The school board posted a budget amendment Wednesday afternoon that opens the door for Mayor Brandon Johnson’s office to take out a loan on behalf of Chicago Public Schools.
CPS’ budget has been in the spotlight in recent weeks due to a gaping hole in its 2025 budget. The district approved a $9.9 billion budget last July without accounting for the costs of a new, unsettled teachers contract or a $175 pension payment to the city.
But notably, in an unprecedented move through new language posted to the district’s website, the budget amendment provides a clause for how the district can cover its gap.
According to the amended budget language, if CPS can’t balance its books through additional tax increment financing surplus — extra money from the city’s taxing districts — it can consider “appropriate local revenue, which may include other entities incurring debt on CPS’s behalf.” The alternative, the amendment states, is budget cuts.
Finance experts say that how the budget is balanced will have financial implications for CPS for years to come. This year’s amendment process was unusual.
“Normally, the Board of Education passes a budget amendment after our contract is settled and the related costs are agreed to by CTU and CPS. This time the sequence has been altered,” the Chicago Teachers Union said in an emailed statement sent out earlier in the day.
Two public hearings are scheduled for the end of next week on the 21-member school board’s proposed amendment. It will require 2/3rds of 20 board members’ votes to pass. (Board president Sean Harden only votes if there is a tie).
Financial decisions must be made by March 30, because the city’s fiscal year ended Dec. 31. The board recently hired the outside financial advisory firm Baker Tilly to provide an opinion on the financial bind, but its report has yet to be released.
The mayor used to have full control over the school board. But in a recent move to a partially-elected school board, the city has tried to disentangle itself financially from the district. While the city is legally obligated to make the $175 million pension payment, the majority of staff covered by the municipal pension fund are current or former non-teacher CPS staff.
When the city’s budget was closed at the end of last year, CPS received a record of about $300 million in TIF surplus. After accounting for other obligations, $139 million is available for the district—not enough to cover the contract costs and the pension payment.
CTU has been negotiating a new contract with the district since last April, and union members indicated at a board meeting on Wednesday that both sides are close to an agreement. The union could not provide an estimate to the Tribune about the cost of its latest proposal.
“We are at the stage of negotiations now that will decide if we are headed toward a big, messy, unnecessary fight,” said Thad Goodchild, CTU’s deputy general counsel to board members. “We submitted to CPS today a last, best and final offer that should land this contract. Let’s not snatch defeat from the jaws of victory.”
