‘Chicago Has Lost Its Mind’: Explosive Taxes, No Answers, Fiscal Doom Looms

Paul Riverbank, 12/16/2025Chicago’s budget woes escalate as pandemic funds dry up, new taxes stir backlash, and pension liabilities loom. With leadership divided and tough choices deferred, the city faces more than harsh headlines—its financial future hangs in the balance.

Much of this upsurge, if we’re candid, rode the wave of federal pandemic aid. Those once-flowing dollars propped up City Hall’s ambitious plans, but with that pipeline shut, Chicago must now face a gaping $1.15 billion deficit in the budget’s floorboards—no COVID bailout in sight.

The mayor, Brandon Johnson, hasn’t exactly shied away from proposing solutions. His plan reads less like a fresh manuscript and more like pages ripped from well-thumbed playbooks: a tax spike on leased goods—think computers, cars, software—up from 11% to 14%, and a revived head tax, which would see large employers forking over $33 each month per worker. Critics from all corners, including the Post’s own board, have been quick to pounce, warning of stifled business growth and a chilly employment outlook. Their argument is that hiking costs in a city already battling flatlining job forecasts—just ask the Fed economists—risks sending investment running for the exits.

In press encounters, Johnson hasn’t flinched. He points to groups like the Civic Federation, which in an odd twist have sometimes endorsed his “safety surcharge” as plausible, if imperfect. “There is no empirical evidence,” Johnson insisted recently, “that these taxes on the largest corporations would somehow kneecap local job creation.” Still, just because the mayor says so doesn’t mean the public agrees—in fact, most voters, according to recent surveys, are turning up their noses at his proposal.

Inside the city council, tension simmers. Several aldermen, wary of piling fresh taxes onto payrolls, have floated counterproposals. Their preferred medicine? Scrap the head tax and set aside any thought of borrowing, instead boosting fees on garbage collection and slapping additional levies on liquor, delivery services, and ride-shares. Yet Johnson’s drawn his own battle lines, threatening a mayoral veto if trash fees are raised—a line in the sand that hints at the delicate political calculus behind every nickel and dime.

Old wounds keep bleeding, too. The aftershocks from 2008’s infamous parking meter deal—a fire sale where decades of future revenue were traded away for quick cash—make many residents wary of short-term budget “fixes.” The list of fiscal bandages grows: hiring freezes here, reallocated funds there, money scrubbed from pension payments elsewhere. The ghosts of previous miscalculations move quietly through every new budget draft.

But it’s pensions—the deep, tangled roots of the city’s fiscal malaise—that truly threaten Chicago’s future. Recent changes at the state level, including a new law boosting police and firefighter pension benefits, have pushed funding ratios beneath 18%, setting off alarm bells in budget offices citywide. When a routine technical hiccup last fall delayed property tax distributions, the city had to scramble for extra cash just to meet firefighters’ payroll. Austin Berg, a longtime city watcher, put it simply: that was a glimpse of what outright insolvency looks like.

As if that weren't enough, controversy flared when City Treasurer Melissa Conyears-Ervin announced she would halt investments in U.S. Treasuries—a protest against what she termed the “authoritarian regime” of former President Donald Trump. Editorial boards, true to form, bristled at the decision. “The purpose of a city portfolio is to meet obligations, not to make partisan statements,” they argued in a reprimand that echoed through City Hall.

For all the proposals and protestations, neither Johnson nor his critics have yet produced a blueprint to close the budget gap without demanding real sacrifice. S&P’s recent downgrade to a “negative” credit outlook sends its own warning; if political leaders keep reaching for sugar-high fixes, the reckoning when it comes could be harsh and sudden.

Chicago isn’t confronting a mess born overnight, nor can one mayor alone shoulder the blame. Consequences, after years of sidestepping hardship, are coming due. The headlines might sting, but the harder truth is that without true structural reform, Chicago’s next budget headlines won’t be tabloid fodder—they’ll be warnings of a city in crisis, searching for answers as the bills pile up one after another.

Chicago’s budget nightmares rarely keep quiet for long, and this year’s alarms come with a fresh sense of dread. Not often does the world notice local city finances, but The Washington Post’s recent headline—“Chicago has lost its mind”—reverberated far beyond newsroom banter. The sentiment lands with a thud: city spending has surged by nearly 40% since 2019, a figure that stuns even the most seasoned policy hands.Much of this upsurge, if we’re candid, rode the wave of federal pandemic aid. Those once-flowing dollars propped up City Hall’s ambitious plans, but with that pipeline shut, Chicago must now face a gaping $1.15 billion deficit in the budget’s floorboards—no COVID bailout in sight.The mayor, Brandon Johnson, hasn’t exactly shied away from proposing solutions. His plan reads less like a fresh manuscript and more like pages ripped from well-thumbed playbooks: a tax spike on leased goods—think computers, cars, software—up from 11% to 14%, and a revived head tax, which would see large employers forking over $33 each month per worker. Critics from all corners, including the Post’s own board, have been quick to pounce, warning of stifled business growth and a chilly employment outlook. Their argument is that hiking costs in a city already battling flatlining job forecasts—just ask the Fed economists—risks sending investment running for the exits.In press encounters, Johnson hasn’t flinched. He points to groups like the Civic Federation, which in an odd twist have sometimes endorsed his “safety surcharge” as plausible, if imperfect. “There is no empirical evidence,” Johnson insisted recently, “that these taxes on the largest corporations would somehow kneecap local job creation.” Still, just because the mayor says so doesn’t mean the public agrees—in fact, most voters, according to recent surveys, are turning up their noses at his proposal.Inside the city council, tension simmers. Several aldermen, wary of piling fresh taxes onto payrolls, have floated counterproposals. Their preferred medicine? Scrap the head tax and set aside any thought of borrowing, instead boosting fees on garbage collection and slapping additional levies on liquor, delivery services, and ride-shares. Yet Johnson’s drawn his own battle lines, threatening a mayoral veto if trash fees are raised—a line in the sand that hints at the delicate political calculus behind every nickel and dime.Old wounds keep bleeding, too. The aftershocks from 2008’s infamous parking meter deal—a fire sale where decades of future revenue were traded away for quick cash—make many residents wary of short-term budget “fixes.” The list of fiscal bandages grows: hiring freezes here, reallocated funds there, money scrubbed from pension payments elsewhere. The ghosts of previous miscalculations move quietly through every new budget draft.But it’s pensions—the deep, tangled roots of the city’s fiscal malaise—that truly threaten Chicago’s future. Recent changes at the state level, including a new law boosting police and firefighter pension benefits, have pushed funding ratios beneath 18%, setting off alarm bells in budget offices citywide. When a routine technical hiccup last fall delayed property tax distributions, the city had to scramble for extra cash just to meet firefighters’ payroll. Austin Berg, a longtime city watcher, put it simply: that was a glimpse of what outright insolvency looks like.As if that weren't enough, controversy flared when City Treasurer Melissa Conyears-Ervin announced she would halt investments in U.S. Treasuries—a protest against what she termed the “authoritarian regime” of former President Donald Trump. Editorial boards, true to form, bristled at the decision. “The purpose of a city portfolio is to meet obligations, not to make partisan statements,” they argued in a reprimand that echoed through City Hall.For all the proposals and protestations, neither Johnson nor his critics have yet produced a blueprint to close the budget gap without demanding real sacrifice. S&P’s recent downgrade to a “negative” credit outlook sends its own warning; if political leaders keep reaching for sugar-high fixes, the reckoning when it comes could be harsh and sudden.Chicago isn’t confronting a mess born overnight, nor can one mayor alone shoulder the blame. Consequences, after years of sidestepping hardship, are coming due. The headlines might sting, but the harder truth is that without true structural reform, Chicago’s next budget headlines won’t be tabloid fodder—they’ll be warnings of a city in crisis, searching for answers as the bills pile up one after another.