CHICAGO CITY HALL (WBBM Newsradio) -- Chicago aldermen have started taking a closer look at Mayor Brandon Johnson's proposed budget for 2027, and in particular an increase for a tax aimed at businesses in the city.
The Chicago City Council Budget and Government Operations Committee began nearly two weeks of hearings Monday into the mayor's proposed $17.5 billion spending plan with testimony from the Johnson Administration's finance team, including interim budget director Jonathan Ernst, chief financial officer Ashlee Gabrysch and comptroller Michael Belsky.
One of the first items to come into focus is the Administration's proposal to increase the city's "personal property lease tax" (PPLT) from 15% to 20%. This is collected by the city on equipment that businesses rent or lease, and is often called the "cloud tax," because it covers business software leases.
The mayor's team says it expects that increase to bring in an additional $230 million, and Ernst told aldermen it's been overperforming for years.
"This is where the economy is moving towards," Ernst said.
However, Downtown Ald. Brendan Reilly noted it also includes things Chicagoans rent all the time: "a wet-vac rented to clean out a flooded basement, or on a bouncy house for a block party."
He later asked Ernst what items would be exempt from that increase.
"The rate will not be increased when leasing a vehicle," Ernst said, saying it'll stay at the current 15%.
"OK, well, I guess that's kind of good news," said Ald. Reilly (42nd Ward).
His Bridgeport colleague Ald. Nicole Lee asked whether a business will ultimately pay the tax.
"Who's actually paying that?" asked Ald. Lee (11th Ward).
"That is to be determined by the business themselves," Ernst responded, "but I would anticipate that would show up in the bill," acknowledging that it would likely be passed on to customers.
The city must enact a budget by December 31 to avoid a potential shutdown of government operations. Aldermen last year approved a budget with less than two weeks to spare, which took effect despite Mayor Johnson's decision not to sign it.
City Council hearings begin on proposed $17.5B budget
City Council hearings begin on proposed $17.5B budget
