Mayor Johnson considering corporate head tax to help balance Chicago budget

CHICAGO (WLS) -- Mayor Brandon Johnson revealed some of the progressive revenue ideas he is considering to help balance the budget without raising property taxes on Tuesday.

The mayor is facing a budget deficit of over $1 billion, and he has ruled out raising property taxes.

ABC7 Chicago is now streaming 24/7. Click here to watch

Until Tuesday, he has avoided specifying how he might raise the revenue needed. But some progressive ideas that he now concedes are on the table could face considerable pushback.

Johnson is looking to the business community as a source of revenue to help the city address its massive projected budget shortfall.

Johnson conceded on Tuesday that he is considering a corporate head tax as a way to raise unspecified revenue, an avenue he has not pursued in his first two years in office.

"And so now we're in a position where people are very clear about the deficit that we projected two years ago, and I just hope that city council recognizes the unique moment that we're in as a city to do something that has not been done before," Johnson said.

SEE ALSO | Mayor Brandon Johnson says 'progressive revenue' will be used to fill budget gap

The mayor is also looking into a possible corporate income tax and taxing social media and digital advertising.

"And in order to live up to the expectation people of the world have of being that premier city, our corporate partners will have to do more," Johnson said.

The mayor's ideas are landing like a thud with business leaders.

"The best long-term strategy to address budget deficits is growth. We need pro-growth strategies. These two taxes are direct deterrents on companies, locating here, staying here, creating jobs here," said Chicagoland Chamber of Commerce President and CEO Jack Lavin.

READ MORE | Mayor Johnson establishes group to address Chicago's budget gaps

Lavin says the mayor has to walk away from the idea that raising revenue is the answer to the budget problems.

"There must be efficiencies and shared sacrifice in there before we ask the taxpayers of Chicago and businesses in Chicago to pay more revenue," Lavin said.

The mayor's revenue ideas also include asking entities which do not pay property taxes, like universities and hospitals, to make voluntary payments in lieu of taxes, otherwise known as the PILOT payments, to help the city's finances. It is something the Illinois Health and Hospital Association strongly opposes.

The IHA issued a statement, saying, "IHA remains strongly opposed to any proposal to impose a new healthcare tax on Chicago's community hospitals. At a time when hospitals across the country are fighting to stay afloat-grappling with workforce shortages, inflationary pressures, and the lingering financial fallout from the pandemic-this is not the moment to add new burdens that threaten access to care. The recent federal Medicaid cuts signed into law will only deepen the financial strain on hospitals, particularly those serving low-income and underserved communities. PILOTs would be counterproductive, resulting in job losses across the region, redirecting money and resources away from patient care, and eroding critical healthcare services and programs designed to improve the health of Chicago residents."

In addition to corporate pushback, the idea of a corporate excise, or income tax, would require approval at the state level. And it is not clear if lawmakers would even consider that in time for the fall budget season.