Johnson’s 2025 Chicago budget breaks property tax promise
Chicago Mayor Brandon Johnson delivered his 2025 budget Oct. 30, including a nearly $1 billion deficit, runaway spending and low revenues that have him breaking his campaign promise not to raise property taxes.
Chicago Mayor Brandon Johnson unveiled his $17.3 billion budget for fiscal year 2025 on Oct. 30, including a $982 million shortfall.
He could have cut down on labor costs or broken his campaign promise and increased taxes on Chicago property owners and renters. He chose higher property taxes.
His proposed 2025 budget includes a $300 million property tax increase. It comes despite city council members urging Johnson to reject the tax hike and at a time when wage growth is only 3.5% and cost-of-living expenses have increased 4.1%.
Chicago missed the chance to fix its financial problems, using $1.3 billion in federal relief to bolster the general funds budgets between 2022 and 2024. Now, Chicago’s 2025 budget will continue the tradition of overspending and adding debt.
Johnson’s budget address failed to address pension reform. He mentioned tax increases four times. Despite expressing his desire to “not leave a legacy of unpaid bills to the next generation,” Johnson can’t do that without reining in the city’s skyrocketing pension costs.
The city council’s two weeks of budget hearings are between Nov. 6 and Nov. 20. By law, the budget must be finalized by Dec. 31.
Here is an overview of plans in Johnson’s 2025 budget address that are unlikely to bring Chicago the long-term financial stability it desperately needs.
The mayor plans to dip into the city’s TIF funds to cover its unpaid bills.
The city will utilize tax increment financing funds to address its immediate budget needs. This is a continuation of the city’s misallocation of funds set aside for city development. Chicago will collect $132 million in the funds, while $300 million dollars from the funds will go towards balancing the Chicago Public Schools budget.
The CPS budget is facing financial issues of its own because of pension costs. In return for allocating $300 million in tax increment financing funds, the city expects CPS to pay $175 million into the Municipal Employees’ Annuity and Benefit Fund. It is doubtful the financially troubled city will receive that money from the financially troubled school district.
Johnson will cut more unfilled jobs
Johnson made a commitment to not cut jobs despite personnel costs making up nearly 60% of the 2025 budget. “While some have called for extreme austerity measures, such as mass layoffs to address our fiscal gap, these are not solutions that align with our city’s values,” Johnson said.
Instead, Johnson proposed eliminating 743 vacant positions. The Chicago Police Department will see 400 of these vacancy cuts. The cuts come in the wake of some of the highest violent crime rates the city has ever seen.
Johnson’s proposed property tax hike breaks his campaign vow.
By far, the biggest pain point in the budget comes from Johnson’s proposal to raise Chicago’s already crippling property tax burden. This serves as a blow to both businesses and residents, aggravating the city’s economic growth challenges and population decline.
The city is set to collect $300 million in new property taxes, according to the proposed budget. That shatters Johnson’s campaign promise. While it may still be subject to change, Johnson’s spokeswoman Erin Connelly said Chicago homeowners should expect about an average 4% increase on their bills from 2023 amounts.
Conclusion
The mayor has once again shown he favors his public employee union backers over the financial wellbeing of city residents. Chicago residents already faced some of the highest property taxes in the nation. Chicago has the second highest commercial property taxes among the nation’s largest cities, only behind struggling Detroit. The city also has some of the highest residential tax rates.
An additional increase in these taxes will harm Chicagoans, especially those already facing the pain of high home and rental prices. Increases in commercial property taxes will continue to contribute to the out-migration of businesses and deter much-needed job creation.
The 2025 budget proposal also continues to leave Chicago’s crippling pension burdens and bloated costs of administrative personnel unresolved. Finally, the city budget proposal will continue to hamper its police department, which already faces extremely high overtime costs.
Johnson’s broken promise and rising budget may cost Chicago much more than just higher property taxes – it could cost jobs and residents. Aldermen need to stop the tax hike and force Johnson to keep his promise to voters.