Chicago’s 2025 Budget: A Closer Look at Increased Fees and Taxes
Chicago Mayor Brandon Johnson’s $17.1 billion budget, narrowly approved by the City Council, avoids a property tax increase but implements numerous fee and tax hikes to address a $982 million deficit. These measures, totaling an additional $170 million in revenue for 2025, fulfill Johnson’s promise to avoid city worker layoffs and cuts to essential services. While some vacant positions will remain unfilled, no current employees will lose their jobs. The budget also maintains various community and support programs, allocating $100 million for community safety initiatives (including a rapid rehousing program for gender-based violence victims, a domestic violence hotline, and a workforce development program for formerly incarcerated individuals), adding 1,000 summer youth jobs, and investing $40 million in expanding the homeless shelter network. However, a program providing monthly cash payments to low-income families has been eliminated due to budget constraints. Many alderpersons expressed dissatisfaction with the reliance on increased fees and fines rather than deeper cost-saving measures within city departments.
Several specific fee and tax increases are included in the budget:
* Plastic Bags: The tax on plastic bags will rise from $0.07 to $0.10 per bag, generating an additional $5.1 million. The city will collect $0.09, with retailers receiving $0.01 (down from $0.02).
* Rideshares: A $1.50 surcharge will be added to Uber and Lyft rides downtown between 6 a.m. and 10 p.m., seven days a week (currently, a $1.75 surcharge applies only on weekdays). This expansion is projected to yield $8.1 million. It remains unclear whether Uber and Lyft will absorb the increased cost or pass it on to riders.
* Streaming Services: The tax on streaming services will increase from 9% to 10.25%, adding approximately $0.19 per month to a standard Netflix subscription and contributing an additional $12.9 million to city revenue.
* Digital Goods: The tax on digital goods (software licenses, cloud storage, etc.) will rise from 9% to 11%, generating the largest increase in revenue at an estimated $128 million.
* Residential Parking Permits: Annual parking permits for those under 65 will increase to $30 in 2025 and $35 in 2026 (remaining at $25 for seniors). Replacement or zone change fees will also increase. These changes are expected to bring in an additional $940,000.
* Temporary Parking Permits: The cost of temporary parking permits will nearly double, from $8 to $15 per sheet of 15. This increase is projected to yield $1.5 million.
* City Sticker Replacements: The cost of replacing a city sticker will increase from $5 to $20 (unchanged for those 65 and older), adding $445,000 in revenue.
* Commercial Parking Taxes: The tax on commercial garage parking and valet services will increase to a flat 23.25% (currently tiered at 20% on weekdays and 22% on weekends), bringing in an estimated $11.3 million.
* Pedicab Licenses: The two-year license fee for pedicab drivers will increase dramatically, from $5 to $40, generating an additional $108,000.
* Wholesale Food Seller Licenses: The two-year license fee for wholesale food sellers will double, from $660 to $1,320, yielding an extra $155,000.
* General Licensing Violations: Fines for violating general licensing provisions will increase from $200-$1,000 to $400-$5,000, expected to generate $428,000.
* Public Chauffeur License Violations: Fines for violating public chauffeur license rules will increase from $50-$400 to $75-$1,000, contributing an additional $14,000.
* Utility Access Fees: A new $500 fee will be charged to utility companies for accessing public-way utilidors, along with fines ranging from $500-$5,000 for non-compliance. This is estimated to generate $1 million annually.
The budget passed by a 27-23 vote after extensive debate, ultimately removing proposed increases to alcohol taxes and garbage collection fees. The increased fees and taxes represent a significant shift in the burden of closing the city’s budget deficit onto residents and businesses.