Pritzker Opposes Johnson’s Corporate Head Tax in Chicago Budget

Illinois Governor JB Pritzker has expressed strong opposition to a significant component of Chicago Mayor Brandon Johnson‘s proposed budget for 2026, specifically the reinstatement of a corporate head tax. During an event at the Economic Club of Chicago, Pritzker stated, “I am absolutely four-square opposed to a head tax in the city of Chicago.” This tax, referred to by Johnson as a community safety surcharge, would require large corporations to pay $21 per employee per month for each employee working within city limits.

The proposed head tax aims to generate additional revenue for the city, but it has met considerable resistance. The original head tax was eliminated in 2014 under former Mayor Rahm Emanuel, and Johnson’s attempt to reinstate it has already faced challenges. Pritzker’s disapproval further complicates Johnson’s efforts to secure the necessary support for the budget.

Johnson argues that his budget proposal seeks to avoid imposing additional taxes on “working people,” instead targeting the “ultra-rich” to generate funds. Despite these intentions, Pritzker views the head tax as contrary to his economic objectives, stating it “penalizes the very thing that we want, which is we want more employment in the city of Chicago.” He believes that the tax could deter businesses from relocating to or remaining in the city.

As the Chicago City Council commenced its first budget hearings this week, council members are under pressure to approve a balanced budget by December 31. Supporters of Johnson’s budget, including allies and child care workers affiliated with SEIU Healthcare Illinois, praised the mayor’s proposals during a news conference. Alderman Jeanette Taylor emphasized the need for prioritizing the city’s residents, highlighting concerns over wasteful spending.

In a show of support for increased funding in the child care sector, child care workers proposed a more substantial corporate head tax of $40 per employee per month, exceeding Johnson’s proposal. They advocate for the additional funds to expand access to child care and provide workers with a $1 per hour raise. Child care advocate Toni Frazier articulated the essential role of these workers, stating, “We’re the people who make it possible for other Chicagoans to go to work.”

Despite the support from certain groups, many aldermen have voiced skepticism regarding the feasibility of implementing a corporate head tax. Alderman Anthony Beale referred to the proposal as a “job killer,” suggesting it sends a negative message about Chicago’s business climate. Similarly, Alderman Matt O’Shea warned that such a tax could exacerbate the trend of businesses considering relocation outside of Chicago and Illinois.

Pritzker also underscored the necessity of maintaining a balanced budget but suggested that the focus should be on identifying efficiencies within the budget rather than imposing higher taxes. He noted, “I haven’t seen any of that in this budget so far,” indicating that budget cuts may be necessary. As discussions continue, the outcome of Johnson’s budget proposal remains uncertain, with the potential for significant implications for Chicago’s economic landscape.