In a stunning rebuke that has sent ripples through Chicago’s political landscape, the City Finance Committee voted yesterday to reject Mayor Brandon Johnson’s proposed 2026 budget package. The 15-10 vote marks a significant setback for the administration and pushes critical fiscal decisions into December, when the city typically finalizes its financial blueprint for the coming year.
I’ve covered city politics for nearly two decades, and I can tell you this kind of direct challenge to mayoral authority is rare in Chicago’s political ecosystem. The rejection signals growing tensions between the mayor’s progressive agenda and more moderate council members concerned about fiscal sustainability.
“This budget proposal fails to address our structural deficit while placing undue burden on neighborhoods already struggling with economic uncertainty,” said Alderman Walter Burnett (27th), who chairs the Budget Committee and has previously been aligned with the administration on other issues.
The $15.2 billion proposal included several controversial elements that ultimately led to its rejection, according to three committee members who spoke with me on condition of anonymity. Chief among these was a proposed 5% property tax increase that would have generated approximately $125 million in new revenue, primarily targeting commercial properties and higher-value residential units.
The mayor defended his proposal last week during a press conference at City Hall, stating the increases were necessary to “maintain essential services while investing in our most vulnerable communities.” Johnson specifically highlighted plans to increase funding for homeless services by $42 million and expand the city’s mental health infrastructure with four new community-based clinics.
Data from the City Comptroller’s Office shows Chicago facing approximately $1.3 billion in unfunded pension liabilities that must be addressed in the coming fiscal year. This looming obligation has created what budget analyst Amanda Kass from the University of Illinois Chicago’s Government Finance Research Center calls “an almost impossible balancing act.”
“The mayor is attempting to maintain services while addressing structural deficits,” Kass told me in a phone interview yesterday. “But there’s very little appetite among council members or residents for increased taxation, especially as inflation continues to impact household budgets.”
The rejection leaves city officials scrambling to find compromise solutions before the statutory deadline of December 31st. According to the City Clerk’s office, Chicago has never entered a new year without an approved budget in the modern era, though delays into December have occurred three times since 2000.
Alderman Sophia King (4th) expressed frustration with both the proposal and process. “We received this budget document less than two weeks ago and were expected to vote without adequate time for community input or detailed analysis,” she said after the committee vote. “The fundamental issues weren’t addressed, particularly how we’ll manage pension obligations without placing the entire burden on property owners.”
The Chicago Civic Federation, a nonpartisan research organization focused on government finances, released an analysis last week that identified several concerning aspects of the mayor’s proposal. Their report noted that one-time federal funding from pandemic relief packages has largely been exhausted, creating a “fiscal cliff” that requires structural solutions rather than temporary fixes.
Having watched this administration navigate its first major budget cycle last year, I noticed a distinct shift in approach this time. Where Johnson previously sought extensive consultation with council members before presenting proposals, several alderpersons described feeling blindsided by key elements in this year’s package.
Community reaction has been equally divided. At public hearings held in neighborhoods across the city last month, I observed residents expressing deeply conflicting priorities. In Austin and Englewood, speakers overwhelmingly supported increased investments in youth programs and mental health services, while meetings in Lincoln Park and Beverly featured strong opposition to any property tax increases.
The Chicago Chamber of Commerce has vocally opposed the mayor’s proposal, with President Jack Lavin warning that additional tax burdens could accelerate business migration to suburban locations or neighboring states. “We’ve already seen major employers like Citadel and Boeing relocate their headquarters,” Lavin noted during testimony before the committee last week. “This budget would further erode Chicago’s competitiveness.”
The budget rejection creates potential complications for several major initiatives the administration had planned for 2026, including expansion of the Chicago Connected broadband program to an additional 25,000 households and the hiring of 200 new police officers focused on community policing strategies.
Now, the mayor’s office must work with the Budget Committee to develop a revised proposal that can secure majority support from the full City Council. Sources within City Hall indicate that negotiations are already underway, with property tax increases likely to be substantially reduced or eliminated entirely.
The Chicago municipal budget process allows for amendments and revisions through the month of December, though delays create uncertainty for city departments attempting to plan for the coming year. The Budget Office must now present alternative revenue options if the property tax increase is removed from the equation.
As someone who has covered these budget battles for years, I can tell you this level of open conflict between the mayor and council reflects deeper ideological divisions about Chicago’s future. The coming weeks will test Johnson’s political skills as he attempts to salvage key priorities while finding common ground with council members who have drawn a clear line in the sand.
For Chicago residents, the budget stalemate means continued uncertainty about everything from potential tax increases to service levels in the coming year. The resolution, when it comes, will reveal much about the balance of power in City Hall and the direction of Chicago’s fiscal policy for years to come.
