By Jim Talamonti | The Center Square
The Center Square

(The Center Square) – The mayor of Chicago is touting new taxes in his 2026 budget proposal, but business groups are expressing disappointment and concern.

Mayor Brandon Johnson addressed the city council Thursday and unveiled his “Protecting Chicago” budget.

The $16.6 billion spending plan includes a corporate head tax on hiring, social media and “Big Tech” taxes and new taxes on sports wagering and hemp.

The mayor also proposed a “yacht tax” on boat mooring and higher fees on vacant buildings.

Johnson spent several minutes criticizing President Donald Trump’s administration before he discussed budget details before the council.

The mayor said his proposal would respond to “attacks” by the federal government and close a $1.15 billion deficit with new taxes, fees and tax-increment financing dollars.

Johnson said federal taxpayer money should be going to public schools instead of going to border patrol and billionaires.

“That’s why this budget proposal includes the largest city investment in our public schools in the history of Chicago through a historic $1 billion [tax-increment financing] surplus,” Johnson said.

The Chicago Teachers Union released a statement applauding the mayor’s proposal.

“Today, Mayor Brandon Johnson delivered the most transformative budget to come out of City Hall in generations. He is protecting our city from Trump’s cuts and proposing a budget that fights for working people instead of against them,” the CTU statement said.

The mayor said some of the most transformative proposals from his budget roundtables and budget working group required approval from the state legislature. Johnson said he would work with his allies in Springfield, Gov. J.B. Pritzker, Illinois House Speaker Emanuel “Chris” Welch, D-Hillside, and state Senate President Don Harmon, D-Oak Park, to move his agenda for Chicago at the state level.

“We will work side by side with anyone across the state who wants to champion real progressive revenue,” Johnson said.

The Illinois Retail Merchants Association said the mayor’s budget plan will lead to more empty storefronts in neighborhoods across Chicago.

“Taxing job creators won’t drive economic growth or improve public safety. What we need are real, immediate solutions—not budget gimmicks or political blame games,” IRMA president and CEO Rob Karr said in a statement.

Karr said policies like the corporate head tax would inhibit growth.

“The head tax is a charge on every employee that a firm hires per month. That disincentivizes hiring. While he’s claiming it is on only the largest corporations, that’s just simply not true. It’s on every business that has 100 or more employees,” Karr told The Center Square. “That could be two grocery stores, three restaurants. It’s going to hit far more than the largest corporations, but even if it was just aimed at the largest corporations, it’s bad public policy because it disincentivizes hiring.”

Karr said the mayor’s social media tax would add another cost for businesses.

“That is one of the most popular and effective tools, particularly for smaller businesses, to get noticed and to grow. Again, this just going to exacerbate Chicago’s business development problems,” Karr explained.

The Illinois Chamber of Commerce expressed “deep concern and disappointment” with several provisions of the mayor’s budget.

“Proposals to revive an outdated and harmful head tax, presented as a tool for ‘community safety,’ along with yet another increase to the cloud tax, and the creation of incredibly flawed social media tax place Chicago at a competitive disadvantage nationally,” the Illinois Chamber said in a statement.

Earlier Thursday, during the city council’s public comment period before Johnson delivered his address, Fraternal Order of Police President John Catanzara, Jr. blasted the mayor for spending taxpayer money on people who are in the country illegally.

“You’re really good at using city resources and city dollars, instead of supporting the citizens that were born here and legally live here and everything else, to spend on everywhere else, and now you’ve got a billion-dollar budget hole,” Catanzara said.

The city council has a deadline of Dec. 31 to approve a budget for 2026.