Johnson introduced the proposal Wednesday, Oct. 21, saying it would help address an estimated $882 million shortfall while supporting services including pothole repairs, libraries and violence prevention. His administration estimates the tax, which Johnson calls an “equitable employer tax,” would bring in $101 million annually and apply to fewer than 3% of Chicago businesses.

Businesses with employees working in designated socioeconomically disadvantaged areas could receive credits covering the charge for those workers.

The proposal faces substantial opposition at City Hall. Twenty-nine aldermen in the City Council Budget Accountability Coalition told Johnson last month they would not support a head tax or other levies they consider taxes on job growth. The group has also opposed property tax increases and relying on state revenue that has not been approved.

The mayor proposed versions of a corporate head tax in his 2026 budget, first seeking $21 per employee monthly from companies with more than 100 employees, then revising the plan to $33 per employee at companies with more than 500. The council rejected the proposal, and the coalition advanced an alternative budget. There is no indication that support for the tax among aldermen has since increased.

Johnson’s budget includes other proposed revenue measures. A 15-cent packaging-waste tax, modeled on the city’s bag tax, is projected to raise $9 million. He also wants to increase the tax on sports betting companies from 10.25% to 20%, which the administration estimates would generate $37 million. That tax is being challenged in court, with opponents arguing that only the state can impose it.

The plan would raise the personal property lease tax from 15% to 20%, while keeping the rate on car leases at 15% and reducing it to 11% for film-production equipment leases. The administration estimates those changes would produce $234 million. Expanding the Smart Streets camera program citywide is projected to generate another $18 million in parking-ticket revenue by targeting vehicles blocking bus lanes, bike lanes and crosswalks.

The proposal also includes the city’s required $2.97 billion pension contribution and an additional $364 million payment. Johnson’s team plans to declare a $520 million surplus in tax-increment-financing revenue; about $100 million would remain with the city, while $285 million would go to Chicago Public Schools and the remainder to other local government bodies. The budget team is also proposing a $480 million loan to pay police misconduct claims sooner, saying it could reduce legal costs.

Acting Budget Director Jonathan Ernst said staff reviewed department budgets line by line and sought savings without harming city services. The City Council Budget Committee is scheduled to question departments about the proposal over the next three weeks. Aldermen must approve a 2027 budget by the end of the year.