As a Chicago native, I have watched my home city unravel under the policies of Mayor Brandon Johnson and the ultra-left city council. Controlled by groups like the teachers’ union, the city has continued to spend lavishly on progressive causes and bloated pension funds while destroying its own economy. The city has a more than $1 billion budget gap, with a roughly $150 million deficit. Roughly, two-fifths of the budget is now going toward debt service and pension costs. The city council is following a familiar death spiral. It is turning to higher taxes against the very industries that it needs to drive the economy. That now includes a roughly 20 percent tourist tax on hotels. These politicians are doing what the Chicago fire failed to achieve: kill a major city.
Johnson has been pushing for irresponsible measures to grab cash now and pay later schemes. Johnson and the Chicago Teachers Union (CTU) lost a fight to secure a $200 million loan to avoid having to reduce the budget or staff. Johnson and the union pushed for a corporate “head tax.” Barely able to convince many companies to stay in the state, Chicago would actually make it more costly to hire Chicagoans with an additional $ 21-per-employee tax.
The city council just approved an $830 million borrowing plan to finance infrastructure projects by selling bonds. Notably, the council had to bar Johnson from giving the money to the teachers’ union, given his history of dependency on the union. However, the bond will now make the debt crisis even more acute. The bond agreement allows someone else to pay the massive accrued debt after 20 years.
Chicago now spends 40% of its money on debt servicing.
At the same time, Johnson has pushed for city-run grocery stores, and his government has stopped buying treasury bonds for political reasons.
Now, pursuant to Ordinance 2026-0022544, the city will raise the tax on hotel rooms within that district to 19% from 17.5%, which includes a combined city, county, and state tax, according to the Chicago Sun-Times.
The increase will apply to any hotels with more than 100 rooms.
Hotel costs are already prohibitively high, and the added tax hits the convention tourism side of the economy.
The editorial board of the Washington Post took note of Chicago’s worsening situation and wrote “it takes a long time to kill a city, and the bigger the city, the longer it takes.”
The city is following the same pattern of blue states driving businesses and high earners away. After taking control with Abigail Spanberger’s election, Virginia Democrats immediately pushed for a slew of new taxes and spending plans.
In New York, Gov. Kathy Hochul, who during her campaign told wealthy New Yorkers to “just jump on a bus and head down to Florida where you belong, OK?” She added, “Get out of town. Because you do not represent our values. You are not New Yorkers.”
They took her advice in droves. Now she is bewailing that her tax base is collapsing. This week, she asked “high-net-worth” people to support the “generous social programs we want to have in our state” and go to Florida to “see who you can bring back home, because our tax has been eroded.”
The point is to preserve the “generous social programs” by asking people to come back who fled due to the high taxes needed to support such programs.
New York City, which is pushing for higher taxes, currently has a $115.9 billion budget for 8.48 million people. That is almost as much as the $117.4 billion budget for the entire state of Florida with 23.3 million people.
This week, a study showed that New York is now spending $81,000 per homeless person in a town where the average take-home pay is $40,600. It is projected to increase to nearly $97,000 in the coming year.
From Chicago to New York City, Democratic leaders continue to spend wildly as top earners and employers flee. They are quickly learning that, as Margaret Thatcher noted, it works until you run out of other people’s money.
In Chicago, the city council is now drifting toward bankruptcy like a ship of fools. For those of us who love our home city, it is a painful thing to watch. Despite a history of corruption under the Daley machine, the city was always a pro-growth town that attracted industries. It is now following Detroit’s path toward insolvency as politicians kick the debt can down the road for someone else to pay.
