Chicago social media tax bringing in more than expected

CHICAGO CITY HALL (WBBM Newsradio) -- The city of Chicago's new tax on social media companies is bringing in more money than Mayor Brandon Johnson's budget team had expected, but the city's not spending it yet.

During the budget process at the end of last year, the mayor's budget team predicted the tax on social media platforms with more than 500,000 active users in the city would bring in about $31 million for a community public and mental health fund called the "Protecting Care Fund."

But city policy chief Jung Yoon told aldermen on the Finance Committee Monday that it's doing a bit better than that: "We have collected $16.4 million in the first four months. We're looking for just under $50 million for the year."

"And what was in the budget?" asked South side Ald. Nicole Lee (11th Ward).

"$31 million," Yoon responded.

But Yoon explained that the city's not using that fund to pay for any programs, in part because social media platforms are suing, claiming that the tax violates the First Amendment and the Internet Tax Freedom Act, among other issues. City leaders would not go into detail with aldermen about the arguments from social media companies.

North side Alderman Scott Waguespack wondered about the potential impact on the city.

"What happens if the firms or these companies sue us on top of whatever's being collected ... attorneys' fees and otherwise ... where is that coming from?" asked Ald. Waguespack (32nd Ward).

The Administration says it expects to prevail in court, and that it's not bringing in outside attorneys to defend the city.

Aldermen on Monday advanced the Administration's proposal to clarify parts of the law, which is now set to be considered by the full Council on June 17.