Chicago Public School leaders on Wednesday presented a budget proposal, wiping away a $734 million deficit by a combination of mechanisms: cuts to operations and central office, refinancing debt, using $65 million from a reserve fund, counting a philanthropic donation in the budget and expecting $379 million from the city from a TIF surplus.
Under the plan, the school district will give the city a $175 million municipal pension payment, but with an asterisk — only if it gets more revenue from the state or even more money from a tax increment financing district surplus. TIFs are special taxing districts in the city.
School district officials say CPS can balance its budget without taking out a loan, which had been floated to eliminate the budget deficit last year. Many worry about the school district, which is already deep in debt, taking on more.
“We have reviewed every line to come up with a plan that is student-centered and equitable,” said CPS Budget Director Mike Sitkowski, noting that the school district did what it could to protect school-level budgets.
Some school board members said they see the budget as a “draft” that could change before they voted on the plan for this school year on Aug. 28. CPS will hold two budget hearings Tuesday, at 1 p.m. and at 4 p.m.
Michilla Blaise was the first board member to bring up that the plan includes big risky assumptions, by counting on $379 million in TIF surplus, without a guarantee that the school district will make the municipal pension payment.
“This, for me, comes down to being a good partner,” she said. “We need to be a good partner. This feels like bizarroland to me. These are our employees, this is their pension payment.”
Chicago Board of Education Member Michilla Blaise (second from right) questions a new budget proposal presented during an agenda review committee meeting at CPS headquarters in the Loop on Wednesday.
Candace Dane Chambers/Sun-Times
Board member Jitu Brown also said he is worried that this plan was not politically feasible. Another board member, Emma Lozano, said she believes this plan will fail.
But board member Jessica Biggs pointed out that Mayor Brandon Johnson’s transition committee said as he came into office that CPS should not be making this pension payment.
Sitkowski said CPS received $379 million last year from TIF surplus, which is why he felt comfortable including that much this year.
The city wants CPS to give it $175 million to help pay the employee contribution of the municipal pension fund. Though it is solely the responsibility of the city, more than half of the pensioners are former CPS employees who are not teachers.
Some board members say they are worried about the consequences of not paying. CPS is counting on the city providing it $379 million by declaring TIF surpluses.
The size of the surplus is up to the mayor, but the City Council must approve it. Board members say they have been told it might be difficult to deliver all that TIF surplus money if they turn down the city’s request to pay the municipal pension payment.
But Ald. Andre Vasquez (40th) said he supports CPS refusing to make the payment.
“I think the city should be the one making the pension payment. I think statutorily we’re the ones that do it. We also have more ability to raise revenue than the Board of Education … we’re saddling them with more of a problem that they can’t solve their way out of,” said Vasquez, referring to the fact that CPS has a cap on how much it can increase property taxes per year.
The proposed budget zeroes out the deficit, which was down to $569 after cuts this summer, by: saving another $126 million, mostly through central office cutbacks; identifying an extra $149 million in revenue, including by increasing what CPS is expected from the city TIF surplus; accelerating debt refinancing to get $29 million savings this year rather than next year; tapping into $90 million into one-time funding sources, including from a debt service stabilization fund; only making the $175 million municipal pension payment if CPS gets extra state TIF surplus revenue or other local resources.
CPS Budget Director Mike Sitkowski presents a new budget proposal during an agenda review committee meeting at the CPS headquarters in the Loop, Wednesday, August 13, 2025.
Candace Dane Chambers/Sun-Times
The board members were ushered into the meeting by chants of “no cuts” and dozens of people in purple union shirts holding brooms and mops.
Member Karen Zaccor said she and others have heard from residents in her district that they do not want the school district to cut its way out of the deficit.
She said if that means CPS needs to take out a loan to close the deficit, then she will vote for it.
“I have been asking my constituents if we have to choose between making cuts or taking out a loan, what should we do. These are parents we are talking to. They say take out a loan; don’t cut our schools, and I think that is what we are hearing loud and clear,” said Zaccor, who is one of 10 members appointed by the mayor.
When CPS discussed taking a loan in the past, many, including some board members, expressed concern about paying high interest rates that will hamstring what the school district can provide in the future.
Zaccor addressed those concerns: “It is all bad, and you have to choose what is less bad, less terrible. We can not sacrifice our children now,” she said.
She and appointed member Emma Lozano said they are not sure whether CPS should pay the municipal pension payment that has long been a source of controversy.
Board members are already getting blowback from cuts announced earlier this summer to close the budget gap. CPS has sent layoff notices to 500 custodians, 250 lunchroom staff and 100 crossing guards.
Several community groups held a news conference calling on the school district to maintain staffing levels and urging people to call the governor to urge him to provide more state funding.
SEIU members and supporters rallied outside the CPS headquarters in the Loop on Wednesday. The union is demanding that CPS reverse its decision to eliminate 500 custodian jobs.
Candace Dane Chambers/Sun-Times
They were followed by a news conference by SEIU, which represents special education aides, custodians and crossing guards. The union rallied to demand that CPS rescind the decision about custodians. CPS told 1,250 custodians that their jobs with private custodial companies are being eliminated at the end of September. They can reapply to work for the school district, but only 750 will be hired back.
Rebeca Salazar said she has worked for a private custodian company for 25 years. Her husband is also a CPS custodian.
“We will be left with nothing,” she said. “I have been dedicated 25 years, and now I will have to start all over. My love and dedication to this school district go behind my job.”
Sarah Karp covers education for WBEZ. Follow her on X @WBEZeducation and @sskedreporter.
Contributing: Mariah Woelfel