Ald. Anthony Beale says Chicago’s budget office found just $225 million available in tax increment financing surplus. Mayor Brandon Johnson’s proposed budget counts on $522 million. The gap emerged Wednesday after Johnson’s 50-minute budget speech to the City Council, putting pressure on a spending plan that relies on TIF money to fill recurring holes at Chicago Public Schools.
The Proposal
Johnson’s plan sends $286 million to CPS, the same amount the school board budgeted in late July. That’s still only half of what the cash-strapped district received last year. The money would come from the TIF surplus. When officials declare one, funds flow back proportionally to taxing bodies, with about half going to CPS and a quarter to the city.
CPS and the city have relied more heavily on TIF dollars to close budget gaps year after year. CPS first budgeted $200 million from TIF, then raised its projection to $285 million after board members and staff unions pushed back, aiming to avoid five furlough days. In July, CPS CEO Macquline King called the number “a conservative estimate.”
The Unconfirmed $150 Million
The district’s revised $10.11 billion budget, approved by school board members aligned with the Chicago Teachers Union, counted on $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 added funding. The union pointed to commitments from state lawmakers. The district itself warned of serious financial risk.
Three months into the school year, Springfield still hasn’t committed the money. Possible cuts remain on the table for the spring semester. Illinois law requires CPS to pass its budget by late August, before City Hall settles on the TIF figure, so a larger surplus could have helped cover that risk. A district spokesperson didn’t immediately respond to a request for comment Wednesday.
Aldermen Push Back
Beale didn’t hold back. “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,” he said. He called the plan “nothing but a bailout for CPS.” He added: “This budget strategically bails out CPS because there’s no magic money of $150 million coming from Springfield.” Johnson hadn’t mentioned it in his speech, Beale said, 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.”
Aldermen often resist declaring large surpluses because the money might otherwise go to TIF projects in their wards. Whether the sweep could cancel nearly $300 million in TIF-funded projects may sway the vote. The city needs 26 of 50 aldermen 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 last year, giving CPS a $576 million cash infusion, of which $175 million went back to the city for a pension payment. District officials said they had no indication that a surplus of that size would return. Chicago has more than 100 TIF districts, which aim to spur development in blighted areas. Property values freeze when a district is created, and revenue above the baseline is reserved for local construction or public-works projects.
Chicago Teachers Union President Stacy Davis Gates, holding a statement, praised Johnson, a former CTU organizer. “This is what it looks like when Chicago elects a mayor who believes in public education,” she said. She urged state lawmakers to send money to CPS before the fall veto session ends. “Now the governor and General Assembly have to follow suit.”
Gary Wrestles With Its Own Shortfall
Across the state line, Gary’s Common Council postponed votes on the Gary/Chicago International Airport Authority budget, salaries and the general budget after Tuesday’s meeting. Councilman Kenneth Whisenton, D-at large, moved to hold a ways and means committee meeting at 5:30 p.m. Nov. 2, followed that day by a special meeting to vote. Indiana’s Department of Local Government Finance set Nov. 2 as the deadline for taxing units to adopt 2027 budgets, tax rates and levies.
City documents showed revenue down by about $10 million, and council members raised concerns about a deficit of nearly $10 million. City Controller Chenika Beck said at a Sept. 29 committee meeting that the city was making cuts to address the shortfall. Council Vice President Darren Washington, D-at large, noted that the administration had warned of over $8 million in storm-damage costs from the Aug. 11 derecho. The city hopes to recover the money from the Federal Emergency Management Agency, but it “might not come back in the next couple of years.” 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 must pay more than $12 million to East Chicago and Michigan City. State comptroller funds will cover the money withheld over 10 years.
The council unanimously approved the Gary Public Transportation Corporation’s budget of about $18.3 million, made up mostly of federal grants. It approved the Redevelopment Commission’s budget 6-1, with Washington the lone no vote. Executive Director Christopher Harris said it matched the 2026 budget. The commission’s proposed tax base declined going into 2027, with just under $69,000 expected to roll over, down from about $138,000 in 2026. Property-tax revenue rose from $175,885 to $184,421. Washington told the Post-Tribune he couldn’t justify Harris’s proposed salary of just under $92,370.
The council also approved a $750,000 grant from the Gary Board of Public Works and Safety: $250,000 to Edgewater Health and $500,000 to Community HealthNet. Both organizations sought 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. The council introduced the ordinance Tuesday night and suspended its rules to vote that same week. “I didn’t support it because it was last minute,” Washington said, adding that the request should have gone through committee with specific details from both CEOs.
Why This Matters:
Chicago’s budget relies on a number its own budget office apparently can’t reproduce, while the school district’s spending counted on state money nobody has promised. When a surplus becomes the plan rather than the exception, TIF-funded projects in neighborhoods may lose out. Gary shows the same pattern on a smaller scale: a roughly $10 million revenue drop, uncertain federal reimbursement, a decade of withheld state funds and an emergency grant moved through in a single night. From this perspective, the shared problem is spending commitments that run ahead of confirmed revenue, leaving taxpayers and councils to sort out the gap afterward. Both bodies face hard votes with the clock running.
- chicago
- gary
- brandon johnson
- chicago public schools
- city budget
- tax increment financing
- gary city council
- budget deficit