A majority of aldermen signed onto a letter Thursday objecting to reinstating Chicago’s head tax and other components of Mayor Brandon Johnson’s 2026 budget plan.

The 27 aldermen said they were “gravely concerned” about what Johnson’s pitch for a monthly $21-per-employee tax on larger companies would do for job growth and companies leaving Chicago. The city’s old head tax, phased out in 2014, was cast as the next frontier in the mayor’s largely-stalled tax-the-rich agenda, as he seeks to plug a $1.19 billion deficit in next year’s budget.

“We ask your administration to model alternative budget scenarios that exclude this jobs tax,” the letter says.

Other demands the aldermen laid out include asking the Johnson administration to look at more cuts, as identified by Ernst & Young after the city hired them this spring to look under the city’s hood to find more savings and efficiencies. The letter calls for representatives from the accounting firm to testify before City Council’s budget committee to explain why some recommendations were rejected.

Lastly, the City Council bloc says they were “very concerned” about further borrowing for operating expenses such as backpay for the new firefighters’ contract, saying that “we believe such practices undermine long-term fiscal stability.”

Johnson’s team said the city would issue a new bond to make good on $185 million owed in back pay to Chicago firefighters, a $90 million “global” payment to resolve misconduct claims against former Chicago police Sgt. Ronald Watts, among other legal settlements. While that frees up dollars in this year’s budget, it tacks on interest costs in future years — firefighter debt would be paid back over three years, city briefing documents said, and the settlements over five years.

The aldermen signing on were mostly mayoral opponents and moderates but also included Johnson’s handpicked Finance Committee chair Ald. Pat Dowell and Ald. Desmon Yancy, a member of the Progressive Caucus, which is supposed to be Johnson’s most ideologically aligned bloc.

Four of the signees on Thursday’s letter voted in favor of Johnson’s last budget, which eked by in a 27-23 vote: Alds. Dowell, Yancy, Gregory Mitchell and Stephanie Coleman.

Ald. Walter “Red” Burnett, who was handpicked by Johnson this year to assume his father’s former seat, also attached his name, an unusual break for a mayoral appointee to City Council.

A spokesperson for the mayor’s office didn’t immediately respond to request for comment Thursday morning about the letter.

Ald. Desmon Yancy, 5th, right, speaks to Ald. Pat Dowell, 3rd, during a housing committee meeting at City Hall on Sept. 24, 2025 (Eileen T. Meslar/Chicago Tribune)

Johnson introduced a $16.6 billion budget for next year that, besides reinstating a corporate head tax, scales back an extra pension payment and adds other taxes such as a new charge on social media tech giants. But it largely avoids layoffs and does not raise property taxes.

Other one-time tricks — a record $1 billion sweep of tax increment financing funds, refinancing old debt, borrowing money to pay for settlements and labor contracts and a continued hiring freeze — would help cover another significant chunk of the deficit.

The city’s business community immediately tried to put a kibosh on Johnson’s head tax proposal, rejecting the mayor’s framing that it would be an investment in fighting crime. His team has projected $100 million would be raised, going into a so-called “Community Safety Fund” to partly support some programs that are losing COVID-19 stimulus funds this year.

Johnson’s reaction? “Well, that sounds awfully unreasonable on the part of the business community, and their hard line against funding community safety … doesn’t really reflect the values of the city of Chicago,” he said during a Tuesday news conference.

The results of the initial $3.2 million contract with Ernst & Young were released after Johnson’s budget speech, recommending roughly 100 pages worth of nitty-gritty changes to internal city operations that the firm said could generate between $530 million and $1.4 billion in cost savings or new revenue.

While some updates to fines and fees could happen immediately, the report noted bigger cost-cutting proposals would take years to pull off.

The biggest potential cost saver — optimizing the city’s public safety departments — would take time and “require difficult decisions and complex implementation hurdles,” the report noted, not to mention political barriers.

Among them: cutting the number of firefighters per engine truck from 5 to 4; civilianizing certain fire and police jobs, including cops that perform traffic and parking management; and reducing the hours of the city’s 3-1-1 center from 24 down to 12 hours a day while introducing chatbots. Other tweaks to employee benefits and procurement could save another $200-$450 million.

The city is taking up a few recommendations already, like streamlining city operations and updating ordinances to recoup more money from event-holders for city assistance like road closures and CPD deployment. Ernst & Young recommended the city charge event-holders for estimated upfront costs, then charge a true-up to collect any remaining balance.

The city is also taking a closer look at two other recommendations: slimming its fleet of cars and real estate portfolio. The report noted Chicago’s cost-per-mile for ownership, fuel and services is often higher than the industry and government average and that there are more cars per city worker in Chicago government, suggesting the fleet is too big.

The report also found the city’s real estate portfolio might be underutilized and inefficient. The city could offload some of its office space — anywhere from 200,000 to 300,000 square feet — by encouraging more staff to work from home more often and earn millions from selling groups of city-owned vacant lots or city-owned properties in booming neighborhoods.

Among the costliest leases were a 50,000 square foot space at 231 S. LaSalle, which the city’s inspector general negotiated directly. The space includes 213 seats, but there are only 121 staff, “significantly above standard benchmarks.”