Chicago’s 2025 Budget: A Look at the New Fees and Taxes
Chicago Mayor Brandon Johnson’s $17.1 billion budget, narrowly approved by the City Council, avoids a property tax increase but introduces several new fees and taxes to address a $982 million deficit. These measures, totaling an additional $170 million in revenue for 2025, fulfill Johnson’s promise to avoid layoffs or service cuts. The budget maintains funding for community programs, including $100 million for community safety initiatives (such as a rapid rehousing program for gender-based violence victims and a workforce development program for formerly incarcerated individuals), 1,000 additional summer youth jobs, and $40 million to expand the homeless shelter network. However, a program providing monthly cash payments to low-income families was eliminated due to budget constraints. Despite $460 million in identified “efficiencies,” many alderpersons expressed dissatisfaction with the reliance on increased fees and taxes. The budget passed 27-23 after weeks of negotiations.
Here’s a breakdown of the new and increased fees and taxes:
Transportation:
* Rideshares (Uber/Lyft): A $1.50 surcharge will apply to all rides downtown between 6 a.m. and 10 p.m., daily. This expands the existing weekday surcharge and lowers the current rate by $0.25. The estimated increase in revenue is $8.1 million.
* Pedicabs: The two-year license fee for pedicab drivers will increase from $5 to $40, a 700% increase, generating an additional $108,000.
Environmental and Retail:
* Plastic Bags: The tax on plastic bags will increase from $0.07 to $0.10 per bag. The city will collect $0.09, with retailers receiving $0.01. This is projected to yield an additional $5.1 million.
Digital and Technology:
* Streaming Services: The tax on streaming services will rise from 9% to 10.25%, adding approximately $0.19 per month to a standard Netflix subscription and generating an estimated $12.9 million.
* Digital Goods: The tax on digital goods (software licenses, cloud storage, etc.) will increase from 9% to 11%, expected to generate the largest revenue increase at $128 million.
Parking and Licensing:
* Residential Parking Permits: The annual permit fee for those under 65 will increase to $30 in 2025 and $35 in 2026 (seniors remain at $25). Replacement permits will cost $20 (except for seniors at $5). This is projected to generate an additional $940,000.
* Temporary Parking Permits: The cost of temporary parking permits will almost double, from $8 to $15 per sheet of 15 permits, adding $1.5 million in revenue.
* City Vehicle Stickers: Replacing a city vehicle sticker will cost $20 (except for seniors at $5), generating an additional $445,000.
* Commercial Parking: The tax on commercial parking will increase to a flat 23.25%, eliminating the tiered weekday/weekend rates. This is estimated to bring in an extra $11.3 million.
* Wholesale Food Sellers: The two-year license fee for wholesale food sellers will double, from $660 to $1,320, adding $155,000 in revenue.
Fines and Fees:
* General Licensing Violations: Fines for violating general licensing provisions will increase from $200-$1,000 to $400-$5,000, yielding an additional $428,000.
* Public Chauffeur License Violations: Fines for violating public chauffeur license rules will increase from $50-$400 to $75-$1,000, adding $14,000 in revenue.
* Utility Access Fees: A new $500 fee will be charged to utility companies for accessing public-way utilidors, plus fines of $500-$5,000 for non-compliance. This is expected to generate about $1 million annually.
The budget, while addressing the city’s financial challenges, has sparked debate regarding the fairness of shifting the burden onto residents through increased fees and taxes.