Illinois Legislative News: October 27, 2025
Third Reading Consulting Group
In his $16.6B 2026 budget proposal, Chicago Mayor Brandon Johnson proposed resurrecting the city’s head tax to help close a projected $1.15B budget shortfall. This tax would charge businesses with at least 100 employees, entirely or primarily based in Chicago, a fee of $21 per person per month. The proposed fee, which would affect roughly 3% of businesses in Chicago, is estimated to generate $100M in new annual revenue. Revenues from the head tax would be used to help close the city’s budget deficit and to provide a long-term and stable funding source for the Community Safety Fund.
Chicago previously had a long-standing head tax of $4 per employee per month on businesses with more than 50 employees who worked at least half of their hours in Chicago, before it was eliminated in 2014 under then-Mayor Rahm Emanuel.
Gov. JB Pritzker, along with business groups and some alderpeople, came out against the head tax. The governor is “absolutely, four-square opposed” to the tax, saying it would penalize business growth in Chicago. “It penalizes the very thing that we want, which is more employment in the City of Chicago,” said Gov. Pritzker. He believes the tax would make it harder to attract and retain businesses in Chicago, which is an area of concern for a state that is still recovering from the impacts of a two-year budget impasse under then-Governor Bruce Rauner. Pritzker agrees that the $1.15B projected Chicago budget deficit is an issue that must be addressed but suggests making up the deficit by weeding out inefficiencies in city government and not a head tax.
The General Assembly returns this week for the final week of the fall veto session. Lawmakers are still negotiating several major omnibus bills, including a sweeping energy package and a possible transit funding plan. With the clock winding down, it’s unclear whether these big-ticket items will get resolved before adjournment or be pushed to the January session.
Important Upcoming Dates – Statewide
October 28-30 – Veto Session Week 2