Mayor Brandon Johnson’s proposed city budget includes about $285 million for Chicago Public Schools — in line with what the school board budgeted in late July, but only half of what the cash-strapped district received last year.
The $285 million comes from a surplus of funds from special taxing districts, known as tax increment financing, or TIF. When officials declare a surplus, they return the money proportionally to the taxing bodies, with roughly half going to CPS and a quarter to the city. This year, Johnson’s budget proposal includes a total TIF surplus of about $520 million, officials said at a news briefing Tuesday.
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Both CPS and city officials have increasingly relied on TIF to plug perennial budget gaps. The district initially budgeted for $200 million in TIF funds, but after pushback from board members and staff unions, CPS raised that figure to $285 million to prevent five furlough days.
But the district remains on shaky financial footing. As part of CPS’ $10.11 billion budget, school board members aligned with the Chicago Teachers Union included an amendment for $150 million in unconfirmed state funding, reversing hundreds of layoffs and other department cuts. CTU pointed to commitments from several state lawmakers, but the district warned the move carried serious financial risk.
Three months into the school year, Springfield has yet to commit to providing that money. That may mean some cuts will be back on the table during the spring semester. A larger TIF surplus from City Hall could have helped offset the risk of those midyear cuts.
The district’s initial budget included more than 700 teacher layoffs to close a $732 million deficit. Following the board’s budget revision, CPS said it restored about 300 positions, though it’s unclear how long those roles can last without additional funding.
A district spokesperson did not immediately respond to a request for comment Wednesday.
Last year, Johnson declared a record $1 billion surplus, giving CPS a $576 million cash infusion — though $175 million of those funds were returned to the city for a pension payment. District officials said they had received no indication that a surplus of that size would materialize again.
CPS CEO Macquline King called the district’s July projection “a conservative estimate.”
There are more than 100 TIF districts across Chicago, which are intended to spur economic development in blighted areas. When the city creates a TIF district, the assessed property values in the area are frozen, and any revenue above that baseline is set aside for local construction or public works projects.
The mayor can declare a surplus of funds, and return some of those dollars to the taxing bodies as a one-time source of revenue. But aldermen are sometimes reluctant to declare larger surpluses because the money may otherwise be assigned to projects in their wards.
The city must pass a finalized budget by the new year with a simple majority, or 26 of the 50 aldermen. Last year, the city’s budget fight stretched into December, as a bloc of insurgent aldermen voted to reject Johnson’s budget and instead pass an alternate spending plan.
State law requires CPS to pass its budget by late August, well before it receives a finalized TIF figure from City Hall. That uncertainty has increasingly been a point of friction as CPS prepares its spending plan. Some school board members pointed to that uncertainty to justify relying on the unconfirmed state funding, arguing that the TIF money was far from guaranteed, either.