CHICAGO — Aldermen voted down Mayor Brandon Johnson’s 2026 budget in a Monday committee vote, a historic display of rebellion against the freshman mayor who has been struggling to shore up support for his controversial head tax.

Johnson’s handpicked Finance Committee chair, Ald. Pat Dowell, moved to recess a meeting instead of considering the revenue ordinance for the mayor’s $16.6 billion budget, a sign that the mayor expected to lose. Last week, Dowell said a Monday vote would be “premature,” but she would allow it if the mayor nonetheless wanted to proceed.

Mayoral foes Alds. Raymond Lopez and Anthony Beale tabled her recess motion on a 24-7 roll call. Johnson’s budget chair, Ald. Jason Ervin, then faltered with a superseding motion to recess the meeting later that afternoon until Dec. 2, which resulted in a 18-18 tie.

The 25-10 vote shooting down the revenue package was a remarkable rebuke against the first-term chief executive who has steadily overseen more losses in City Council than his predecessors. But not in modern times has a mayor lost a budget vote, even in committee.

How aldermen navigate the waters after Monday’s defiance could chart a new course in City Hall’s power dynamics and prove consequential to Chicago’s longstanding fiscal woes, but their stance against the mayor sends the process for a second straight year toward a critical end-of-year deadline.

Earlier Monday afternoon, top Johnson adviser Jason Lee clutched a paper with what appeared to be his vote predictions as he lobbied on-the-fence aldermen as they grilled mayor’s budget and finance teams. A few moments later, Lopez interjected to accuse Lee of inappropriately lobbying on the City Council floor against rules. Lee quickly left the room, but turned back to aldermen and blew a two-handed kiss.

The mayor’s path ahead for the head tax remains fraught. Any attempts to water down or kill his head tax could lose critical support from progressives. And there are still other council members who are against his plan to halve the advance pension payment and issue more borrowing.

The council must finalize the 2026 budget by the end of this year. Last year, the mayor took that timeline to the latest it’s been pushed in decades but ultimately clinched 27 votes by mid-December. Johnson this time around has made his wishes to forge full steam ahead clear, including in a Friday afternoon news conference in which he argued to his legislative counterparts “to slow it down just for the sake of slowing it down, it just doesn’t make sense.”

The freshman mayor first pitched the surcharge, which his team projected to raise $100 million, when he unveiled his plan to close a $1.19 billion budget gap for next year. During his October address to City Council, he framed the proposal to bring back the head tax after its 2014 repeal as the city’s best chance to stand up to President Donald Trump and tax the rich.

That argument has struggled to win over allies and opponents alike. Last week, Johnson’s team started floating a modified version that would up the minimum company size from 100 to 200 employees, after complaints that small business owners would be swept up by the surcharge. The $100 million revenue estimate went down to $82 million, and that $18 million gap would be filled by bumping up the personal property lease tax to 15%.

That didn’t do the trick, apparently. After Dowell herself told reporters last week she opposed the levy in any form, the mayor’s team floated another version this weekend where the tax would again apply to companies with 100 employees, but the $18 million that would be restored from that tweak would go toward small businesses in mainly South and West Side wards, three sources said.

Those grants, framed as a reimbursement, would apply only in Socioeconomically Distressed Areas (SEDAs), sources said. The official revenue ordinance that Johnson submitted to be voted on Monday went with the 100-employee version of the head tax, and carved out $18 million for a “Community Business Grant Program.”

Johnson’s third budget cycle was expected to be his most difficult yet given the city’s longstanding fiscal issues and the limited options he had to pull new levers for revenue. The City Council, growing into a new era of rebellion for multiple administrations now, has smelled blood in the water and criticized multiple aspects of his plan. But the mayor has countered that he has yet to see aldermen propose an alternate budget.

With his plan now stalled on Monday, it appears he and the council will have to go back to the drawing board to find a combination of cost-cutting and new revenue that can get to 26 out of 50 votes — or 25, if Johnson is willing to cast a tie breaker.

The road to that threshold has proven difficult for Johnson given that his most ideologically aligned bloc — the Progressive Caucus — is not sizable enough to get over that hump, and not all of those aldermen are won over by his head tax and the rest of his proposal. Thus, the mayor will need the Black Caucus on board, but some of those members are also hesitant on that tax and other components.

“Council has the budget. Council has the budget,” Ervin told reporters on Friday.

Dowell, who has been caught between her role on the mayor’s leadership team and her unequivocal disapproval of a major component of his revenue package, sided with her colleagues against her own motion to recess. But some who voted with Lopez and Beale — including progressive Ald. Daniel La Spata — might have done so because they wanted to allow at least a floor debate, not necessarily a vote, on Monday.

The mayor has framed the case for his head tax and 2026 budget as an existential fight against Trump, who remains unpopular in Chicago. Johnson and his allies have argued without the head tax, the only alternative is punishing “working people” via a property tax hike, which he’s drawn a red line against for 2026 after failing to raise that levy in his previous budget fight.

Johnson’s unsuccessful weekend push to quickly pass the budget had clearly left an impact among some aldermen: frayed trust.

Ald. Timmy Knudsen said the mayor’s team spread “a complete lie” about him by telling other City Council members that the Lincoln Park alderman supported a head tax. “I have been a ‘heck no’ the whole time,” he added.

Knudsen, 43rd, called the move a “grasping at straws” effort to “get a few cheap votes.”

“This body does not trust them, and things like this are pretty direct evidence as to why,” he said. “Instead of having those holistic negotiations, they are trying to sneak their budget through however they can.”

While the head and lease taxes have dominated the budget’s public debate, one of the largest gap-fillers is his planned $1 billion surplus of special tax increment financing districts.

Sweeping $1 billion from more than half of Chicago’s existing TIFs would close $233 million of the city’s own budget gap and provide a lifeline to Chicago Public Schools. The district and its school building fund would receive $572.6 million from the surplus, which CPS officials and the Chicago Teachers Union said would prevent harmful midyear cuts and allow the city to get paid back for a $175 million pension payment for non-teacher CPS employees. That payment is key to helping close the city’s year-end 2025 deficit.

Johnson, who has historically criticized TIF for reinforcing the city’s disinvestment in Black and brown communities, said the surplus would help defend against the impacts of Trump’s education cuts on CPS.

Many aldermen bristled at Johnson’s plans to skim that much money over concerns it would delay or halt future economic development projects in their wards. Johnson administration officials have said property tax revenue growth that fuels TIF funds’ bottom lines has been strong enough that many coffers would be quickly refilled and that no budgeted projects would be canceled.

CTU leadership has been lobbying hard for aldermen not to back away from the record amount, creating a website with a calculator they say shows cuts to school budgets and jobs by ward if the City Council voted no altogether. It was an implicit message to parents: If your alderman opposes Johnson’s budget, they support these cuts to your schools — though opponents disputed the one-to-one fiscal impact.

Meanwhile, a coalition of building trades — unions that represent carpenters, plumbers, laborers, engineers, iron workers, painters, and electrical workers — have urged that “no” vote, arguing such a large TIF surplus would starve their workers of construction jobs. TIF revenues largely fund building renovations, road work and other infrastructure projects.

Aldermen would be hard-pressed to vote against any TIF surplus because they would have to find gap-filling cuts or revenue elsewhere. The search for a head tax alternative has already been difficult.

Johnson’s revenue ordinance contains dozens of smaller tax and fee hikes, including a social media amusement tax of $0.50 per active user per month over 100,000 users (netting an estimated $31 million); extending the 10.25% tax on in-person sports wagering to online bets ($26.2 million); expanding the current “congestion surcharge zone” on Uber and Lyft rides ($17 million); tripling the boat mooring tax from 7% to 23.25% ($3.3 million); and 22 other smallish revenue tweaks to fines and fees, bringing in less than $6 million each.

Johnson also plans to plug at least part of his deficit by borrowing. That includes $166 million to pay for retroactive payments for the recently-inked union contract with Chicago firefighters and $283.3 million for settlements and judgements, including the $90 million “global” settlement for alleged victims of former Chicago police Sgt. Ronald Watts. But while it helps plug the 2026 gap, borrowing for the contracts and settlements will cost roughly $50 million in the following years, finance officials estimated earlier this month.

Chief Financial Officer Jill Jaworski said Monday the costs were “extraordinary” and that the global settlement for Watts, which puts 176 pending suits to rest, would reduce the city’s long-term liability. They will be paid back over five years, while the retroactive pay will be paid off over three, a shorter term than historic borrowing for settlements.

The city is also asking for permission to refinance up to $2 billion in old debt over the next three years for potential savings. Jaworski said approval of that extra bonding authority would allow the city to broaden a “very successful” refinancing already underway this week that could net an extra $35 million in savings on top of the $30 million they’ve already budgeted for.

_____

©2025 Chicago Tribune. Visit chicagotribune.com. Distributed by Tribune Content Agency, LLC.