Mayor Brandon Johnson has unveiled a 2026 budget plan for Chicago that introduces an innovative Social Media Amusement & Responsibility Tax (SMART) aimed at large social media entities. Devised to partially alleviate a projected $1.12 billion city deficit, the tax proposes to charge companies like Meta, owners of platforms such as Facebook and Instagram, a fee of $0.50 monthly per active user, exempting the first 100,000 users, as reported by NBC Chicago. The revenue is estimated to generate $31 million and will directly fund expanded mental health services in response to mounting evidence of social media's negative impact on mental health.
The mayor’s team is prepared to take on any legal challenges that might arise from this first-in-the-nation social media-based tax. In an address to the city council, and as observed by ABC 7 Chicago, Johnson laid out the "Protecting Chicago Budget," aiming to strategically respond to federal funding cuts and the upcoming expiration of pandemic aid, which have contributed to the deficit. Alongside SMART, Johnson’s fiscal strategy includes several new and increased taxes, like the revival of a corporate head tax on large companies, a vacant buildings fee hike, and new excises on hemp, boat mooring, and online sports betting.
No stranger to taking jabs at the Trump administration, Johnson attributed part of the city’s financial woes to policies from that era, stressing that the ultra-rich need to "put more skin in the game," according to the mayoral statement obtained by NBC Chicago. The budget plan conspicuously avoids raising property taxes or garbage collection fees, following a unanimous city council rejection of a property tax hike proposal the previous year.
"The budget is really designed to challenge our larger corporations and those with means to put more skin in the game," Mayor Johnson told reporters in a narrative obtained by NBC Chicago. Further expanding upon revenue plans, the budget includes a $100 million Community Safety Fund to support violence prevention and summer youth jobs, possibly funded by a corporate community safety surcharge. Additionally, Johnson hopes to declare the largest Tax Increment Financing surplus in Chicago's history, earmarking it for public institutions, such as schools and libraries.
While the mayor’s budget has received commendation from the Progressive Caucus for its innovative approach to increasing funding for mental health and community safety programs, the business community has lashed out. Jack Lavin from the Chicagoland Chamber of Commerce criticized the plans as "job-killing taxes" in his statement to ABC 7 Chicago. He advocated for the creation of jobs as the best solution for fiscal deficits, not further taxation on businesses. The mayor's proposals now rest with the city council, where members have until year’s end to negotiate changes before it needs 26 votes to pass.
