As councils and mayors look ahead to the next few fiscal years, the conversation is shifting. It is no longer just about where to cut, but about how to bring in new revenue. In many metro areas, sales and property tax growth is slowing even as demand for public services remains high. At the same time, outside funding is uncertain, labor and operating costs continue to rise, and many of the easier cost-saving measures have already been exhausted. Below, we look at how several major cities are navigating these challenges in real time:
Seattle: Seattle Shield Initiative
In Seattle’s November 2025 elections, residents approved Proposition 2, known as the Seattle Shield initiative, which restructures the city’s Business and Occupation tax. The measure raises the gross receipts threshold from $100,000 to $2 million, exempting most small businesses entirely, while increasing tax rates on the city’s largest firms. City officials estimate the measure will generate roughly $80 million annually for the general fund.
San Francisco: Overpaid CEO Tax Proposal
Meanwhile, San Francisco’s ballot measure is a bit more contested. There, progressive members of the Board of Supervisors have advanced an “Overpaid CEO” tax for the June 2026 ballot. The proposal would impose a surcharge on large corporations where executive compensation far exceeds median worker pay, with supporters estimating it could raise around $200 million annually to support essential services, including the city’s public hospital system. Mayor Daniel Lurie has opposed placing the measure on the ballot, warning it could complicate economic recovery efforts and deepen political divisions.
Chicago: Corporate Tax Stalemate
In Chicago, efforts to impose an employer tax stalled during the 2026 budget process. Mayor Brandon Johnson proposed reinstating a corporate head tax to help close a projected deficit of more than $1 billion. The proposal faced resistance from City Council members concerned about potential impacts on jobs and the city’s business climate. Ultimately, the council rejected the tax and adopted a budget centered on expanding existing taxes and fees, including adjustments to rideshare charges and cloud computing taxes.
New York: State-Level Restraint on Local Taxes
In New York, as expected, state-level decisions are shaping the local revenue conversation. Governor Kathy Hochul’s proposed $260 billion budget does not include increases to income or corporate tax rates, despite calls from New York City Mayor Zohran Mamdani to raise taxes on high earners and large businesses. Hochul pointed to stronger-than-expected revenues, fueled by a strong stock market, higher wages and bonuses, and slower fallout from federal tariffs. While the budget does include some smaller changes, such as taxing nicotine pouches like cigarettes and adjusting how the state aligns with parts of the federal tax code, the overall tone is one of restraint.
Cities are not settling on a single playbook for raising new revenue. As support from state and federal partners becomes less predictable and traditional revenue growth slows, councils and mayors are leaning more heavily on locally controlled solutions that fit their political and economic realities. The choices being made now will matter well beyond the next budget cycle. As more cities test new approaches and revisit proposals from the last decade, the way revenue is raised may end up being just as important as how much money is brought in.
If you’re tracking how these shifts could affect your organization, our local monitoring and consulting services can help you navigate this rapidly changing landscape. Contact us to learn more.
