Angry demonstrators clogged the common space just outside City Council chambers Wednesday morning, protesting, among other things, the Daley administration’s proposed tax increases on beer, wine, and spirits. “What’s the most expensive ingredient in beer?” one sign said. “Taxes!” 

Protests or press conferences of some kind happen before nearly every full City Council meeting, but this one attracted some recent converts to civil disobedience, such as aldermen Eugene Schulter and Patrick Levar. Both are reliable Daley votes in the council, but this time both ripped the idea of taxing alcoholic beverages, saying that would only succeed in driving “mom-and-pop stores and taverns” out of the city.

It’s obvious that the mayor’s 2008 budget plan is going to have to change. Daley has even said so, announcing that he’s willing to slash some of the nearly $300 million in proposed new taxes, including more than $100 million in property levies, and at least delay some spending, such as for additional cops and recycling services. The mayor is a skilled enough politician that he can present this as a thoughtful, generous compromise. In fact, he’d hardly  be the first public official to anger everyone with the specter of a gargantuan tax hike, then show apparent benevolence by implementing a slightly smaller one.

On the other hand, the mayor doesn’t have a choice this time.

While some aldermen have moaned about the booze taxes, others have blasted the tax on bottled water or the jacked-up fines for parking violations, and just about everyone has run from the massive property tax increase.

Leading the property tax bitch-fest–it doesn’t rise to the level of a “revolt” or even “coffee-cup rebellion”–are the northwest- and southwest-side white and Latino guys who are usually the mayor’s closest allies. “The property tax stuff is no good,” said 38th Ward alderman Tom Allen, who then asked this reporter for ideas to generate more revenue.

That’s the problem right now: just about everybody agrees that the new taxes stink, but they don’t know what else to do. Some aldermen have proposed things like scaling back a couple of the TIFs downtown, selling off city-owned plots of land, or fining people who hang signs without a permit, but these ideas don’t have widespread support or won’t generate enough to replace existing proposals. A few aldermen have groused that budget talks have so far focused on which ways to raise money rather than where fat can be trimmed. 

Most, though, have accepted Daley’s argument that any significant cuts will keep Chicago from “moving forward,” as his ongoing campaign slogan proclaims. “It’s to the point where what used to take a day to get done is going to take a week,” said 30th Ward alderman Ariel Reboyras.

But the mayor has to make some choices. He knows his budget doesn’t have close to a council majority. Black and “independent” aldermen appear to be more open to many of the tax ideas than the mayor’s usual friends, but they’re only going to support them if Daley gives them a few gifts in return–such as additional funding for the Inspector General’s office or an agreement to settle the police torture lawsuits. 

Daley’s not going to make those deals. So instead he’s got to appease the aldermen who represent the bungalow belt. “In this environment, there’s not a lot the mayor can promise you–or threaten you with, which he never did openly, but it happened,” said Brian Doherty, alderman of the conservative 41st Ward on the far northwest side. “The old patronage-type government is gone, there are new aldermen in the council, and people are against this property tax increase. It makes for an interesting time.”

Doherty’s prediction: “They’ll keep lowering the property tax until they get 26 votes.”

That’s what other mayoral allies, such as council budget committee chair Carrie Austin, are already talking about.

But don’t expect many more spending reductions. These aldermen are now hoping manna will drop from the sky. On the off chance that doesn’t happen, they’re wondering how high they can raise vehicle stickers and other fees, how fast parking meters can be leased to a private company, and what the odds are that the state will deliver Chicago a casino.