Mayor Johnson asked 6th Ward alderperson William Hall to solicit ideas about how to fund the City of Chicago budget. The Chicago Tribune reported on these:

The Google [Forms] survey he included asked aldermen to respond “Yes” or “No” to the following ideas, with no added descriptions: “Sales Tax on Services; Property Tax (CPI Increase); Monthly/Wireless Plan Tax; Increase in LGDF Share; Head Tax; Alcohol Tax; Checking Bag Tax; Video Gaming Tax; Grocery Tax; City Sticker Increase; Congestion Tax; Income Tax Surcharge; Package Tax; Vacant Lot Tax; Ticket Reseller Amusement Tax; Enterprise Zones.”

I’ll briefly describe each one based on my own knowledge of these taxes. Note that these are possibilities and not suggestions.

  • Sales tax on services. Chicago doesn’t have a sales tax on most services (think haircut or tax preparation). (Chicago has a tax on some services, like the “Personal Property Lease Transaction Tax” which applies to services that use cloud computing, including Netflix!)
  • Property tax increase based on inflation. Mayor Lightfoot implemented this for a few years but Mayor Johnson did not renew it.
  • Wireless plan tax. This one confuses me because Chicago already taxes monthly cellular service.
  • Increase in LGDF share. LGDF is the State of Illinois local government distributive fund and the idea here is to convince the state legislature to increase the share that that the City of Chicago receives. Some data points that I think could be in favor of increasing the city’s LGDF share: Cook County receives back only 88% of what it contributes to state taxes (Paul Simon Public Policy Institute, page 37).
  • Head tax. This is a tax employers would pay for each employee they have. Mayor Emanuel and City Council phased out the head tax in 2014.
  • Alcohol tax. Chicago applies its own liquor tax, currently starting at $0.29 per gallon of beer up to $2.68 per gallon for anything containing 20% or more ABV.
  • Checking bag tax. I presume this refers to the existing Checkout Bag Tax, which is set at 7 cents per checkout bag sold at retail stores (the store can keep 2 cents of this to help subsidize the cost of the bag).
  • Video gaming tax. This would mean legalizing video gambling and taxing it.
  • Grocery tax. Governor Pritzker and the Illinois General Assembly eliminated the 1% grocery tax starting in 2025, revenues from which are distributed to municipalities. In return, the state allowed cities to implement their own grocery tax. Richard Day opines why it would be a bad idea for Chicago to implement such a regressive tax.
  • City sticker increase. A city sticker is a fee for the privilege of being able to park a car for free across much of the city.
  • Congestion tax. This would create a fee, surcharge, or tax for the privilege of driving a personal vehicle, and for the city to recover the costs and negative impacts, into the downtown area during specified times.
  • Income tax surcharge. I’m not sure what the surcharge means but Chicago currently doesn’t have an income tax.
  • Package tax. I don’t know what this means, but Hall told the Chicago Tribune that the package tax would “look at weights and distribution of packages that move throughout the city.”
  • Vacant lot tax. This would probably act as a kind of land value tax but would probably be implemented as an additional property tax on vacant lots (I assume any parcel that the county classifies as “1-00” would be eligible for this).
  • Ticket reseller amusement tax. Another tax that already exists; presumably this would be increasing the tax paid by people buying tickets for amusements (which includes concerts – you can see a list of all of the registered amusement tax businesses).
  • Enterprise Zones. I can’t make sense of this because Enterprise Zones are an existing state incentive area; there are six in Chicago. This “give” money (in the form of state sales tax breaks on construction materials and waiving the state’s portion of the real estate transfer tax in some situations) to property owners.
A vacant lot in Bronzeville. Land value tax would fix this.

Further reading

The Civic Federation came up with their own list of possible revenue sources and indicated if they require a state statute to authorize.