The City of Chicago operates on a $16.7 billion budget. The next mayor is going to be challenged to stretch that money further than ever before, balancing the needs of the city with the realities of its available cashflow. Brandon Johnson has a number of ideas on this topic, few of which are feasible let alone wise to pursue.
| What Brandon Proposes | Why It Won’t Work |
|---|---|
| The Big Banks Securities and Speculation Tax on financial transactions, aka the “LaSalle Street Tax” Anticipated Revenue: $100 million | This would require a change in state law to even be allowed. But even if that happened, the legendary trading floors at places like the Chicago Merchandise Exchange and the Chicago Board of Trade are a thing of the past; virtually all of this business is now handled electronically. The financial institutions that conduct this business no longer require a physical presence within the city. They can literally relocate their business operations with the flip of a switch if they choose to. This one is a particularly bad idea: not only would the city not get that $100 million of anticipated revenue, it would drive away the hundreds of millions in existing taxes it already collects from these entities. |
| New tax on jet fuel used at O’Hare and Midway Anticipated Revenue: $98 million | Existing bond agreements require that tax revenue generated at the airports be used for airport-related expenses. Besides… if this was actually viable, don’t you think a sitting mayor would have tapped into it by now? |
| Increase the Chicago Hotel Accommodations Tax Anticipated Revenue: $30 million | Tourists to Chicago already pay the second-highest tax rate of any US city, behind only New York City. (Source: The Civic Federation) The city’s leisure visitation has largely returned to pre-pandemic levels but falling business visitation has been a problem since before the pandemic, specifically due to the high costs related to hosting events. (Remember stories about $700 pots of coffee at McCormick Place?) The city has lost considerable event traffic to places like Las Vegas and Orlando, and thus the revenue these visitors spend in places like restaurants and cultural attractions. Rather than tax the existing visitors more, encouraging more visitors to come would raise more than $30 million, and raise it ‘the right way’. |
| “Head tax” on each employee working within the city limits Anticipated Revenue: $20 million | Chicago previously had a Head Tax from 1973 until 2014. By some accounts, it contributed to the city’s loss of over 250,000 jobs while it was in effect. (Source: Chicago Tribune) Downtown’s work population has declined to an unsustainable level due to the pandemic; we need to be encouraging people to return, not discouraging. |