We want to share a brief update on the City of Chicago’s FY2026 budget and explain why—despite yesterday’s headlines—the City’s fiscal challenges are far from resolved.

Yesterday, Mayor Brandon Johnson announced that he will not veto the FY2026 budget, despite repeatedly threatening to do so throughout the process. For weeks, the Mayor publicly characterized the alternative budget as “morally bankrupt” and described at least one of its proposed revenue sources as a “dealbreaker.”

At his press conference, the Mayor—joined by Alderman Lamont Robinson and Chicago Teachers Union President Stacy Davis Gates—both celebrated the coalition that passed the budget and condemned the very policies it relies on, framing them as driven by corporate interests. While the Mayor will not veto the budget, he also refused to sign it. Essentially, a symbolic gesture that does not prevent the budget from becoming law.

How we got here

The City Council passed a revenue ordinance on Friday, December 19, followed by a spending ordinance on Saturday, December 20. Neither vote reached the super-majority required to override a mayoral veto, leaving Chicago in fiscal limbo until today.

The budget ultimately advanced over the Mayor’s objections, driven largely by opposition among aldermen to reinstating the corporate head tax—a central feature of the Mayor’s proposal that his administration refused to abandon even as the deadline approached.

What’s wrong with this budget

While the immediate crisis has been avoided, the underlying fiscal problems remain and in some respects have been made worse.

The FY2026 budget replaces the proposed corporate head tax with several unproven and highly uncertain revenue sources, including:

The sale of city-owned debt (projected to generate $90 million), and
A significant expansion of advertising on city-owned property (projected to raise $35 million).

These revenues depend on complex public-private partnerships that must be negotiated and executed within the next 12 months for the budget to remain balanced.

Critically, responsibility for executing these strategies now falls to an administration that has openly opposed them. That creates real uncertainty about whether these revenues will ever materialize. Today’s press conference only heightened that concern, as the Mayor announced plans to issue an executive order blocking the sale of certain city debt—an early signal that the administration may diverge from the very ordinances the City Council has passed.

The Mayor also described the budget as a “living document,” signaling that this debate is far from over. It is entirely possible that the Mayor and City Council will be forced back into negotiations as early as the first quarter of 2026. If these revenue sources fall short, City leaders will again face the same unresolved question: how to fund basic city services without deepening long-term instability.

Where we go from here

Chicago’s budget problems were not created overnight and they will not be solved by symbolism or wishful thinking. What we witnessed this month is not a sustainable plan. At best, it was a temporary truce.

Looking ahead, Leading a Better Chicago will continue doing the work City Hall has avoided: developing realistic, data-driven solutions to stabilize Chicago’s finances, restore credibility to the budget process, and move the City forward on public safety, education, affordability, and long-term growth.

As the year comes to a close, we ask for your help in continuing this work. Over the past year, we have convened academics, policy experts, civic leaders, and everyday Chicagoans including senior leadership from the Illinois National Guard, former Chicago Police Department leadership, representatives from the University of Chicago Crime Lab, and experts studying revenue solutions that have worked in other major cities. This work matters, and it takes resources.

Chicago has real strengths—and extraordinary talent—but those assets only matter if leaders are willing to confront reality and make disciplined, responsible decisions. We intend to help lead that conversation in 2026.

If you are able, please consider an end-of-year contribution to support this effort: leadingabetterchicago.com/donate-now

More to come.

Bill Quinlan

Founder, Leading a Better Chicago