Chicago City Wire

Chicago Public Schools is preparing to vote on its 2026 budget as it faces a $734 million shortfall. The district's financial situation is shaped by several factors, including a new contract with the Chicago Teachers Union and long-term debt obligations.

The recently approved contract with the Chicago Teachers Union will increase costs for the district by $1.5 billion over four years, with teacher pay accounting for at least $1.1 billion of that amount. To help offset expenses, the proposed budget includes $165 million in savings through layoffs affecting central office staff, janitors, lunchroom workers, and crossing guards.

Property taxes continue to play a significant role in funding CPS, which receives $4 billion from these taxes and represents the largest item on property tax bills for Chicago residents.

A notable issue for the district is underutilization of school buildings. Data shows that 58% of schools—275 buildings—are not being used to capacity. The ten least-utilized schools are operating at just 12% capacity on average.

CPS also carries substantial long-term debt. The district is projected to spend $15.257 billion on long-term debt payments by 2049 when future interest is included. In addition, there are $13.9 billion in unfunded pension liabilities owed to teachers.

To manage its finances, CPS plans to refinance $1.8 billion in existing debt and issue an additional $600 million in new capital debt in 2026. The district also expects to use $65 million from its debt service stabilization fund.

Bryce Hill, director of fiscal and economic analysis at the Illinois Policy Institute, commented on the situation: “It’s time for CPS leaders to get serious and innovative when it comes to stabilizing finances. We should be protecting families from mounting debt, not utilizing budgetary gimmicks such as one-time funding sources, ‘accelerating’ savings from future years or refusing to make pension payments.”

More information about the CPS budget can be found at illin.is/cpsvote.