(Bloomberg) — The Chicago City Council approved an approximately $17 billion budget for 2025 that raises levies and fees by about $256 million after Mayor Brandon Johnson removed his proposed property tax hike.
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The spending plan comes after weeks of contentious talks between the Johnson administration and aldermen over how to close a nearly $1 billion deficit with higher taxes or cuts. The depth of disagreements had raised concerns about whether a budget would pass by the Dec. 31 statutory deadline. The budget passed 27 to 23 on Monday.
“I know this was a long and arduous process,” Johnson said in remarks in the council chamber after the votes. “The budget we passed today is yet another down payment on securing a better, stronger and a much safer future for the people of this fine city.”
To win approval, the first-term progressive mayor had to revise his plan amid vigorous pushback from council members. His original proposal in October included a $300-million property-tax increase that aldermen unanimously rejected. He scaled that down before nixing it completely to get enough support for passage.
The spending plan won approval after Johnson and his team used a series of piecemeal items, including other taxes and fees to fill the nearly $1 billion deficit in the city’s $5.6 billion operating fund, known as the corporate fund. That fund pays for public safety, streets and sanitation among other services. The revenue measure also includes $128 million from higher cloud computing levies.
Before the vote, Alderman Carlos Ramirez-Rosa, an ally of Johnson, said he supported the budget. He highlighted the critical investments in youth employment and mental health services as well as the supplemental pension payment.
Johnson’s budget uses about $54 million in savings from a municipal-bond refinancing earlier this month to help plug the deficit. While officials had considered using those funds to repay debt related to a loan for the 2009 purchase of the former Michael Reese Hospital, the city is now deferring that repayment.
The revised budget also cut vacant positions including positions in the mayor’s office. The budget passed even though some city council members complained about the lack of cuts and transparency. Chicago’s business community has voiced opposition to tax levies as they fear any hikes will curb economic growth and further raise the cost of living in the third-largest US city.
“We cannot continue to spend beyond our means, but we do,” Alderman Marty Quinn said before the vote. “While there’s no longer a property tax increase on the table, there are a number of nickel and dime revenue generators.”
(Updates to add comments from officials and details of spending plan starting in third paragraph.)
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