Johnson Proposes Corporate Head Tax to Close Chicago's $882M Gap
Mayor Johnson's FY2027 budget proposal pairs a revived corporate head tax with a lease tax hike as Chicago faces an $882.4M shortfall.
Mayor Brandon Johnson’s administration released its fiscal year 2027 budget proposal on Oct. 21, pairing a revived corporate head tax with a higher lease tax rate as the city confronts an $882.4 million shortfall, a figure WTTW independently reported in September. City Council has not voted on the plan. Nothing in it is final until aldermen act.
Why it matters
A head tax and a lease tax increase both land on the cost side of building and operating in Chicago. The Personal Property Lease Tax applies to leased equipment, including construction machinery and data processing gear used on active job sites, so a base-rate increase raises project costs well before any vote is final. The proposed head tax targets the city’s largest employers and would factor into corporate decisions on office footprint and headcount, both demand signals commercial landlords and builders track closely.
The numbers
The FY2027 proposal projects the corporate head tax would raise $113.8 million, according to the BetterGov Association’s analysis of the city’s budget book. The Personal Property Lease Tax base rate would rise from 15% to 20%, with vehicle leases held at 15%, an estimated $1.6 billion in revenue versus $1.2 billion projected a year earlier. The Chicago Police Department is proposed at roughly 20.3% of all departmental appropriations. The $882.4 million shortfall itself is more than 23% smaller than the $1.15 billion gap the city faced heading into the prior budget cycle, per WTTW.
What’s next
No City Council vote on the FY2027 budget has been scheduled as of this writing. A similar corporate head tax proposal was voted down during last year’s budget cycle, per the BetterGov Association’s analysis, making this the second straight year Johnson’s administration has pitched a version of the tax. For developers and agents tracking the cost of doing business in Chicago, the lease tax increase is the more immediate signal: it touches equipment leasing on job sites now, regardless of how the head tax fight resolves in council.
On the record
Primary record
- Public recordThe $882.4 million FY2027 shortfall figure cited in the BetterGov Association's budget analysis was cross-checked against WTTW's independent reporting of the same number, confirming it as a corroborated figure rather than a single advocacy group's estimate.View the record on news.wttw.com
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