A coalition of progressive activists and big unions is upping the ante on the call for new revenue to finance help for lower-income Chicagoans, this time proposing not just a “LaSalle Street tax” on financial transactions and restoration of the employer “head tax” but a new city income tax on those who work or live in Chicago.

With a swipe at “wealthy yuppies” and corporations who “don’t pay their fair share,” the group—which includes the Chicago Teachers Union and SEIU Healthcare Illinois—specifically wants a 3.5 percent tax on household income above $100,000 a year.

The coalition also is proposing to form a municipal bank that would take over the task of investing pension monies and underwriting city bond issues—hopefully for free, or at least for much cheaper prices than conventional financial institutions charge—and to “divest from policing and incarceration” by freezing the size of the Chicago Police Department and substantially cutting its budget, according to Saqib Bhatti, co-executive director of the Chicago-based Action Center on Race & the Economy, which describes itself as “a campaign hub for organizations that work at the intersection of racial justice and Wall Street accountability.”

ACRE wrote the report being released today, which is endorsed by the unions, the Grassroots Collaborative and others and comes just two and a half weeks before Chicagoans are to vote on a new mayor and City Council.

The new revenue would be spent to provide free community college for all, free public transit, a program to alleviate homelessness and free universal early childhood education. It also would go to pay tens of billions of dollars in unfunded pension debt—including annual 3 percent compounded increases in benefits—that the coalition notes are owed workers as a matter of law.

Some of the items on the group’s list have been longtime goals of the CTU in particular, which asserts that children are being shortchanged because rich people have benefited from a rigged tax system. Some items on that list, such as hiking the transfer tax on the sale of homes worth more than $1 million, have made some progress. Others, such as the LaSalle Street tax, have stalled, with even union-backed mayoral candidate Toni Preckwinkle saying the tax would just drive large financial exchanges out of town, costing Chicago jobs and tax revenue.

The income tax idea is a newer element.

Citing U.S Census data that show Chicago is gaining large numbers of households making over $100,000 a year, the report states, “A city income tax would force these wealthy yuppies to pay their fair share and would bring in more than $1 billion a year.” In fact, it could bring in $1.4 billion a year if it also applied to household income of those who commute to jobs in the city, the group says.

A city income tax likely would have to be authorized by the Illinois General Assembly. The idea drew little support when I asked mayoral candidates about it in our pre-election questionnaire.

Other revenue-raisers in the plan include $2 billion to $2.4 billion a year from the tax on financial transactions, $150 million from the tax on high-end residential sales and $106 million from a $33-a-month payroll tax on every job in the city.

The coalition’s idea to spend more on crime prevention and treatment does appear to have some substantial support. But I’ve not heard before the idea of paying for it by reducing what goes to police. Bhatti said the coalition likes that plan because conventional police strategy “isn’t working.” As a result, he said, the 40 percent share of the total city budget that goes to police “is way too high,” and the city certainly does not need to add more detectives or patrol officers.

The idea of a municipal bank, too, is not new. One of the candidates for city treasurer, Ald. Ameya Pawar, 47th, has proposed that, looking to a bank the state of North Dakota runs. But the report adds a few twists, suggesting the city could reclaim profits from “Wall Street” institutions if the bank acted as underwriter on city bond issues and assumed responsibility for pension investments.

The report does not indicate whether the city has the expertise to do that or how long it might take to acquire such expertise. Nor does it discuss whether a city government wracked with corruption can be trusted to run its own bank with billions of dollars.

The spelling of Saqib Bhatti's name has been corrected.