In the wake of a turbulent mayoral race, Chicago’s newly elected progressive mayor, Brandon Johnson, faces the daunting task of revitalizing the city’s tarnished reputation, but his proposed tax hikes have already triggered concern among businesses, leading some to consider relocating elsewhere.
Johnson’s victory over Paul Vallas, the former Chicago school CEO, has raised eyebrows among business leaders like CME Group Inc., who express discontent with the proposed tax increases. Terry Duffy, CEO of the largest financial derivatives exchange in the US, voiced his displeasure with Johnson’s tax plans during a recent podcast, signaling potential resistance from affluent earners and companies headquartered in Chicago.
Intended to address the city’s financial struggles, the tax hikes target well-off individuals and corporations based in the Windy City. However, as evidenced by CME’s reaction, these groups are likely to put up a political fight.
As Johnson assumes office, he faces a myriad of challenges, including the implementation of tax increases and the need to provide shelter for an influx of refugees during the summer months, when violent crime typically surges.
Duffy, whose company oversees the Chicago and New York stock exchanges and boasts an estimated worth of $66 billion, sarcastically criticized Johnson’s plans, urging the mayor to prioritize combating the city’s crime crisis instead of focusing on flawed short-term strategies.
The CEO made it clear that CME, along with other companies like Tyson, Caterpillar, and Boeing, is prepared to relocate if Johnson fails to heed their warnings. Duffy’s remarks came just 24 hours before Johnson’s inauguration, during which the former Chicago schoolteacher would succeed his similarly progressive predecessor.
Amid criticism of Lori Lightfoot’s tenure and the city’s ongoing struggles exacerbated by the pandemic, Johnson assumes office against a backdrop of rising crime and growing dissatisfaction. Lightfoot faced backlash for cutting $59 million from the Chicago Police Department’s budget in the midst of calls to defund the police. Although Johnson supports this movement, officials from both parties criticized the resulting “lawlessness” under Lightfoot’s leadership.
Lightfoot, who gave herself a 5% increase in salary while already earning over $200,000, failed to effectively address the city’s chronic gun violence. Despite initially supporting the “defund the police” campaign, Lightfoot later reversed her position and increased salary standards for several positions, including her own.
Chicago witnessed its highest murder rate since the mid-1990s in 2021, with 797 homicides. Crime has continued to persist, particularly shootings, with overall crime rising over 43% compared to the previous year.
The relationship between Lightfoot and the Chicago Police Department grew strained, as her progressive policies drew criticism from conservatives nationwide. In January, Lightfoot championed criminal justice reforms, including the elimination of cash bail in Illinois. However, she later shifted her stance, advocating for increased funding for the police.
To address the city’s challenges amidst the pandemic, Lightfoot proposed a plan that included a $16.7 billion allocation from the federal government to bolster the police force and support community programs. The plan heavily relied on funding from Washington to alleviate the city’s financial deficit, which reached new heights during Lightfoot’s tenure.
Despite Lightfoot taking office in 2019, violent crime rates in Chicago remain significantly higher than pre-pandemic levels. Homicides have increased by 11% since 2019, reaching levels seen during the peak of the pandemic when a record 644 homicides were recorded.
As Johnson assumes the role of mayor, the pressing issue of shootings continues to plague the city, despite efforts to remove firearms from neighborhoods. Shootings, with incidents as frequent as 50 gunshots in a two-day span, remain a grim reality, exemplifying the failure to address this critical problem.
Although confidence in Lightfoot’s leadership has waned, the progressive stronghold within Chicago’s Democratic circle remains evident, as exemplified by Johnson’s recent electoral triumph over candidates such as Lightfoot and Vallas.
During his inauguration speech at Michele Clark Magnet School, Johnson praised the city’s “innate soul” and emphasized the value of hard labor. However, conspicuously absent from his address was any acknowledgment of the potential exodus of prominent business owners from Chicago.
The recent relocation of billionaire Ken Griffin’s hedge fund, Citadel, to Miami serves as a stark reminder of the city’s challenges. Following a shooting near Citadel’s downtown offices, Griffin made the decision to move his more than 1,000 employees out of the crime-ridden metropolis. Notably, Griffin purchased a record-breaking $106.9 million waterfront estate in Florida, underscoring the appeal of safer surroundings.
As long as crime remains a persistent issue, there is a legitimate concern that CME Group Inc. and other businesses may follow suit and seek greener pastures elsewhere. The allure of safer environments and more favorable tax climates could be strong incentives for companies to relocate, posing a further challenge to Johnson’s efforts to rejuvenate Chicago’s economy and reputation.
While Johnson has inherited a city grappling with profound issues, including soaring crime rates and financial instability, it remains to be seen whether his progressive agenda and proposed tax hikes will ultimately bring about the desired transformation or further exacerbate the challenges faced by Chicagoans. The road ahead is fraught with obstacles, requiring astute leadership and innovative solutions to restore the city’s vitality and address the pressing concerns of its residents.