to come.