Johnson’s proposed “Equitable Employer Tax” would charge businesses with more than 125 employees $25 per worker each month, generating an estimated $101 million annually. The mayor’s office says about 2.8% of registered corporations would be subject to it. Employers at worksites in designated socio-economically disadvantaged census tracts could apply for a full rebate.

The proposal revives a levy rejected during last year’s budget fight. In a letter to Johnson last month, 29 alderpersons called for no property tax increase, no head tax or tax on job growth, and no reliance on state money that has not been approved. Johnson’s plan freezes property taxes and does not count on unapproved state aid, but it breaks the group’s opposition to a head tax.

Johnson said working people are being pushed out of Chicago and argued that the city should protect families facing rising costs for essentials. He has said corporations should contribute more toward city needs. Finance Committee Chair Pat Dowell, who called the head tax a “non-starter” last year, has again rejected it.

The proposal also calls for raising the personal property lease transaction tax from 15% to 20%, an increase expected to generate $234 million in 2027. The tax applies to leased property, software and cloud services. The rate on vehicle leases would stay at 15%, while the rate for film and television productions would fall to 11% from 15%.

Johnson said the changes are aimed at large, fast-growing technology companies, while maintaining lower rates for vehicle leasing and local film production. Dowell has also objected to raising the lease transaction tax, saying the city should not add a burden to the industry.

The mayor’s budget would increase the sports betting tax from 10.25% to 20%, with projected annual revenue of about $37 million. That money is uncertain: major sportsbooks, including FanDuel and DraftKings, are challenging the city’s authority to tax and regulate online betting. Johnson said the increase would apply to companies, not directly to Chicago residents placing bets.

For schools, Johnson proposes a $520 million TIF surplus, with 55%—$286 million—going to CPS. The allocation would reduce the district’s assumed need for additional state funding to about $110 million. Without that money, CPS could face midyear cuts, furloughs or layoffs.

The plan also sets aside $360 million for an advance pension payment in addition to the $2.79 billion required by law. Last year, the mayor’s attempt to reduce the advance was reversed after opposition from City Council members.

Johnson’s budget would borrow $480 million over two years to cover a recently authorized $260.8 million settlement for 17 people framed for murders by former Chicago police Detective Reynaldo Guevara, along with other police-related settlements. A senior mayoral adviser described the costs as obligations stemming from past harms, rather than recurring expenses.

Johnson is expected to present his budget message to the City Council on Oct. 21, followed by two weeks of hearings. If alderpersons again reject the head tax, the mayor has not named a specific fallback, saying he would review other revenue options. The proposals will test whether his administration can secure new business-related taxes while financing schools and city services amid a large budget shortfall.