Pritzker rules out Johnson's plan to tax financial transactions

CHICAGO - Illinois Gov. J.B. Pritzker put a big hole in Chicago Mayor-elect Brandon Johnson's controversial plan to raise taxes by $800 million.

Several of the levies on Johnson's wish list need approval from Pritzker and the Illinois General Assembly.

After meeting with Johnson for about an hour Friday, Pritzker ruled out Johnson's plan to tax financial transactions. Talk of it sent shudders through the city's business community.

By some estimates, the financial sector employs up to 100,000 workers directly and indirectly. Financial giant Citadel, led by billionaire Ken Griffin, recently left Chicago for South Florida.

"Obviously what we all want is a thriving financial services economy in the state and the city," Pritzker said.  "I have not stood for a transaction tax, because I think it would be easy for those companies' servers to move out of the state. But I do know that the challenge of finding a balance between expenditures and revenue is not lost on me. I came into a difficult situation."

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Leaders of the CME Group, for example, have reported setting up computerized trading locations outside Chicago.  With the figurative flip of a switch, they could begin executing transactions beyond the reach of City Hall’s tax collectors.

Mayor-elect Johnson, who campaigned on a promise to tax the "ultra-rich," defended his proposals.

"The budget plan that I proposed, you know, deals with the structural challenges that the city of Chicago has been facing. And, you know, the reliance on property taxes have left a lot of families in turmoil and despair," said Johnson.

Johnson promised during his campaign not to raise real estate property taxes.  He also laid out $2 billion in new city spending on programs, such as vast new mental health services, year-round youth jobs and a big round of new hiring for expanded services at Chicago Public Schools.

Pritzker declined to comment on other parts of Johnson’s tax increase plan, including a $100 million tax increase on aviation fuel at Chicago’s airports.  

That plan would reportedly require approval from the state and federal governments, as well as a sign-off from the airlines.