A Transparent Budgeting Process

Why Chicago needs a Small Business Bill of Rights (part three)

September 9, 2026 Abigail Nguyen and Sam McLain

Last December, Chicago’s budget vote took place in the shadow of an impending government shutdown. To balance the budget, Mayor Johnson proposed several controversial revenue measures, including a corporate “head tax” that dominated headlines and drew major pushback from most of the City Council. A dramatic increase in the cost of two-year business licenses was lost in the shuffle. The city doubled its limited business license fee from $250 to $500 and quadrupled its regulated business licensing fee from $250 to $1,000. These elevated fees did little to reduce Chicago’s significant deficit.

Chicago’s budgeting process often harms small businesses without giving them the chance to make their voices heard. Chicago needs greater budget transparency and an end to last-minute changes that hurt small businesses.

Budget Transparency

The City Council Office of Financial Analysis (COFA) is under-resourced and struggles with timely financial analysis. The office has just five full-time staff members. COFA’s resources stand in stark contrast to robust counterparts in peer cities, such as the New York City Independent Budget Office (IBO), which has 35 staff members.

In other cities, the budget office serves as a meaningful check on the executive branch, encouraging transparency and accountability. The NYC comptroller (who, unlike in Chicago, is elected rather than appointed by the mayor) and public advocate (also elected) jointly appoint 10 representatives of diverse backgrounds to the IBO advisory committee. For example, they must include at least one nationally recognized expert in budget theory and budget processes, one economic advisor for a labor union, and one former officer of a human services advocacy organization involved in budgetary matters. The IBO evaluates the mayoral budget, analyzes policy, and educates the public. This gives New York’s City Council and business owners access to independent financial data.

Checks on Philadelphia’s budget process are particularly strong. The Pennsylvania Intergovernmental Cooperation Authority’s (PICA) governing board consists of five voting members and two ex-officio non-voting members. The Governor, the President pro tempore of the Senate, the Minority Leader of the Senate, the Speaker of the House of Representatives, and the Minority Leader of the House of Representatives each appoint a voting Board Member. Board members serve two-year terms.

Under the governing board’s oversight, PICA publishes quarterly reports on Philadelphia’s financial status and can reject the city’s 5-year plan if it is unbalanced, blocking certain state funding until the city makes revisions.

Chicago lacks similar independent checks on its budgeting process.

Last-Minute Changes

Chicago requires one public hearing on the budget between the mayor’s budget proposal (October 15) and the budget deadline (December 31). While the city is free to host more public engagement, they are not required to do so. Since failing to pass the budget results in a government shutdown, policymakers face immense pressure to meet the deadline and little incentive to take public input. This leaves small businesses vulnerable to last-minute changes.

Chicago’s city council has two-and-a-half months to negotiate the mayor’s proposed budget; New York City has six months, provides numerous opportunities for public input, and has no shutdown pressure. NYC’s mayor releases a budget proposal in January, and the city requires each of the 5 borough boards and the city council to conduct public hearings about the proposal to gather regional and city-wide feedback. New York adopts a budget by its target deadline, June 5. If New York cannot pass its budget by a final deadline of June 30, the prior year’s budget simply rolls over until a new one is finalized, eliminating the possibility of a shutdown.

What Needs to Change

Article 5 of the Chicago Small Business Bill of Rights advocates for budget transparency and preventing last-minute changes from harming small businesses.

Increased budget transparency will prevent small businesses from catching the short end of the stick when the city looks for revenue. Reshaping the budget process to prioritize the public interest rather than a fast timeline will empower small businesses and the aldermen representing them. Chicago must pass the Small Business Bill of Rights and create a more equitable budgeting process.