2026 Budget
2026 Budget Updates & Survey Results
Mayor Johnson unveiled his $16.6 billion budget proposal for 2026 on October 16. The City faces a confluence of unique fiscal challenges, resulting in a historic $1.18 billion budget gap. The gap is primarily driven by debt obligations, pension obligations, increased healthcare costs, and politically motivated cuts from the Trump regime. At the same time, the City is set to have one-time COVID relief dollars expire. This means that preparing a balanced and responsible budget has become increasingly challenging and critical to secure Chicago's financial future.
Following the Mayor's budget address in October, Alderwoman Hadden circulated a budget survey to gather feedback and insight from our neighbors in the 49th Ward. Alderwoman Hadden has gathered this feedback every year to assist her during the budget negotiation process and to inform her final decision. The 49th Ward office typically goes over the results during a budget town hall. However, this year, the Alderwoman is on medical leave following her full hysterectomy. We still wanted to make sure constituents could see their feedback, so we are sending out this special edition of the 49th Ward Updates to share the survey results and other updates on the proposed 2026 budget.
A total of ninety-six residents responded to the survey to identify their budget priorities, share opinions on specific components of the budget proposal, and provide input on potential amendments.
Budget Priorities:
Every year, we ask constituents to rank how they believe the City of Chicago's government services should be prioritized in the budget. The city services are categorized into ten categories, and constituents are asked to rank them highest to lowest in priority, with one being the highest and ten being the lowest. The ten categories of city services constituents were asked to rank are:
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City Development (housing, homelessness services, economic development, etc.)
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Community Services (libraries, youth programming, etc.)
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Crisis Intervention (including street violence intervention, mental health crisis intervention, etc.)
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Cultural Affairs & Special Events (street festivals, public art, etc.)
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Infrastructure (bridges, streets, water projects, etc.)
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Police
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Public Health (Flu shots, epidemiology, public health clinics, etc.)
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Government Services (City Clerk's Office, Administrative Hearings, and other City offices)
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Streets & Sanitation (rodent baiting, garbage removal, street sweeping, etc.)
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Other Public Safety (ambulances, Fire Department, and 911 services)
The chart below reflects how 49th Ward constituents have ranked these 10 categories of city services throughout the years. Asking the same question every year helps our office identify patterns or shifting attitudes on certain issues. It helps inform us not only on how to negotiate during budget conversations, but also what additional legislative opportunities we should pursue.
Respondents’ top funding priorities for 2026 were City Development, Community Services, Crisis Intervention, and Infrastructure—four categories that have consistently ranked among the highest priorities over the past several years; while Streets & Sanitation and Other Public Safety remained mid-tier priorities. Public Health has shifted from a top priority for constituents in 2021—at the height of the pandemic — to a mid-tier priority as people received vaccinations and returned to pre-COVID routines and spaces. Government Services and Cultural Affairs & Special Events have remained at the lower end of 49th Ward constituents' priorities throughout the years. While Police have also remained among the lower ranks through the years, we did see some increase in its prioritization in the 2023 budget survey (circulated in 2022) and 2025 budget survey (circulated in 2024), when crime rates were higher.
Tax Proposals Feedback:
The survey then asked respondents to weigh in on several components of the proposed budget as well as some potential amendments to explore. The first series of questions asked respondents to provide feedback on the new revenue streams proposed in the 2026 budget. It specifically asked the following five questions on the new or expanded taxes:
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The current budget proposal establishes a new Community Safety Fund. Modeled after the former "Head Tax" dissolved under Mayor Emmanuel, the re-envisioned Community Safety Surcharge will only apply to businesses with 100+ employees who perform 50% or more of their work within the city of Chicago. These employers will be required to pay a $21/employee surcharge each month, which is projected to generate $100M in its first year. The $21 is based on the rate it would have been currently had it been adjusted for inflation when first applied in 1973. Do you support the establishment of the new Community Safety Surcharge?
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The current budget proposal establishes a Social Media Amusement & Responsibility Tax (SMART). This tax would extend the City's amusement tax to large tech companies, such as Meta, that profit from data mining their users. SMART would charge large tech companies 50¢ for every active user over 100,000. It is estimated to generate an additional $31M a year in revenue, which would help fund expanded mental health services. Do you support the establishment of the SMART tax?
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The current budget proposal establishes a new 10.25% tax on online sports wagering platforms, such as DraftKings. This is anticipated to generate $26.2M/year. Do you support establishing an online sports wagering tax?
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The current budget proposal includes an increased congestion surcharge for rideshare services, anticipated to generate an additional $65.4M a year. Do you support increasing the congestion surcharge?
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The 2026 budget proposal establishes a new yacht tax, which is anticipated to usher in an additional $5.6M a year. Do you support the establishment of a new yacht tax?
Whereas respondents overwhelmingly supported the establishment of the yacht tax, the social media tax, and the online sports wagering tax, only a plurality of respondents (48%) either strongly supported or somewhat supported the Community Safety Surcharge (the new head tax). A plurality of respondents (38.6%) also either strongly supported or somewhat supported the increased congestion surcharge for rideshare services, while 32.3% opposed it.
Since the budget survey closed, ongoing discussions have been taking place between stakeholders, the Office of Budget Management, City Council, and the Mayor's Office regarding these new or expanded revenue streams.
In those negotiations, the Mayor's office has proposed an amendment to the head tax. This would increase the tax for businesses that have 200 or more employees, which would exempt additional businesses that expressed concerns that 100 was too low a threshold. This change would have an $18 million impact on projected revenue, reducing the Community Safety Surcharge fund to an anticipated $82 million in 2026.
To help close the $18 million gap resulting from the modified head tax, the Office of Budget Management proposes increasing the Personal Property Leasing Tax from 11% to 15%. The PPLT applies to businesses or individuals that are either a lessor or lessee of personal property used in Chicago, including cloud computing services. Some of the largest tech firms in Chicago, such as Microsoft and Amazon, have become the biggest contributors to the PPLT each year.
Finally, the expanded congestion fee for rideshares was modified from a percentage of the total ride to a flat $1.13 per ride. The proposed amendment also reduces the congestion area, carving out portions of Uptown and Hyde Park.
Potential Amendments Feedback:
Next, we asked constituents in the 49th Ward to weigh in on potential amendments to the budget proposal. For this section, we honed in on two questions, which were:
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The proposed budget adds an additional $100M to the line item for police overtime, bringing the total to $200M. It was reported at the end of August that police had spent $166M on overtime, overspending the allocated line item by $66M. In 2024, police spent a total of $270M on overtime. In July of this year, the Office of the Inspector General launched a new police overtime data dashboard to help the City better understand and analyze overtime information for specific ranks, units, and timeframes. This will hopefully allow CPD officials to make adjustments and improve efficiencies moving forward. With all this information, do you support the $100M increase to CPD's overtime line item?
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Gender-based violence funding has seen cuts at the federal, state, and county levels in recent years despite a spike in demand due to the COVID-19 pandemic. It also faces a fiscal cliff, with American Rescue Plan Act funds set to run dry. In Chicago, our gender-based violence service providers rely on the houseshare surcharge to fund their services. They are seeking an increase in this tax from 2% to 4%, which would generate an additional $4 million a year to help victims of domestic and sexual violence seek housing and other resources to escape their abusers. This tax would be applied to people visiting Chicago who rent AirBNBs and VRBOs. Do you support an increase to this tax?
A majority of respondents opposed increasing the police overtime line item by an additional $100 million in 2026, whereas 31.6% either strongly supported or somewhat supported increasing overtime spending. Additionally, the vast majority of respondents (72.9%) either strongly supported or somewhat supported increasing the houseshare surcharge to support gender-based violence funding.
The amended budget proposal maintains the increased line item for police overtime at $200 million. The Mayor's Office has committed to additional measures to rein in overtime costs, including monthly reports and quarterly hearings before City Council on its overtime spending. The line item has also been capped at $200 million. Any additional funds exceeding the line item will require a full vote of City Council for approval. Finally, the Ernst & Young report identified opportunities to recoup funds from special events and festivals held in the city. Some of these costs are associated with police overtime. While this specific measure wasn't adopted in the 2026 budget proposal, the Office of Budget Management and the Mayor's Office have committed to pursuing these long-term initiatives over the coming years.
In the updated budget proposal, the houseshare surcharge remains at 2% for gender-based violence funding. However, The Network, the Office of Budget and Management, and the Mayor's Office were able to secure additional funding for these critical services with the increase in the PPLT tax. This is especially important as we see domestic violence rates steadily grow, despite other areas of violence having dropped over the past year.
Property Tax Feedback:
The next series of questions in the 49th Ward budget survey were around potential changes to the City of Chicago's property tax levy. While the 2026 budget proposal did not include any increases to the property tax levy, we felt it was important to include these questions to demonstrate the impact different scenarios would have on an owner's property tax bill.
City Council has not imposed a property tax increase for the City of Chicago's levy since 2022 (when it was automatically raised at the rate of inflation). In the 2021 budget (voted on in 2020), City Council voted to raise property taxes. That vote also included a provision in the management ordinance that would automatically increase property taxes every year at the same rate of inflation, capping it at no more than 5% to account for economic volatility. However, City Council paused the automatic increase for its 2023 budget (voted on in 2022), when inflation hit historic highs.
When Mayor Johnson was elected in 2023, he promised not to raise property taxes. The 2024 budget (voted on in 2023) did not include a property tax increase and removed the provision that ties property taxes to inflation. Then, in his 2025 budget address (which occurred in 2024), Mayor Johnson unveiled a historic $300 million property tax increase. City Council unanimously voted down that proposal. After working closely with Progressive Caucus leadership and colleagues across the ideological spectrum in the City Council, Alderwoman Hadden had found a pathway to reduce the amount to $68.5 million, which would have been the City's levy in 2025 had it not rescinded the CPI adjustments. This amounted to an additional $60/year, or $5 per month, in property taxes for the average homeowner in Rogers Park based on 2024 property tax bills. In the 49th Ward budget survey for 2025, 68.6% of respondents said that they would support a $100 million property tax hike to maintain services at the time.
After numerous negotiations, the Mayor's Office presented its fourth budget proposal for 2025, which eliminated the property tax altogether. This decision resulted in a downgrade from credit rating agencies, which cited that the 2025 budget relied too heavily on one-time fixes and lacked sufficient structural changes. A downgrade in our credit rating makes it more expensive to borrow money in the future, which the City relies on to fund major capital infrastructure and other projects.
Unfortunately, the government is not immune to inflation or market conditions. These factors also impact our delegate agencies and community-based organizations that rely on government funding to provide direct services to some of our most vulnerable populations.
Knowing this, we entered the 2026 budget season aware that we had to keep all options on the table, especially given the slew of tenuous and controversial new revenue streams. The new head tax funds some of our most valued programs and services, including youth employment, violence intervention, and gender-based violence services. If this provision were to be voted down or eliminated entirely, City Council would be left to either identify an alternative funding source or eliminate those programs. While we would prefer not to impose a property tax on residents with this budget, we wanted to continue gauging our constituents' feelings on this issue should we need to change course.
With that, we asked the following three questions in our budget survey related to property taxes:
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In the event any of the new taxes are negotiated to a lesser amount, would you support a property tax increase to fill any gaps? Below is a chart demonstrating how different levels of a property tax would affect different assessed values in a given year. For example, a condo valued at $250,000 would see an increase in its property tax bill at $147/year with a $200M property tax increase. A $150M increase would result in an extra $110/year, a $100M increase would result in an extra $74/year, and a $50M increase would result in an extra $37/year for the same property.
2. If a property tax is unavoidable as part of budget negotiations, how much would you support?
3. We might not be able to avoid a property tax increase in perpetuity. Suppose we forego a property tax increase this year. Would you support reinstating the provision that automatically ties property tax increases each year at the rate of inflation, capped at no more than 5% in a given year to account for economic volatility?
A majority of respondents (51%) either strongly opposed or somewhat opposed a property tax increase this year. However, if a property tax increase was unavoidable, 69.8% of respondents said they would support a $50 million increase, and 59.4% said they would support a $100 million increase. Respondents were pretty evenly split on the question about reinstating the provision that would automatically raise property taxes each year at the rate of inflation, with 37.5% opposing it, 36.4% supporting it, and 26% remaining neutral on the question.
Since closing the survey, the Cook County Treasurer's Office has mailed property owners their second installment property tax bill for 2024. These were delayed for months due to a new technology rollout at the Cook County Clerk and Treasurer's Offices. The second installment bill reflects property owners' new assessed values after the Rogers Park Township underwent its triennial reassessment in 2024. The Cook County Assessor's Office published its Reassessment Report earlier this year, which explains its methodology in determining a property's assessed value. It also provides market condition data on the Rogers Park Township, which factors into a property's assessed value.
A report from Cook County Treasurer Maria Pappas finds that a drop in commercial taxes in Chicago (primarily in the Loop) has shifted much of the tax burden onto residential homeowners. This has resulted in a 30-year record high median of 16.7% increase in residential property taxes due on December 15. The triennial reassessment has especially hit lower-income neighborhoods on Chicago's south and west sides the hardest.
The report cited a low supply of houses for sale in Chicago over the past few years, pushing buyers into more affordable neighborhoods, which consequently increased the area's property values. In contrast, some of Chicago's most affluent neighborhoods–such as Lakeview– saw the smallest home sale price increases. The shift in assessed values and total amounts billed varies from township to township, and we are still evaluating how this reassessment impacted property owners' bills in the 49th Ward. As we continue to analyze the data, it will help guide our decision-making for future budgets.
Open-Ended Comments:
The final section of our budget survey always provides an opportunity for respondents to leave comments. This provides constituents with the opportunity to expound on any answer they may have provided, share their ideas for consideration, and share any additional feedback they may have. Not every constituent opts to leave a comment. For the 2026 budget survey, only 41 out of 96 (or 42.7%) respondents shared a comment. Common themes identified in the open-ended comments are below:
Thank you to everyone who took the time to share their perspectives and feedback through our community survey and by emailing or calling the office. Your feedback provides Alderwoman Hadden with critical guidance as we continue with the City's budget process. A slide deck containing all the survey results is available on the 49th Ward website, accessible by clicking here.
The 2026 budget proposal is slated to go before the Committee on Finance and the Committee on Budget today for a vote. If it passes out of Committee, it is scheduled for a vote in the full City Council on Thursday, November 20.