Chicago Mayor Brandon Johnson has put forth a comprehensive $16.6 billion city budget for 2026, earmarking an impressive $552.4 million for Chicago Public Schools (CPS). This represents a substantial increase over the $379 million the school board initially projected when it approved its own $10.2 billion budget in August. Unveiled on Thursday, the mayor’s proposal seeks to bring stability to school finances, protect vital classroom programs, and mitigate losses from federal funding changes.
Chicago mayor proposes $16.6 billion budget with major boost for public schools
More Funding to Avert Mid-Year Cuts
According to reports from Chalkbeat, the additional $173 million allocated to CPS is critical. It is expected to prevent spending cuts midway through the academic year and help bridge funding gaps left by the Trump administration’s discontinuation of magnet school grants. This financial injection could also enable the school board to fulfill a pension reimbursement payment to the city, although this specific payment isn’t yet incorporated into the city’s 2026 budget plan.
Mayor Johnson emphasized that these funds are designated to protect teaching staff, re-establish crucial student support programs, and ensure that school employees receive their rightful pension benefits.
TIF Surplus Fuels School Support
A primary source for this new funding is the city’s surplus generated from Tax Increment Financing (TIF) districts. These special taxing zones collect over $1 billion annually in property taxes, with the aim of stimulating development in underserved neighborhoods. Any money not explicitly allocated to ongoing projects can be declared a surplus, with CPS legally entitled to 52 percent of these funds.
The mayor announced a record TIF surplus this year, which Chalkbeat indicates will help offset an $8 million deficit resulting from federal grant reductions. School board member Michilla Blaise, a mayoral appointee, highlighted that this decision would prevent disruptions in classrooms and provide much-needed financial stability for schools.
Blaise further stated that this measure is also designed to shield school funding from potential federal cuts in the future.
Pension Payment Under Discussion
The issue of pension reimbursements, however, remains a point of discussion. CPS’ current budget indicates that should additional revenue become available, the district might consider reimbursing the city for a portion of the pension costs for non-teaching staff covered under the city’s plan.
This particular matter has been a source of contention between the city and the school district for several years. Former Mayor Lori Lightfoot initiated an agreement in 2020 that required CPS to contribute to the city’s pension obligations. The district made its last payment, totaling $175 million towards the 2023 liability, in early 2024.
Blaise informed Chalkbeat that the school board is expected to discuss a new agreement at its October 23 meeting. This discussion aims to reassure alderpeople that CPS intends to utilize the additional TIF dollars responsibly.
Investments Beyond Education
Mayor Johnson’s budget proposal extends beyond traditional school funding. It allocates $7 million to increase salaries for more than 3,000 early childhood educators participating in city-supported programs and provides additional funds for summer youth employment initiatives.
Notably, the budget introduces a new tax on social media companies. This tax would charge 50 cents per active user exceeding 100,000 in Chicago, with city officials estimating it will generate $31 million annually to fund mental health programs.
Johnson emphasized that this tax reflects the city’s commitment to holding large digital platforms accountable for their societal and mental health impacts.
What’s Next for the Budget?
The proposed $16.6 billion city budget requires approval from at least 26 of Chicago’s 50 aldermen before the end of the year. If passed, this budget would stand as one of the most significant education-focused budgets in Chicago’s recent history, signaling a strong commitment to utilizing local surpluses to ensure the ongoing stability and enhancement of school operations.