Aldermen voted 50-0 on the hike, which was meant to help close a budget gap.
"A devastating loss for Mayor Johnson. I've been here, you know, going on 17 years. I've never seen this kind of vote take place. And I think in many of our lifetimes, we've never seen this. So it sends a message that that massive property tax increase he was looking for, it's not going to happen," 32nd Ward Ald. Scott Waguespack said.
City Council did not address what they would do to close the gap without the property tax hike.
"Now the question for us as a Council is: How are we going to balance that budget? So we said no to a property tax increase at the level $300 million. Well, what are we for? And that's the conversation that we need to be having in this moment," 35th Ward Ald. Carlos Ramirez Rosa said.
The special meeting was organized after 29 aldermen signed a letter opposing Johnson's proposed $300 million property tax hike.
The mayor said it was needed to help avoid layoffs, furloughs and cuts to other programs.
Many aldermen said they were against the property tax hike.
The mayor had hoped to come to some sort of agreement Thursday with City Council members.
What happens if City Council fails to agree on a budget?
Aldermanic sources said behind-the-scenes negotiations could result in the tax hike being reduced - to as low as $100 million.
The mayor has not confirmed any figures, but, during a briefing on Tuesday, said he's open to lowering it.
Mayor Johnson said he wants to avoid layoffs and furloughs, or cuts in youth employment that "invest in people."
With homeowners from all parts of the city worried about their recent reassessments increasing their property taxes, an expected hike coming from the Chicago Public School and now more being requested by Johnson, council members were feeling the pressure to do something.
Sixth Ward Alderman William Hall said they've been working non-stop the past 72 hours behind closed doors to try to amend the mayor's proposal.
He said Thursday was a chance for council members to check in.
"This is merely a check-in meeting," Alderman Hall said. "We're not voting on the budget that was presented a few weeks ago. It's not ready because we haven't even heard from every department. So Chicago can calm down. We are still working, and I'm confident we'll get there. By the end of the year? Absolutely, I don't see us having a government shutdown. I don't see us breaking the backs of Chicagoans, and I don't see us not working together."
Alderman Hall admitted this mayor is doing things differently, where some say these negotiations should have taken place long before the mayor proposed his budget.
But Hall's confident they'll come to an agreement soon.
He said if it takes until Dec. 31, they'll work until the very last day.
But, the mayor still refuses to lay out what his Plan B is going to be regarding any smaller property tax hike.
"I've always said from the very beginning we can negotiate the details of these dynamics, and that's essentially what this process is. It gives the people of Chicago an opportunity to experience what democracy should have looked like for decades, right?" Johnson said Thursday.
Earlier this week Johnson suggested his call for raising property taxes was a bluff, to get people's attention. He rejected the notion the vote Thursday, in essence, put him in a weakened position.
"Listen, weakness is when we don't hold to our values. That's weak. Weak is when you don't tell people the truth, that's weak. This is a show of strength. We are always better when we're working together, right?" Johnson said.
Also on Thursday, 32 aldermen will file an amendment to include gunshot detection technology in the 2025 budget.
The proposal is $15.8 million for gunshot detection technology.
ShotSpotter is set to be fully disabled Nov. 22.