Johnson's TIF Plan Faces Doubts as CPS Funds Hang in Balance

Chicago Mayor Brandon Johnson wants $286 million from a tax increment financing surplus to support Chicago Public Schools. That’s half the amount the cash-strapped district received last year. Some aldermen say the money may not even exist.

Johnson’s proposed budget relies on a $522 million TIF surplus. When officials declare a surplus, they return the funds proportionally to taxing bodies: about half goes to CPS and a quarter to the city. The $286 million for schools matches what the school board budgeted in late July.

A District Leaning on a Shrinking Cushion

CPS and city officials increasingly use TIF funds to cover recurring budget gaps. The district first budgeted $200 million from TIF, then raised its projection to $285 million after board members and staff unions pushed back. The aim was to avoid five furlough days for employees. In July, CPS CEO Macquline King called the projection “a conservative estimate.”

The revised $10.11 billion CPS budget, approved by school board members aligned with the Chicago Teachers Union, includes $150 million in state funding that hasn’t been confirmed. That amendment reversed hundreds of layoffs and other department cuts. CPS said it restored about 300 positions, though it’s unclear how long those jobs will last without more money. The union cited commitments from state lawmakers. The district warned of serious financial risk.

Three months into the school year, Springfield hasn’t committed the $150 million. Possible spring-semester cuts remain on the table. A larger TIF surplus could have offset that risk because Illinois law requires CPS to pass its budget by late August, before City Hall finalizes the TIF figure. A district spokesperson didn’t immediately respond to a request for comment Wednesday.

Aldermen Challenge the Numbers

After Johnson presented his budget to the City Council Wednesday, Ald. Anthony Beale said city budget office calculations showed only $225 million available, not the $522 million the plan counts on. Aldermen may hesitate to declare larger surpluses because the money could otherwise fund TIF projects in their wards.

“One of the things that we have to get to the bottom of is which projects are being sacrificed in order to sweep this TIF,” Beale said. He called the plan “nothing but a bailout for CPS.” He also said, “This budget strategically bails out CPS because there’s no magic money of $150 million coming from Springfield,” and argued Johnson skipped that point in his 50-minute speech because “they don’t want you all to know that they are bailing out CPS because they passed a budget that was totally out of whack.”

Whether the sweep could cancel nearly $300 million in TIF-funded projects may sway aldermen. The city needs 26 of 50 votes to pass a final budget by the new year. Last year’s fight dragged into December, when a bloc of insurgent aldermen rejected Johnson’s budget and passed an alternative spending plan. Johnson declared a record $1 billion surplus then, giving CPS a $576 million cash infusion; $175 million went back to the city for a pension payment. District officials said they had no indication a surplus that size would return.

Chicago has more than 100 TIF districts, created to spur development in blighted areas. When officials create a district, property values freeze, and revenue above the baseline goes toward local construction or public works.

Chicago Teachers Union President Stacy Davis Gates praised Johnson, a former CTU organizer, in a statement Wednesday. “This is what it looks like when Chicago elects a mayor who believes in public education,” she said. “Now the governor and General Assembly have to follow suit.” She urged state lawmakers to send money to CPS before the fall veto session ends.

Gary Stalls While Health Clinics Wait on Relief

Across the state line in Gary, Indiana, the Common Council postponed votes Tuesday on the Gary/Chicago International Airport Authority budget, salaries and the general budget. Councilman Kenneth Whisenton, D-at large, moved to hold a ways and means committee meeting at 5:30 p.m. Nov. 2, followed by a special meeting that day to vote. That’s also the state deadline for taxing units to adopt 2027 budgets, tax rates and levies.

The city faces a deficit of nearly $10 million, with revenue down by about $10 million. City Controller Chenika Beck said at a Sept. 29 committee meeting that the city was making cuts. Council Vice President Darren Washington, D-at large, pointed to the Aug. 11 derecho. “We were already told by the administration that we have over $8 million in costs (due to storm damage) that we’re trying to get back from (the U.S. Federal Emergency Management Agency) that might not come back in the next couple of years,” he said. He also raised concerns about 2025’s Senate Enrolled Act 1.

A separate state comptroller mistake tied to the move of the Majestic Star casinos means Gary owes more than $12 million to East Chicago and Michigan City, withheld from state funds over 10 years.

The council approved a $750,000 grant from the Gary Board of Public Works and Safety: $250,000 for Edgewater Health and $500,000 for Community HealthNet. Both requested emergency funds after the derecho. Dr. Danita Johnson Woods, Edgewater’s president and CEO, said the organization closed for about two weeks, kept paying employees and now has a “serious cash flow problem.” Dr. Janet Seabrook, CEO of Community HealthNet, described a similar situation. The vote was 6-1, with Washington opposed. “I didn’t support it because it was last minute,” he said.

The council also unanimously approved the roughly $18.3 million Gary Public Transportation Corporation budget, mostly federal grants, and passed the redevelopment budget 6-1. Washington again opposed it over the executive director’s salary of just under $92,370.

Why This Matters: Chicago’s schools are being asked to balance their books on a one-time accounting tool, and the numbers don’t yet agree. If the TIF sweep falls short and Springfield doesn’t deliver $150 million, the spring semester could bring renewed cuts to roughly 300 restored positions and the services students rely on. In Gary, a city already short nearly $10 million is waiting on federal storm reimbursement that may not arrive for years, while two health providers that serve residents wait on emergency dollars after weeks of lost operations. In both places, ordinary people absorb the risk when public budgets rest on money that hasn’t been confirmed.