Chicago mayor Johnson proposes $16.6 billion budget, increases funding for public schools
Chicago Mayor Brandon Johnson has proposed a $16.6 billion city budget for 2026, allocating $552.4 million to Chicago Public Schools (CPS) — a substantial increase from the $379 million the school board projected when it passed its own $10.2 billion budget in August. The proposal, unveiled Thursday, aims to stabilise school finances, protect classroom programs, and offset federal funding losses.
More funding to avoid midyear cuts
According to Chalkbeat, the additional $173 million for CPS would prevent midyear spending cuts and help the district fill gaps left by the Trump administration’s cancellation of magnet school grants. The boost could also enable the school board to make a pension reimbursement payment to the city, though that is not factored into the 2026 city plan.Johnson said the funds would be used to safeguard teaching staff, restore student support programs, and ensure that school employees receive their pension benefits.
TIF surplus to support schools
A key source of the new funding comes from the city’s surplus in special taxing districts known as Tax Increment Financing (TIF) areas. These zones collect more than $1 billion in property taxes annually to spur development in underinvested neighbourhoods. Money not committed to ongoing projects can be declared surplus, with CPS legally entitled to 52 percent of those funds.The mayor declared a record TIF surplus this year, which Chalkbeat reports will help fill an $8 million shortfall created by the federal grant cuts. School board member Michilla Blaise, a mayoral appointee, said the decision would prevent classroom disruptions and provide financial stability for schools.Blaise also said the measure is designed to protect school funding from potential future federal cuts.
Pension payment still under review
The question of pension reimbursements remains unresolved. CPS’ current budget notes that if additional revenue becomes available, the district may consider reimbursing the city for part of the pension costs of non-teaching staff covered under the city plan.The issue has been a point of friction between the city and the school district for years. Former Mayor Lori Lightfoot established an agreement in 2020 requiring CPS to contribute to the city’s pension obligations. The district made its last payment in early 2024, sending $175 million toward the 2023 liability.Blaise told Chalkbeat the board could discuss a new agreement at its October 23 meeting to reassure alderpeople that CPS will use the additional TIF dollars responsibly.
Investments beyond schools
Johnson’s proposal also sets aside $7 million to raise pay for more than 3,000 early childhood educators at city-supported programs and allocates additional money for summer youth employment.The budget introduces a new tax on social media companies, which would charge 50 cents per active user beyond 100,000 in Chicago. City officials estimate the measure will generate $31 million annually to fund mental health programs.Johnson said the tax reflects the city’s effort to hold large digital platforms accountable for their social and mental health impacts.
Next steps
The $16.6 billion city budget requires approval from at least 26 of Chicago’s 50 aldermen before year-end. If passed, it would represent one of the largest education-focused budgets in recent city history, marking a significant shift toward using local surpluses to sustain school operations.
