Pritzker Opposes Johnson’s Corporate Head Tax in Budget Proposal

Illinois Governor JB Pritzker has voiced strong opposition to a key component of Chicago Mayor Brandon Johnson’s proposed budget for 2026. During a recent discussion at the Economic Club of Chicago, Pritzker stated, “I am absolutely four-square opposed to a head tax in the city of Chicago.” The proposed corporate head tax, termed a community safety surcharge by Johnson, would charge large corporations $21 per employee per month for those working within city limits.

The head tax, which was eliminated by former Mayor Rahm Emanuel in 2014, is viewed by Pritzker as detrimental to the city’s economic growth. He argued that such a tax “penalizes the very thing that we want, which is more employment in the city of Chicago.” Pritzker emphasized that the tax would hinder efforts to attract new businesses and retain existing ones.

Johnson, who is positioning his budget as a means to avoid increasing taxes on “working people,” has suggested that the burden would instead fall on the “ultra-rich.” Nevertheless, Pritzker’s stance complicates Johnson’s efforts to push the budget through the Chicago City Council, which must approve a balanced budget by December 31, 2025.

As discussions unfold, members of the City Council have begun budget hearings, with some expressing skepticism about the viability of implementing a corporate head tax. Alderman Anthony Beale from the 9th Ward commented, “I think the head tax is definitely a job killer. It sends the wrong message … that Chicago is not open for business.” Similarly, Alderman Matt O’Shea from the 19th Ward noted the potential negative impact on businesses considering leaving Chicago.

Supporters of Johnson’s proposal, including child care workers represented by SEIU Healthcare Illinois, have even suggested a higher rate of $40 per employee per month. They argue that increased funding would allow for greater investment in child care services and provide much-needed raises for workers in the sector. Child care advocate Toni Frazier highlighted the essential role these workers play in supporting the city’s economy, stating, “We’re the people who make it possible for other Chicagoans to go to work.”

Despite calls for increased funding, many aldermen remain wary of the impact of such a tax. The governor indicated that fiscal adjustments are necessary, urging city officials to seek “efficiencies” to balance the budget. Pritzker remarked, “I haven’t seen any of that in this budget so far. There are going to be changes. People are not going to like certain revenue enhancements that he’s got in his budget.”

As the debate continues, both Pritzker’s and Johnson’s positions will play a crucial role in shaping the future of Chicago’s financial landscape. The discussions around the proposed budget reflect broader concerns about economic growth, job creation, and the challenges of funding essential services in a major urban center.