City Council Budget Stalemate Continues with 20 Days to Avoid Shutdown

The clock is ticking at City Hall, and Chicago’s leaders appear no closer to resolving a budget standoff that could trigger an unprecedented government shutdown.

With just 20 days remaining before the deadline to pass a spending plan, a group of alderpersons opposed to Mayor Brandon Johnson’s budget introduced their own revenue package Tuesday, setting up a dramatic showdown between the mayor and his council rivals.

The alternative proposal conspicuously omits Johnson’s signature policy: a corporate head tax that would charge large businesses $3.50 per employee to help close a projected budget gap. That provision has become the central battleground in a fight that touches on fundamental questions about Chicago’s economic future.

“We can balance this budget without driving businesses out of the city,” said Alderman Brian Hopkins (2nd), one of the leaders of the council rebellion. “The mayor’s head tax is a job killer. Period.”

Marathon Meetings Ahead

In an unusual move, the City Council agreed to meet on five consecutive days—Monday through Thursday and again on December 23—in hopes of finding common ground. The marathon session schedule reflects the urgency of the situation and the vast gulf that remains between the two sides.

Johnson, speaking to reporters after Tuesday’s council session, insisted he remains open to compromise but refused to abandon the head tax entirely.

“I’m going to do whatever it takes to avoid a government shutdown,” Johnson said. “But I’m not going to balance this budget on the backs of working families. Large corporations need to pay their fair share.”

The mayor’s proposed $16.8 billion budget relies on the head tax to generate approximately $100 million annually. Without it, city officials would need to find alternative revenue sources or make deeper cuts to services—neither of which has broad political support.

What a Shutdown Would Mean

The consequences of failing to pass a budget by December 31 would be severe and far-reaching. Without a spending plan in place, the city could not issue paychecks to its roughly 38,000 employees, including police officers, firefighters, and sanitation workers.

Critical services like trash collection, street maintenance, and building inspections would grind to a halt. The city’s bond rating could be downgraded, increasing borrowing costs for years to come. And the political fallout for Johnson, already facing criticism from both progressives and moderates, could be devastating.

“No one wants a shutdown,” said Alderman Pat Dowell (3rd), who chairs the Budget Committee. “But we need to have an honest conversation about how we’re going to pay for the services Chicagoans expect.”

The Business Community Weighs In

The Chicagoland Chamber of Commerce has led the opposition to the head tax, arguing it would put the city at a competitive disadvantage against suburban and out-of-state locations. Chamber president Jack Lavin testified at a recent budget hearing that several large employers have already threatened to relocate if the tax passes.

“Companies have choices,” Lavin said. “They can put jobs in Chicago, or they can put them in Schaumburg, or Indianapolis, or Austin. When you raise the cost of doing business here, some of them will choose to leave.”

Supporters of the tax counter that Chicago’s amenities—its talent pool, cultural attractions, and transportation infrastructure—make it an attractive location regardless of the head tax. They point to similar taxes in other major cities that have not triggered mass corporate exodus.

“This is fearmongering,” said Alderman Carlos Ramirez-Rosa (35th), a Johnson ally. “Big corporations have been threatening to leave Chicago for decades. They never follow through because this city offers something no suburb can match.”

A Settlement for the Wrongfully Convicted

In other council news, alderpersons approved a $15 million settlement for a Chicago man who spent 33 years in prison for a double murder he did not commit. The case represents one of the largest wrongful conviction settlements in city history and adds to Chicago’s substantial legal liabilities.

The payout, while not directly related to the budget fight, underscores the fiscal pressures facing the city. Chicago has paid out hundreds of millions of dollars in police misconduct settlements over the past decade, contributing to structural deficits that make each year’s budget process more contentious.

What Happens Next

The council’s alternative revenue package is expected to receive a committee hearing later this week, setting up a potential floor vote before Christmas. Johnson has not explicitly threatened to veto the measure, but his administration has signaled he would not sign a budget that relies solely on cuts and alternative taxes.

If the council passes a budget Johnson refuses to sign, the city would face a constitutional crisis with no clear resolution. The city’s Corporation Counsel is reportedly researching whether a vetoed budget could still take effect under certain circumstances.

For now, both sides are digging in, with the clock ticking toward what could be an unprecedented failure of city government.

“We’ve always found a way to get this done,” said Alderman Emma Mitts (37th), a veteran of numerous budget battles. “But I’ve never seen it this bad. We need some adults in the room.”