A defiant Chicago City Council unanimously rejected Mayor Brandon Johnson’s proposed $300 million property tax increase Thursday, as onlookers shouted “Thank you, aldermen” from the public gallery of the town hall.

The vote sends the mayor back to the drawing board on how to create a balanced budget that avoids layoffs or furloughs, which Johnson says he won’t accept. Aldermen and the mayor are currently in negotiations over a series of small tax or fee increases across the board on things such as streaming services, alcohol or trash collection in order to avoid or reduce a increase in property tax.

These negotiations over smaller increases came after Johnson faced rapid pushback on his $300 million property tax proposal, which he announced in late October. It became clear to the mayor’s office that the proposal would not garner the necessary votes, and council members decided to reject it as soon as possible.

“The City Council is responding to the fatigue of our residents,” said Ald. Carlos Ramirez-Rosa, 35th room. “Today’s vote reflects the frustration felt in our communities from our landlords, our property owners who are struggling to keep up.”

Ald, Chairman of the Budget Committee. Jason Ervin, of the 28th District, said he predicts there will be some increase in property taxes this year, even if it’s not as big as Johnson hoped.

“I think it’s probably going to be necessary to have something, because the other part of it is we have structural revenue issues and if they’re not addressed we’re going to find ourselves in this situation year after year. ” said Ervin.

Ald. Andre Vasquez, of the 40th District, said it was clear Johnson didn’t have the votes in his favor, and “if you can’t stop him, you might as well get out of the way.”

“What we’re seeing, I think, is that, from one term to the next, the board has become more independent. And I think that’s a good and healthy thing,” Vasquez said. “We just have to go through the exercise of knowing what the budget will look like at the end of the day. Because whether you are mayor or municipal councilor, we all have an interest in seeing this problem resolved before the end of the year.”

Property tax increases are always voted on separately from the spending plan, but that vote usually takes place around the same time as the overall budget vote.

“As I have said from the beginning, I will negotiate the details of this budget, but I certainly will not negotiate my values,” Johnson said before the vote.

The mayor’s proposed property tax increase has been the main sticking point at budget hearings so far, including from council members across the political spectrum and interest groups outside of the town hall.

Jeff Baker, CEO of Illinois Realtors, said any property tax increase would worsen the housing crisis and be “a slap in the face to all of Chicago.” A political action committee organized by the group raised more than $1.5 million earlier this year to oppose a referendum that would have increased a tax on the sale of high-end properties to fund homelessness prevention -shelter.

Johnson and city council members are negotiating alternatives to the $300 million property tax increase. A slew of tax increases on the sale of property, repurposing unspent federal aid dollars, or decreasing or eliminating an advance pension payment are some of the ideas on the table, the Chicago Sun-Times reported.

But some of these avenues are already facing rapid pushback, amid concerns about the impact of tax increases on the pocketbooks of residents and businesses.

Raising taxes on cigarettes, alcohol, shopping bags and bottled water would lead to a “self-defeating budget” by pushing residents to vote with their feet and shop outside the city, said Rob Karr, president and CEO of the Illinois Retail Merchants Association.

Karr cited the short-lived “soda” tax on sugary drinks in Cook County as evidence. A UIC study found purchases of taxed drinks decreased by 21%, with an increase in cross-border purchases. In the long term, the neighborhood’s development is at risk, Karr said.

“It’s all about disposable income, and when you take that away, you discourage open stores from surviving and others from expanding,” Karr said. “So it’s a really terrible economic development approach for the city, and it’s certainly a bad economic approach for the city’s consumers.”

Other tax increases being considered include increasing the personal property rental tax on cloud computing, increasing trash collection fees and increasing the entertainment tax on streaming services. who was the subject of prosecution when it was first applied in 2015.

Michael Glasser, president of the Neighborhood Building Owners Alliance – another group that opposed the Bring Chicago Home referendum – said: “While the trash fee increase may seem like a small thing, it is yet another obstacle for hard-working families who provide natural products. affordable housing. »

Some aldermen are pushing the administration to consider other solutions.

“We try not to tax workers. To me, waste taxes – just like a property tax – would hurt workers. So, I suggest things that may be difficult but achievable,” Ald. Byron Sigcho Lopez, 25th Ward, said Tuesday.

Sigcho Lopez, a close progressive ally of Johnson, was quick to said he couldn’t stand a budget with an increase in property taxes. He instead pushed the administration to reduce the $272 million early pension payment.

Budget officials warned that it would damage the city’s reputation with credit rating agencies and lead to higher pension bills down the road. But faced with limited options for closing the nearly $1 billion budget shortfall, budget watchdogs like the Civic Federation have recommended the city consider forgoing the payment next year. Sigcho Lopez said the city could reduce next year’s payment while advocating state law over recent voter approval to raise the Illinois millionaires tax to fund the relief property tax.

“We’re not going to throw the ball down the road,” Sigcho Lopez said. “We develop responsible solutions, in search of income. »

Ramirez-Rosa also said the City Council should consider cutting the Chicago Police Department’s budget, using federal aid funds to balance the budget as a one-time solution and, ultimately, urging State lawmakers to give the city more options for generating revenue.

“Ultimately, in the long run, if that’s how our communities feel, then we need to raise our voices in Springfield to say, ‘Give us more options.’ Give us alternatives,” Ramirez-Rosa said. “Because right now, the only real solution the city has to structurally and long-term correct our revenues is property taxes.”

The council must adopt a budget before December 31.

Tessa Weinberg and Mariah Woelfel cover Chicago City Hall for WBEZ.