Chicago TIF Plan Puts CPS Funding and Local Projects at Stake

Chicago Mayor Brandon Johnson’s proposed budget would send $286 million from tax increment financing districts to Chicago Public Schools, while Ald. Anthony Beale said city budget office calculations showed only $225 million was available. The dispute ties CPS’s budget to a citywide decision: should money set aside for local TIF projects go instead to taxing bodies?

Who Controls the Funds

Johnson’s proposal includes a $522 million TIF surplus. When officials declare a surplus, the money returns proportionally to taxing bodies, with about half going to CPS and a quarter to the city. Chicago has more than 100 TIF districts, created to spur development in blighted areas. Officials freeze property values when they establish a district, and reserve revenue above that baseline for local construction or public-works projects.

CPS and city officials increasingly turn to TIF funds to cover recurring budget gaps. The proposed $286 million for schools matches what the school board budgeted in late July, but it’s half the amount the district received last year. Johnson declared a record $1 billion surplus the previous year, giving CPS a $576 million cash infusion. Of that, $175 million went back to the city for a pension payment. District officials said they had no indication a surplus of that size would recur.

The city must approve a final budget by the new year, with at least 26 of 50 aldermen voting in favor. The previous year’s dispute dragged into December, when a bloc of insurgent aldermen rejected Johnson’s budget and passed an alternative spending plan.

School Funding Still Unconfirmed

CPS first budgeted $200 million from TIF, then raised its projection to $285 million after board members and staff unions pushed back. The district aimed 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. CPS said it restored about 300 positions, but the district couldn’t say how long those jobs would last without more funding. The union 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 still hadn’t committed to providing the $150 million, leaving possible cuts on the table for the spring semester. A larger TIF surplus could have helped offset that risk.

After Johnson presented his budget to the City Council on Wednesday, Beale said the city budget office calculated that $225 million was available, rather than the $522 million the proposal relies on. Aldermen may resist declaring a larger surplus because that money could otherwise pay for 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 proposal “nothing but a bailout for CPS.”

Beale also said, “This budget strategically bails out CPS because there’s no magic money of $150 million coming from Springfield,” and said Johnson hadn’t mentioned that in his 50-minute speech. Whether the sweep could cancel nearly $300 million in TIF-funded projects may sway aldermen weighing the plan.

Gary Delays Budget Votes

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. It approved budgets for the Gary Redevelopment Commission and Gary Public Transportation Corporation. Council members, including Kenneth Whisenton, had raised concerns about a deficit of nearly $10 million, and city documents showed revenue had fallen by about $10 million.

Whisenton moved to schedule a ways and means committee meeting and a special meeting for Nov. 2 to discuss and vote on the remaining items. Indiana’s Department of Local Government Finance set Nov. 2 as the deadline for taxing units to adopt 2027 budgets, tax rates and levies.

Council Vice President Darren Washington cited more than $8 million in storm-damage costs after the Aug. 11 derecho, which the city was trying to recover from the U.S. Federal Emergency Management Agency. “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,” Washington said. He also raised concerns about the effect of 2025’s Senate Enrolled Act 1 on Gary’s budget.