Mayor Brandon Johnson and aldermen got their 2025 city budget passed just under the wire — and just in time for Chicagoans to start paying more as the calendar flips to 2025 for the host of tax, fine and fee increases the city’s political leaders picked to balance the books.
The chaotic budget battle had its hard lines. Johnson refused to lower spending via broad layoffs and service cuts, and aldermen refused his property tax hike proposals.
So the city’s new spending plan finally came together in large part thanks to a series of smaller — and, theoretically, less politically toxic — hikes expected to bring in nearly $200 million next year. That bill is widespread, targeting everything from Netflix subscriptions and corporate cloud computing to drivers caught speeding by cameras and pedicab licenses.
“It was a matter of catching up in industries and other major cities,” said Johnson ally Ald. William Hall, 6th. “Chicago has to keep up with inflation, increases in industry costs and residential needs. And to do that, it costs money.”
The fee, fine and tax buffet City Hall settled on wasn’t the original plan. Johnson first proposed closing the city’s budget gap with a $300 million property tax increase. Aldermen quickly shot down the idea and then rejected two smaller property tax hikes Johnson also sought.
The mix City Hall settled on included a final batch of $23.6 million in “operational efficiencies” and modest staff cuts, plus several one-time fixes: $74 million in cuts to federal COVID-19 stimulus spending headlined by a dropped guaranteed basic income program, $16.5 million from “improved debt collection” and bond refinancing revenues used to plug the budget hole rather than pay off a $40 million outstanding debt.
Aldermen and the mayor also dropped some tax and fee proposals. The council nixed Johnson’s plan to hike taxes on wholesale liquor by 35% to raise $10.6 million. Black Caucus aldermen also successfully opposed higher garbage collection fees. A plan to tax legal hemp products went nowhere.
Still, Chicagoans will pay more in many ways to make city government run.
The personal property lease tax rate will rise from 9% to 11%. The bump — projected by Johnson’s Office of Budget and Management to bring in an additional $128 million each year — is by far the largest revenue-raiser going into effect.
The hike will mostly hit businesses, over 4,000 of which file for the tax, according to the OBM. The tax affects payments for cloud computing software, including many of the online work tools on which employees and companies increasingly rely.
In another tech-based bump, the tax on streaming services and cable TV will rise from 9% to 10.25% to bring in a projected $12.9 million. The hike will hit basic TV watchers and subscribers to services such as Netflix and Hulu. The tax was last increased in 2009, and the new hike brings the rate in line with the city’s sales tax, according to the OBM.
The budget also finds several vehicle-centric sources of revenue.
Johnson will expand Chicago’s network of automated speed cameras in an effort to ticket more drivers next year. His administration estimated the new cameras will bring in $11.43 million.
Like the over 100 such cameras already in operation, the cameras will issue $35 tickets to drivers going between six and 10 mph over the speed limit and $100 tickets for drivers going even faster. Though details remain murky about exactly how many new cameras will be added citywide, they will go “where aldermen want them,” around schools and parks “where there’s a danger” to residents, Hall said.
The tax rate on valet services and parking garages will rise from the 20% to 22% range currently in place to a single citywide rate of 23.25%, a boost that is expected to bring in $1.3 million annually. The change makes weekday and weekend costs the same “for ease of compliance,” the OBM said.
The cost for a sheet of 15 residential daily parking passes for street permit parking will rise from $8 to $15. The Johnson administration projects the change will bring in $1.5 million.
Similarly, the cost of adding residential permit parking to a Chicago vehicle sticker will rise from $25 to $30. The tax will increase again in 2026 to $35. The mayor’s team projects the change will bring in $940,000 in 2025. The fee hike will affect the 202,000 Chicago drivers who use the zone permits that allow many to park on neighborhood streets. But it will not apply to seniors, who will continue to pay $25.
The cost of transferring or reissuing a Chicago vehicle sticker will rise from $5 to $20. The change will not apply to seniors, who will continue to pay $5. The Johnson administration projects the change will bring in $445,000.
The cost of a two-year license for drivers of licensed taxis, liveries and pedicabs will increase from $5 to $40. The fee hike is projected to bring in $108,000 and does not include ride-share drivers, who are affected by other city regulations.
The city also increased the fines for such drivers who violate the license rules, such as by denying services based on discrimination or overcharging. Those fines will increase from a current range of $50 to $400 to a range of $75 to $1,000. The Johnson administration projects the hike will bring in $14,000.
In another automotive change, congestion surcharges on weekday downtown ride-shares will now also be applied to weekend rides from 6 a.m. to 10 p.m. The OBM expects the change to bring in $8.1 million.
But it’s not all bad news for riders: The rate of the surcharge will drop from $1.75 to $1.50. Aldermen had considered expanding the area affected by the surcharge, but ultimately did not widen the boundaries beyond the Near North Side, Near West Side and downtown.
In a change shoppers could notice, the city’s tax on grocery bags will rise from 7 cents to 10 cents. The Johnson administration projects the change will bring in $5.1 million.
The hike is the first to the city’s grocery bag tax since it went into effect in 2017. The city also will now keep a larger share of the dollars brought in by the tax. While retailers previously received 2 cents per bag to help with implementation, they will now get only a penny.
Chicago is installing new fees and fines affecting access to the utility tunnels beneath city streets. The fees will include a $500 right-of-way permit and $100-per-foot conduit fee, while non-compliance fines will range from $500 to $5,000. The Johnson administration projects the change will bring in $1 million.
The fee is, in part, an apparent attempt to better organize road and infrastructure work.
“The lack of coordination results in excessive pavement cuts and potential damage to the city’s surface and subsurface infrastructure,” the OBM wrote in a presentation shared with the Tribune.
The fine associated with violating general licensing provisions for businesses and occupations will rise from a range of $200 to $1,000 to a new range of $400 to $5,000. The Johnson administration projects the change will bring in $428,000. The fine increase will mostly affect corporate entities, according to the OBM. The current cost of complying with licenses cost $125 on average, a price close to the current minimum fine, the office said.
The cost of a two-year wholesale food license will rise from $660 to $1,320. The Johnson administration projects the change will bring in $155,000. The license is required for businesses that make, pack, distribute or store food, but the change will not impact restaurants, bars or grocery stores, according to the OBM. The fee hike brings the license cost in line with retail food establishments, the office said.
The budget also counts on Chicagoans paying $16.5 million in old tickets for vehicle and public way violations that occurred years ago. Johnson’s administration will allow residents to pay long-overdue tickets without paying their overdue penalties. The amnesty program will start in April and last around three months. It will affect vehicle violations for offenses such as parking and speeding, plus penalties involving overdue payments for commercial driveways and signs.
Bridging the gap may get even harder next year. Experts, credit rating agencies and aldermen alike have shared fears throughout the budget process that Chicago is failing to sufficiently address the structural issues in its finances.
Earlier this year, Johnson’s finance team projected a $1.12 billion budget gap for 2026, a figure that doesn’t account for fresh revenue lines and cuts to vacant positions in Johnson’s final budget. Though Budget Director Annette Guzman suggested earlier this month that the 2026 deficit was lower than that initial projection, she did not provide a range.
When the time comes for City Hall to close that budget gap, aldermen could face even more of the political pressure that led them to reject higher property taxes as their 2027 reelection efforts draw closer. They’ll also have fewer easier solutions to tap thanks to their recent budget efforts.
A continued effort to tax hemp products — possibly enacted at the state level with the support of Gov. JB Pritzker — or a bid to locally reinstate the state grocery tax set to soon sunset are likely parts of future budget-closing efforts. Johnson also has promised to search for ways to “challenge the ultra-rich to pay their fair share,” but shared few clear plans on how he might do so.
