After outcry from board members and staff unions, Chicago Public Schools leaders have upped the district’s projected tax increment financing surplus revenue by $85 million to prevent furloughs.
The change raises the district’s anticipated TIF surplus to $285 million in its proposed 2026-27 budget, replacing savings that would have come from cutting five paid professional development days.
TIF districts are special taxing zones aimed at spurring redevelopment by pooling increases in property tax revenue within a designated area. When City Hall declares a surplus, that pooled money is returned proportionally to the taxing districts, with roughly half going to CPS and a quarter going to the city.
The TIF assumption is still significantly lower than the $576 million CPS received last year after city officials declared a historic $1 billion surplus. District leaders previously said City Hall has given them no indication that a similar level of funding will materialize again.
In a news release Tuesday, CPS CEO Macquline King said the new figure “remains a conservative estimate.”
“We have worked to listen to as many CPS voices as possible,” King said. “It became clear that to alleviate any potential stressors or possible disruption to the start of the school year, we needed to update the proposed budget.”
The change follows a Monday letter to King from SEIU Local 73 President Dian Palmer, who called the district’s original $200 million projection a “deliberately conservative lowball figure” and asked for the district to explain its reasoning for arriving at that estimate.
“CPS cannot claim there is ‘no money’ while leaving tens of millions of dollars sitting unclaimed in TIF districts across this city,” Palmer said. Local 73 represents 16,000 support staff in CPS.
CPS leaders have called this one of the district’s most challenging budget seasons in years. When officials unveiled the proposed spending plan earlier this month, it also included more than 700 teacher layoffs, deep department cuts and a midyear spending freeze to close a $732 million deficit. The Board of Education is slated to vote on the $9.96 billion budget Thursday.
The city and CPS alike have increasingly relied on TIFs as a one-time fix to plug budget gaps.
But because the city doesn’t finalize the TIF surplus until later in the year, CPS officials don’t know exactly how much they’ll receive when building a budget. Aldermen are sometimes reluctant to declare larger surpluses because the money may be assigned to projects in their wards.
Mayor Brandon Johnson did not comment directly on whether the new $285 million share for CPS was feasible, instead highlighting last year’s record surplus and calling on the state to increase the district’s funding. CPS receives only 73% of what the state deems adequate under Illinois’ Evidence-Based Funding formula.
“I will continue to work with City Council members who understood the assignment at the time in which I declared those TIF surplus dollars,” Johnson told reporters during his weekly City Hall news conference. “As much as I’ve done my part to fulfill the promise of public education, the state of Illinois has to do its part as well.”
CPS last used furlough days in 2017, and officials stressed that the tactic was a last resort. Each furlough day saves about $17 million — but it also results in cuts to staff salaries. For teachers, cutting five working days means a roughly 2% pay cut.
The Chicago Teachers Union urged the district to find outside revenue before resorting to cuts. At a budget hearing last week, several board members aligned with the union expressed skepticism that CPS had explored all of its revenue options, including from the state and Cook County.
CTU President Stacy Davis Gates said in a statement Tuesday that despite the upped TIF revenue, the proposal as it stands “would cause permanent harm to Chicago’s students.” She called on CPS to make further changes to the budget to keep resources “needed for students to have a quality school day.
“We said that this budget was a first draft,” Davis Gates said. “CPS is showing in real time that their proposal was presented without doing their homework.”
CPS is asking the school board to pass the budget Thursday, one month before the state-mandated deadline, to secure short-term borrowing known as tax anticipation notes in order to make September payroll.
Chicago Tribune’s Alice Yin contributed.
