Chicago Mayor Brandon Johnson has proposed a $17.6 billion city budget that includes a $522 million sweep of funds from tax increment financing (TIF) districts, with $286 million allocated to Chicago Public Schools (CPS). The amount earmarked for CPS is consistent with the school board’s July budget figures but represents roughly half of the district’s funding from TIF funds last year.
TIF districts, designed to encourage economic development in designated areas, generate revenue by freezing property tax bases and capturing the revenue growth above that baseline for local use. When a surplus occurs, it is typically proportionally distributed between taxing authorities, with about half usually going to CPS and a quarter to the city.
This year’s proposed sweep of $522 million marks a continuation of CPS’s increasing reliance on TIF funds to address persistent budget shortfalls. Initially, the district budgeted $200 million in TIF money, but following pressure from school board members and union officials, CPS raised the estimate to $285 million to avoid five planned furlough days.
Despite this, CPS remains in a precarious financial position. The district’s revised $10.11 billion budget incorporates an amendment from board members aligned with the Chicago Teachers Union (CTU) that includes $150 million in state funding not yet confirmed. The infusion of these funds would help reverse hundreds of layoffs and restore programs cut amid fiscal challenges. However, CPS officials warned that relying on unapproved state money adds significant risk to the budget’s stability.
State law requires CPS to finalize its budget by late August, a deadline that precedes receipt of the city’s official TIF surplus figures, creating ongoing uncertainty in financial planning. Some board members justified including the unconfirmed state funds due to unpredictability over TIF revenues, while others expressed cautious optimism about the mayor’s proposal.
The budget proposal met resistance from several aldermen, who questioned the feasibility of the $522 million sweep. Ald. Anthony Beale, a vocal critic of the mayor, argued that the city budget office’s calculations suggest only $225 million may be available to reallocate, far less than the amount Johnson’s plan depends upon. Beale and others expressed concerns about potential cuts to TIF-funded projects in individual wards to make up the difference, noting that aldermen are often reluctant to approve large surpluses because such actions can jeopardize local development initiatives.
Beale described the budget’s reliance on a TIF sweep and uncertain state aid as a bailout for CPS, pointing out that no mention of the sweep was made in Johnson’s presentation to the City Council. He warned that the budget could undermine ward projects and questioned the sustainability of this funding approach.
The city council must approve a final budget by early next year with a majority vote of 26 out of 50 aldermen. Budget negotiations are expected to be contentious, following last year’s prolonged deliberations that extended into December when a group of aldermen rejected the mayor’s initial proposal.
CTU President Stacy Davis Gates praised Johnson, a former union organizer, for the proposed TIF surplus allocation and called on state legislators to secure the necessary funding to stabilize CPS’s finances before the fall legislative session ends. “This is what it looks like when Chicago elects a mayor who believes in public education,” she said, urging further support from Springfield.