Chicago, IL – Chicago’s new 2026 budget is now in effect. Despite containing some wins for working-class forces in the city, the final budget was pushed through by corporate-backed alderpersons who succeeded in their primary goal: blocking the corporate tax increase proposed by the administration of Mayor Brandon Johnson.

Without such revenue, the final budget package contains a deficit of approximately $163 million, according to the city’s top financial officials. This unbalanced budget, progressive forces warn, may have set the city up for a mid-year budget crisis, while conservative alderpersons deny the deficit.

This is the first budget in Chicago history to be drafted and passed entirely within city council, independently of the city’s finance team. The city finance team has the internal data required to run budget forecasts and the civic obligation to do so. This team, under Mayor Johnson, had put forward a proposal to generate over $80 million in revenue by increasing taxes on the city’s largest corporations. Corporate-backed alderpersons, arguing that this proposal would harm business growth, put forward an independent “alternative budget.”

The opposition’s plan replaced revenue from corporate taxes with alternative measures: new taxes on plastic bags, liquor and gambling; advertising sales on city property; and a plan to sell debt that Chicagoans owe on parking tickets and emergency services to collection agencies.

The city finance team, however, argues that the corporate-backed alderpersons and their consultants have overestimated the amount of revenue these measures will generate.

For example, one new revenue item in the alternative budget is augmented reality advertising. The alternative plan counts on $6 million in revenue by allowing in-game advertising on city property via augmented reality platforms such as Pokémon Go. The Johnson administration rebukes such estimates, arguing that the initiative would require extensive research and would be unlikely to generate revenue gains next year. This is one of many revenue items that the city believes is overestimated, leading them to arrive at the estimate of a $163 million deficit.

Despite these unfavorable projections, the city council passed the alternative budget with a vote of 30 to 18 on Saturday December 20. Johnson then announced on Tuesday, December 23, that he would not veto the budget. “I will not add the risk and speculation of a government shutdown to the profound worries Chicagoans face,” Johnson said.

Mayor Johnson followed this decision with two executive orders to “clarify” the new budget.

The first order was in response to the plan to sell city debt, owed mostly by working-class Chicagoans, to collection agencies, which Johnson called “morally bankrupt.” His order prohibits the city from selling medical debt, including ambulance fees,to third parties. This essentially limits the debt collection schemes to parking violations and other non-medical debts. In his second order, Johnson created more oversight on police overtime spending.

Progressive forces in the city recognized the loss, while reflecting on the wins in this budget. For example, the initial alternative budget proposal on December 2 included slashes to youth job programs and an increase in city garbage collection fees, alongside other regressive measures. In response, working-class organizations and individuals campaigned to call alderpersons and door knock to demand resources for communities and that the budget not be balanced on the backs of working people. The conservative alderpersons revised their proposal to remove these specific measures within days.

“In coalition with community groups and independent political organizations, and led by Mayor Johnson, we forced them to abandon over a quarter of a billion dollars in cuts, fees, and taxes on everyday Chicagoans,” said Chicago Teachers Union President Stacy Davis Gates in a statement on December 21. “That’s more than we’ve won in a budget fight in years, and we won it because we prioritized people, not profiteers.”

What is missing is the revenue. “When the wheels begin to fall off, we expect the mayor to hold the Corporate Caucus accountable,” Davis Gates said.

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