Brace Yourself: Mayor Johnson’s Budget Hikes Take Effect in Chicago!
The clock was ticking, and Mayor Brandon Johnson, alongside city aldermen, just managed to get the 2025 budget approved right before the deadline. As we usher in 2025, Chicagoans brace themselves for a wave of tax, fine, and fee increases designed to keep the city’s financial ship afloat.
The budget negotiations were nothing short of tumultuous. Johnson stood firm against sweeping layoffs and drastic service cuts, while aldermen were equally resolute in shooting down his proposals for property tax hikes. The result? A budget plan that relies on a variety of smaller, yet pervasive, increases anticipated to rake in nearly $200 million next year.
“We’re catching up to what other major cities are doing,” noted Alderman William Hall, a close ally of Johnson. “With rising inflation, increasing industry costs, and essential community needs, it all requires a financial commitment.”
What the city ultimately settled on was a mixed bag of fees and taxes—a far cry from the hefty $300 million property tax increase initially proposed by Johnson. That idea was swiftly rejected, followed by two additional attempts at smaller property tax increases that also fell flat.
The new plan includes $23.6 million from “operational efficiencies” and minor staff reductions, along with a series of one-time fixes: a whopping $74 million cut from federal COVID-19 stimulus spending, $16.5 million slashed from improved debt collection efforts, and bond refinances that will be used to plug the budget gap instead of addressing a $40 million outstanding debt.
While some tax and fee proposals were scrapped—like a hefty 35% increase on wholesale liquor taxes and higher charges for garbage collection—Chicagoans will still see their wallets lighten in many areas to keep the city running smoothly.
One of the most significant changes is the rise in the personal property lease tax rate from 9% to 11%. Johnson’s Office of Budget and Management estimates this will generate an extra $128 million annually, primarily hitting businesses that file for the tax—impacting everything from cloud computing services to essential online tools that are increasingly vital for daily operations.
Streaming enthusiasts, take note! The tax on your favorite services, like Netflix and Hulu, will climb from 9% to 10.25%, potentially adding up to $12.9 million to city coffers. This tax hike is the first adjustment since 2009, aligning the rate with the city’s sales tax.
Vehicle owners won’t be spared either. The expansion of automated speed cameras is on the horizon, intended to ticket more drivers and generate an estimated $11.43 million for the city. New cameras will be strategically placed around schools and parks, ensuring safety while contributing to city revenue.
Parking rates are also seeing a shake-up: the valet and parking garage tax will increase to a new citywide rate of 23.25%, generating an estimated $1.3 million annually. Plus, if you need a sheet of residential daily parking passes, the cost will jump from $8 to $15, while the fee for adding residential permit parking to a Chicago vehicle sticker will rise from $25 to $30, with projections showing an additional $940,000 in city revenue.
For those transferring or reissuing vehicle stickers, expect a hike from $5 to $20—a move expected to bring in $445,000. The cost for a two-year taxi, livery, or pedicab license will soar from $5 to $40, generating an estimated $108,000.
As part of the broader automotive changes, congestion surcharges will now also apply to weekend ride-shares, bringing in an expected $8.1 million. The good news? The surcharge rate will decrease from $1.75 to $1.50, a small silver lining for weekend warriors.
And don’t forget about the grocery bag tax—it’s going up from 7 cents to 10 cents, potentially adding $5.1 million to the city budget.
Chicago is also diving into new territory with utility tunnel access fees. This includes a $500 right-of-way permit and a conduit fee of $100 per foot, with fines ranging from $500 to $5,000 for non-compliance, projected to generate $1 million as the city aims to streamline infrastructure work.
Businesses are feeling the pinch too, as the fines for violating general licensing provisions will increase significantly—from $200-$1,000 to a new range of $400-$5,000, likely affecting corporate entities more than small businesses.
As the city looks ahead, Chicagoans will soon be able to settle long-overdue vehicle and public way violation tickets without the penalty fees during a special amnesty program launching in April.
But as we move forward, challenges loom large. Experts and city officials alike worry that Chicago isn’t adequately addressing its long-standing financial issues, with projections of a staggering $1.12 billion gap on the horizon for 2026. The path ahead could require even tougher decisions, especially as election season approaches and political pressures mount.
Keep an eye out, Chicago! Change is coming, and how city leaders navigate these financial waters will shape our communities for years to come.
