Chicago Mayor Brandon Johnson’s 2026 budget proposal includes a per user tax on social media and a surcharge on businesses. The proposal does not include a property tax hike and supports the elimination of the grocery tax.
During his 2026 budget address, Mayor Brandon Johnson’s proposed “Protecting Chicago” budget leaned heavily on tax hikes targeting the city’s largest employers and technology while avoiding a property tax hike.
The mayor’s biggest revenue ideas include:
The Personal Property Lease Tax hike would affect anyone using AI platforms such as ChatGPT.
The mayor’s budget does not include a property tax hike or a grocery tax. Chicago was already granted a reprieve from the grocery tax for at least six months in 2026 because the city council missed a key deadline to reinstate it, but Johnson’s proposal suggests the grocery tax will be permanently eliminated. The mayor also wants to reduce the Motor Vehicle Lessor Tax from $2.75 to $0.50 for each rental period.
The budget includes some cost-savings measures such as:
- Hiring freeze across city departments.
- Contract reductions with vendors, saving an estimated $10 million.
- Merging of city offices and selling of vacant spaces.
- Reducing overtime costs for the Chicago Police Department.
Instead of confronting ballooning pension costs, runaway personnel spending or bloated bureaucracy, Johnson’s budget avoids meaningful reform. His projected $200 million in “savings” comes mostly from temporary measures like hiring freezes and contract cuts not long-term efficiencies.
Pension obligations, the city’s single biggest fiscal threat, remain unaddressed. The city has more pension debt than 44 states. To fix this long-term problem, the mayor needs to address rising pension liabilities. His budget fails to do this.
Taxes that may be framed as targeting the “ultra-rich” could push more businesses to leave the city or avoid investing here altogether, worsening the city’s long-term revenue outlook.
Johnson also relies on a $1 billion Tax Increment Financing surplus, the largest in city history. Without structural fixes, budget issues will pressure taxpayers again in future years.
The mayor’s new programs, like the $100 million Community Safety Fund and plans for expanded mental health services, may sound well-intentioned, but they lack clear accountability and are funded with unstable, politically targeted revenues.
Chicago doesn’t need more tax hikes or symbolic gestures. The city needs structural fiscal reform, smarter spending and a tax climate that supports job growth.
