Public Schools Bear Chicago’s Budget Uncertainty

Chicago Mayor Brandon Johnson proposed $286 million for Chicago Public Schools, half of what the cash-strapped district received last year. The money depends on a proposed $522 million surplus from tax increment financing districts. CPS restored about 300 positions in its revised budget, but officials haven’t said how long those jobs can last without additional funding.

School Funding on Uncertain Ground

CPS first budgeted $200 million from TIF funds, then raised its projection to $285 million after board members and staff unions pushed back. The district said it wanted to avoid five furlough days. In July, CPS CEO Macquline King called the projection “a conservative estimate.”

The school board approved a revised $10.11 billion budget that included $150 million in unconfirmed state funding. The amendment reversed hundreds of layoffs and other department cuts. Chicago Teachers Union-aligned board members cited commitments from state lawmakers, while the district warned of serious financial risk.

Illinois law requires CPS to pass its budget by late August, before City Hall finalizes the TIF figure. Three months into the school year, Springfield hadn’t committed to the $150 million, leaving possible cuts on the table for the spring semester. A larger TIF surplus could help cover that risk.

When officials declare a TIF surplus, they return funds proportionally to taxing bodies. About half goes to CPS and a quarter to the city. Chicago has more than 100 TIF districts. When a district is created, property values are frozen, and revenue above the baseline is reserved for local construction or public-works projects.

Ald. Anthony Beale said city budget office calculations showed only $225 million available, not the $522 million Johnson’s proposal relies on. Aldermen may hesitate to declare a larger surplus because the money could otherwise go to 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.”

Beale said Johnson hadn’t mentioned the missing state money in his 50-minute speech. He said, “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 proposed sweep could cancel nearly $300 million in TIF-funded projects could shape aldermen’s decisions. The city needs 26 of 50 aldermen to approve a final budget by the new year.

State Money and Local Deadlines

Chicago Teachers Union President Stacy Davis Gates praised Johnson’s proposed surplus and urged state lawmakers to provide money for CPS before the fall veto session ended. “This is what it looks like when Chicago elects a mayor who believes in public education,” Davis Gates said. “Now the governor and General Assembly have to follow suit.”

Last year, Johnson declared a record $1 billion surplus, giving CPS a $576 million cash infusion. The district returned $175 million to the city for a pension payment. District officials said they had no indication that a surplus of that size would recur.

In Gary, Indiana, the Common Council postponed votes on the Gary/Chicago International Airport Authority budget, salaries and the general budget after its Tuesday meeting. Councilman Kenneth Whisenton moved to schedule a committee meeting and special vote for Nov. 2, the deadline set by Indiana’s Department of Local Government Finance for adopting 2027 budgets, tax rates and levies.

Gary council members have raised concerns about a deficit of nearly $10 million. City documents showed revenue had fallen by about $10 million, and City Controller Chenika Beck said the city was making cuts. Council Vice President Darren Washington said the city was trying to recover more than $8 million in storm-damage costs from the U.S. Federal Emergency Management Agency, but that money might not arrive in the next couple of years. A separate state comptroller mistake requires Gary to pay more than $12 million to East Chicago and Michigan City, with state comptroller funds withheld for 10 years.

Services, Budgets and Emergency Aid

The council unanimously approved the Gary Public Transportation Corporation’s budget of about $18.3 million, made up mostly of federal grants. The department plans facility and vehicle upgrades next year. The redevelopment department’s budget passed 6-1; its proposed tax base had declined, with just under $69,000 expected to roll over, compared with about $138,000 in 2026. Property-tax revenue was projected to rise from $175,885 to $184,421.

The council also approved a $750,000 grant for Edgewater Health and Community HealthNet after both organizations requested emergency funds following the Aug. 11 derecho. Edgewater received $250,000 and Community HealthNet received $500,000. Dr. Danita Johnson Woods said Edgewater closed for about two weeks, kept paying employees and now had a “serious cash flow problem.” Dr. Janet Seabrook said Community HealthNet faced a similar situation. The grant passed 6-1. Washington said the request was last-minute and should have gone through committee.