Chicago Mayor Brandon Johnson has unveiled an ambitious $16.6 billion city budget proposal for 2026, earmarking a significant $552.4 million for Chicago Public Schools (CPS). This represents a substantial increase over the $379 million the school board initially projected for its own $10.2 billion budget back in August. Revealed on Thursday, the mayor’s plan is designed to bolster school finances, safeguard classroom initiatives, and mitigate the impact of anticipated federal funding reductions.
Preventing Mid-Year Cuts and Bolstering Programs
The additional $173 million allocated to CPS is crucial for preventing mid-year spending cuts that could otherwise disrupt educational programs. It will also help the district address funding gaps, particularly those resulting from the previous administration’s cancellation of magnet school grants. Furthermore, this financial injection could allow the school board to make a long-discussed pension reimbursement payment to the city, although this particular payment is not yet formally included in the 2026 city budget plan.
Mayor Johnson emphasized that these funds are specifically intended to protect teaching positions, revive essential student support services, and guarantee that all school employees receive their rightful pension benefits.
Leveraging TIF Surpluses for Education
A primary source for this increased school funding is the city’s surplus generated from special taxing districts known as Tax Increment Financing (TIF) areas. These zones collect over $1 billion annually in property taxes, with the goal of stimulating development in historically underserved neighborhoods. Any funds not committed to ongoing development projects can be declared a surplus, and by law, CPS is entitled to 52% of these additional revenues.
This year, Mayor Johnson announced a record TIF surplus. This windfall is expected to cover an $8 million shortfall caused by the federal grant cuts. Michilla Blaise, a mayoral appointee to the school board, expressed confidence that this move would prevent disruptions in classrooms and provide much-needed financial stability for schools.
Blaise further noted that this measure also serves as a strategic safeguard, protecting school funding from potential future federal cutbacks.
Addressing Pension Reimbursements: An Ongoing Dialogue
While school finances are looking up, the issue of pension reimbursements remains a topic of discussion. The current CPS budget indicates that if more revenue becomes available, the district might consider partially reimbursing the city for pension costs related to non-teaching staff covered under the city’s pension plan.
This matter has historically been a point of contention between the city and the school district. In 2020, former Mayor Lori Lightfoot initiated an agreement requiring CPS to contribute to the city’s pension obligations. CPS made its most recent payment of $175 million towards its 2023 liability in early 2024.
Blaise suggested that the school board might address a new agreement during its October 23 meeting, aiming to assure alderpeople of CPS’s responsible use of the additional TIF dollars.
Broader Community Investments and Social Responsibility
Beyond education, Mayor Johnson’s budget proposal allocates $7 million to boost the pay of over 3,000 early childhood educators in city-supported programs. It also includes additional funding for critical summer youth employment initiatives.
In a progressive move, the budget introduces a new tax on social media companies. This tax would levy 50 cents per active user beyond 100,000 in Chicago, with city officials estimating an annual generation of $31 million. These funds are specifically designated to support mental health programs.
Mayor Johnson stated that this social media tax underscores the city’s commitment to holding large digital platforms accountable for their societal and mental health impacts on residents.
The Road Ahead for Chicago’s Budget
The comprehensive $16.6 billion city budget requires approval from at least 26 of Chicago’s 50 aldermen by year-end. If successfully passed, this budget would stand as one of the most significant education-focused financial plans in recent city history, signaling a pivotal shift towards utilizing local surpluses to ensure the sustained operation and improvement of Chicago’s schools.