On August 28th, 2025, Chicago Public Schools (CPS, or the “District”) passed a balanced budget for its 2026 fiscal year, covering the 2025-2026 school year. The budget successfully closed a $734 million deficit. The District’s choice to avoid short-term borrowing as a deficit-closing method likely prevented a credit downgrade.
Tax Increment Financing (TIF) Districts are a complex, often misunderstood part of Chicago’s tax structure. TIF Districts segment and dedicate a portion of property tax collections within a designated geographic area to fund economic development and capital or infrastructure projects. They do not, as critics often claim, siphon funds away from local governments. Instead, TIF districts limit the taxable value of property, or the tax base, from which local governments can draw their property tax…
Civic Federation President Joe Ferguson testified before the Illinois House Executive Committee on July 31, 2025, urging action to address Chicago Public Schools’ (CPS) $734 million budget deficit and long-term structural challenges. Ferguson highlighted the District’s reliance on one-time revenues, underfunded pensions, declining enrollment, and junk credit rating, warning that short-term borrowing could worsen its financial position. He outlined potential solutions, including increased State…
CPS has recently concluded negotiations with the CTU over its 2025-2028 contract. The District projects a $529 million structural deficit for FY2026. This deficit could grow if the District chooses to spend extra money on pension reimbursements or charter schools or loses federal funding. Several of the assumptions CPS makes in defining this deficit are flawed or uncertain. The real deficit could end up significantly higher than the current projection. CPS has few realistic options for revenue…
CPS teachers draw their pensions from a different fund than other employees. Both funds are substantially underfunded. The Teachers’ Pension Fund is less supported by the state than teachers’ pensions in the rest of Illinois. This could be solved by consolidating the Chicago fund with the downstate fund. The District and the City continue to dispute which body is responsible for covering the pension costs of CPS’ non-teacher employees.
Given the structural deficit CPS is currently combating, it will likely need to request some form of increased financial support from the State. An SFA with oversight and audit authority could be a potential counterbalance that allows legislators to have more confidence in the District’s ability to use additional support wisely. Although the revival of the School Finance Authority is a potential tool for financial reformers, state legislators should study the situation carefully to ensure that…
The recent Civic Federation Financial Landscape Analysis of the Chicago Public School District highlights a long-term issue for the Chicago Public School District (CPS or the “District”): declining enrollment has led to significant building underutilization. Today, a significant mismatch exists between the number of students enrolled in the District and the amount of space available in schools throughout the City. Based on FY2025 CPS data, 56% of District school buildings are underutilized. CPS…
As contract negotiations between the Chicago Public School District (CPS or the “District”) and the Chicago Teacher’s Union (CTU) continue, how to pay for the increases in salaries and other contract demands remains an outstanding question. One idea CTU representatives have suggested is using CPS’ general fund balance or reserve funds. In its fiscal year (FY) 2024 financial audit, the District listed a fund balance of approximately $1.3 billion on June 30, 2024. A common misperception is that…
Executive Summary The Chicago Public School District (CPS or the “District”) faces a critical financial juncture, highlighted by structural budget imbalances, rising expenditures, declining enrollment, significant near-term infrastructure investment needs, and substantial long-term liabilities. A new 21-member Board of Education (the “Board”), partially elected for the first time, inherits these challenges as it assumes oversight on January 15, 2025.
The Chicago Public School District (CPS) faces a critical financial juncture, as outlined in a Civic Federation report released today. The newly expanded 21-member, hybrid-elected Board of Education (the “Board”) faces a confluence of financial challenges immediately upon taking office on January 15, 2025, as evidenced by discouraging trends that jeopardize the District’s ability to provide quality education necessary to prepare Chicago students for success. By laying out a…
