Chicago Mayor Brandon Johnson is introducing a $17.6 billion city budget for next year that revives a per-employee head tax on businesses and asks to sell bonds to pay settlements and judgments from past police misconduct cases, Bloomberg Law reported.
Source: Bloomberg Law
The plan is built around an $882.4 million gap in the city's main operating fund. It keeps pension contributions rising and holds down cost growth in the operating fund, while putting money into violence reduction, mental health services and youth programs in the city's poorest neighbourhoods, Bloomberg Law reported.
Source: Traders Union (reporting Bloomberg)
Borrowing $480 million to pay settlement bills
According to the Chicago Tribune, whose reporting was summarised by the Chicago Patriot, the budget would borrow about $480 million: roughly $260 million for the Guevara cases, $120 million for settlements approved in 2026 and $100 million for settlements expected in 2027, with the debt repaid over five to seven years.
Source: Chicago Patriot (reporting the Chicago Tribune)
The city's settlement and judgment costs are projected to rise by $266 million next year, most of it the price of police misconduct, the Tribune reported. Earlier this month the City Council unanimously approved a single $260.8 million settlement covering lawsuits tied to former detective Reynaldo Guevara. Asked what the interest on the new borrowing would cost, mayoral press secretary Allison Novelo declined to estimate it, saying it would depend on future market conditions, the Tribune reported.
Source: Chicago Patriot (reporting the Chicago Tribune)
$17.6 billion total budget; $882.4 million operating gap; about $480 million in proposed borrowing for settlements; settlement costs projected to rise $266 million next year. Yaani: the settlement borrowing alone is roughly $0.48 billion — money that goes out at once while the bill, plus interest, lands in later budgets.
Senior mayoral adviser Jason Lee defended the borrowing as paying for past harm, calling it a non-structural expense dating back to legacy harms that today's taxpayers are accountable for, even though the events occurred decades ago. Johnson, a first-term mayor seeking re-election, said the budget's most important part is investing in young people, libraries and community violence intervention workers. The head tax revival faces the City Council next: Johnson pushed the same levy last year and aldermen rejected it, and his fallback, if it is rejected again, he would only say he would evaluate all revenue options.