What happened in the spring legislative session in Springfield and how did it affect Chicago Public Schools’ budget for next school year?
Illinois lawmakers approved a $55 billion spending plan that boosts the Evidence‑Based Funding (EBF) formula for K‑12 schools by $307 million for FY2026. Chicago Public Schools (CPS) will receive roughly $30 million to $60 million of those funds, and has already factored that amount into its budget projections for next school year. While any increase helps, CPS is left relying on other funding sources to close its budget deficit.
What does CPS’s budget deficit look like for next school year?
CPS projects a deficit of $829 million. To shrink that gap, the district is assuming $600 million in new, yet‑to‑be‑secured revenue from the city and state. With that optimistic assumption, CPS released a budget showing a $229 million shortfall and promised few—if any—school-level cuts, as long as the additional funding comes through.
Why did the Mayor, teachers union, and principals union push back on the school budgets CPS released?
Critics say the spending plan is built on shaky ground: over $600 million in revenue that neither the City Council nor the Illinois General Assembly has committed to. That total includes at least $300 million in Tax Increment Financing (TIF) surplus the city won’t even consider distributing until later this fall. Because the newly passed state budget offered no additional relief for CPS beyond the EBF increase, some argue the district is promising resources it may never have, setting schools up for mid‑year cuts if the money falls through.
What is driving CPS’s rising deficit?
Nearly four‑fifths of CPS’s budget pays for salaries, benefits, and pensions. Next year, those personnel costs jump sharply—about $375 million—largely due to the new contract with the Chicago Teachers Union. Add rising health‑care expenses and increased inflation‑related operating costs, and CPS is staring at almost $500 million in new expenses.
Could the district’s deficit grow even larger?
Yes. Two pending board decisions could add more than $200 million in new costs with no matching revenue: (1) reimbursing the City of Chicago $175 million for part of its required payment to the Municipal Employees' Annuity and Benefit Fund (MEABF), and (2) covering an estimated $30 million in start‑up and transition costs if CPS converts up to five former Acero charter campuses into district‑run schools. On top of that, it’s also possible that the federal government could cut education funding. CPS receives about 10% of its funding from the federal government, so even modest reductions could make a challenging budget year even harder.
What does all this mean for CPS families heading into next school year?
A new interim CEO must deliver a balanced budget by late August. If the hoped‑for $600 million never materializes, CPS may be forced to take one or more difficult steps: cutting school budgets mid‑year, taking out a costly short‑term loan, or resorting to risky “scoop‑and‑toss” debt restructurings. Outgoing CEO Pedro Martinez has argued that a large TIF surplus is the cleanest fix, but it is unclear whether his successor—or City Hall—will back that approach.
Families should keep a close eye on CPS’s summer board meetings and year-end decisions from City Hall and Springfield. What happens in those rooms will decide whether schools keep the staff and programs students and families count on.
Revenue Options to Address CPS Deficit
In our July 2024 report, Kids First Chicago explored six potential revenue options to address CPS’s deficit. We encourage partners to revisit these options and how they could be considered together to put the district back on more stable financial footing.
When will we ask parents about the May 1, Day of Action?
A debate has been playing out between Chicago Public Schools and the Chicago Teachers Union over May 1; no one's asking CPS parents.
How a Federal Child Care Funding Freeze Could Hit Chicago Public Schools
A proposed federal freeze on child care and family assistance funds threatened to destabilize providers and families across Illinois. A federal judge has temporarily blocked the freeze, offering short-term relief while uncertainty remains if the ruling is appealed.
What 2025 Taught Us About Parent Power
Across Chicago, families showed up not just to react to decisions, but to influence them by asking hard questions, sharing lived experience, and insisting that schools work better for their children. At Kids First Chicago, we believe parents hold essential expertise about what students need to thrive. This year, that belief was affirmed again and again.