Chicago aldermen exploring new city taxes and fees to boost revenue

Jake Sheridan, Chicago Tribune
·4 min read
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Months after Chicago voters rejected the Bring Chicago Home property tax plan backed by Mayor Brandon Johnson, Chicago aldermen are beginning to explore a wide array of new taxes and fees on city residents, businesses and even visitors.

A Chicago City Council subcommittee created in October on which Johnson has pinned the responsibility for finding more city revenue is scheduled to meet for the first time Wednesday, and its rookie chairman has already begun publicly soliciting ideas from his fellow aldermen.

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“No one would disagree with the fact that we need revenue,” Ald. Will Hall, 6th, head of the Subcommittee on Revenue, told the Tribune. “The goal here is to begin to set expectations and to also show how the city has adjusted to where we are at on different things and a pathway forward.”

Wide-ranging ideas on new taxes and fees have trickled out for months. Hall has suggested the city could legalize and then tax video poker and slot machines, issue a levy on professional services or permit and profit from billboard-style advertisements on Chicago’s iconic Riverwalk.

But the circling, fuzzy propositions are now a little more concrete. While the idea of putting tax hikes on paper might seem politically risky, Hall sent an email a week ago to all 50 aldermen on the council and asking them for their revenue-raising proposals and requesting their feedback on a Google survey about 16 different tax and fee possibilities.

In the note he says he shared “unapologetically,” even though it includes talk of tax hikes, he told aldermen he wants “to make space for your ideas.”

The Google survey he included asked aldermen to respond “Yes” or “No” to the following ideas, with no added descriptions: “Sales Tax on Services; Property Tax (CPI Increase); Monthly/Wireless Plan Tax; Increase in LGDF Share; Head Tax; Alcohol Tax; Checking Bag Tax; Video Gaming Tax; Grocery Tax; City Sticker Increase; Congestion Tax; Income Tax Surcharge; Package Tax; Vacant Lot Tax; Ticket Reseller Amusement Tax; Enterprise Zones.”

On Thursday, Hall shared the survey with the Tribune and described it as only the start of what he promises will be thorough deliberations on where Chicago could raise revenue. The proposals are sure to face a long legislative path.

“It’s nothing to hide,” he said. “It’s not a dictatorship, it’s a democracy. That is what this is about.”

The alderman had little to say about some of the less clear proposals, such as the “checking bag tax” and the “package tax,” the latter of which he explained would “look at weights and distribution of packages that move throughout the city.” Many of the ideas are already in place in other cities, he added.

The list includes campaign ideas aired by Johnson, like reinstituting the so-called “head tax” that was eliminated by the city in 2014 in keeping with a campaign promise by then-Mayor Rahm Emanuel. The head tax allowed the city to charge large businesses a per-employee fee. The list also includes moonshot ideas being floated in the City Council, like a “congestion tax” that would add fees for drivers using busier downtown roadways.

One suggestion seems to pounce on an opportunity that arose when Illinois lawmakers and Gov. J.B. Pritzker repealed a statewide 1% grocery tax. The state’s decision opened the door for municipalities to issue their own replacement 1% grocery tax.

Hall hopes to focus on proposals that will not raise costs for Chicagoans, he said. Some of his ideas, he argued, “don’t link to taxes” on Chicagoans, such as the Riverwalk advertisement idea and the Local Government Distributive Fund, or LGDF, proposal that apparently would seek to expand the portion of income tax revenue Chicago receives from the state.

“We think that taxing sometimes is the only thing that we have,” he said.

But the city needs more money, he insisted. He pointed as proof to the uncertainty that exists about whether the planned River West Bally’s Casino will actually be built. Former Mayor Lori Lightfoot in 2022 picked the project, slated for the Chicago Tribune’s Freedom Center printing plant site, as a revenue-raising project aimed at helping Chicago shore up its pension funds.

As the casino project flounders, Johnson’s efforts to raise revenue for big-idea policies have so far proven unsuccessful. He strongly backed the “Bring Chicago Home” proposal, which sought to raise an annual $100 million with real estate transfer taxes to fund broader homelessness services. But voters rejected the idea in a citywide referendum in March.

The mayor praised the Subcommittee on Revenue in November as a “sophisticated, smart operation.”

In a May inauguration anniversary interview with the Tribune, Johnson said the committee is “building an infrastructure of revenue that does not place the burden on everyday people.” But he did not answer with specific policy ideas when asked how his administration would raise revenue.

“Those conversations are ongoing,” he said. “We’re talking about 40 years of gross neglect in the city of Chicago. I really want to just drive that point home — 40 years of neglect. It has caused tremendous harm to people.”

Tribune reporter Alice Yin contributed.