If Chicago residents are curious why their taxes keep rising, they should look no further than Chicago Public Schools
CPS has consumed an ever‑increasing share of the city's property tax base while receiving unique, sizable subsidies from City Hall — subsidies unmatched anywhere else in Illinois. These added supports come at the expense of core city services such as public safety and infrastructure, undermining Chicago's efforts to stabilize its own budget while holding the line" on taxes.
Property taxes in Chicago doubled in the last 10 years, growing at 3.5 times the rate of inflation. For homeowners, the increase in taxes has been 10 times the rate of growth in their property values, creating an enormous burden for lower‑income families and those on fixed incomes. The biggest recipient of property tax growth has been the Chicago Public Schools, as the district’s tax revenues grew by over $2 billion. Yet during this period, the city also supplemented those increases by adding $1 billion in city subsidies.
Chicago’s cash cow
Since Mayor Rahm Emanuel, Chicago has increasingly treated its own budget as a cash cow for Chicago Public Schools, layering special subsidies on top of CPS’s already dominant claim on local and state education dollars. CPS receives roughly 56 percent of all property tax revenue collected by local governments in Chicago, about a quarter of all state K‑12 funding, and around 40 percent of all federal K‑12 dollars flowing into Illinois. In addition, the city provides over $1 billion more each year through dedicated teacher pension levies, majority share of the Tax Increment Financing (TIF) surplus, school capital debt service, fee waivers, and subsidized CTA student fares.
Those subsidies have deepened under Mayor Brandon Johnson. Like the Raymond Shaw character in the 1962 thriller The Manchurian Candidate, Johnson has faithfully advanced the Chicago Teachers Union’s agenda ahead of the broader public interest and nowhere is that clearer than in his fiscal policy. His proposed budgets explicitly prioritize CPS and CTU, helping bail out a district now struggling to fund back‑to‑back record labor contracts, including a recent deal totaling roughly $1.6 billion, the richest in city history. Rather than insisting on structural reforms at CPS — right‑sizing under‑enrolled schools, controlling payroll growth, aligning labor costs with enrollment — Johnson has chosen to protect CTU priorities and shift more of the burden onto the city’s budget and taxpayers.
To help cover these escalating obligations, Johnson’s City Hall has shifted hundreds of millions more in TIF property tax revenues to CPS, directing about $522 million in his proposed budget, bringing the total TIF diversion to $926 million over two years. That transfer, combined with other intergovernmental agreements and dedicated pension levies, is driving total city support for CPS to over $1.3 billion this year. Meanwhile, the mayor controlled Board of Education has raised property taxes $426 million in property taxes over two fiscal years, with a five‑year plan projecting another $1.2 billion in new tax hikes by 2030.
The district's insatiable appetite for more property taxes
Within Chicago, the collective levies of local governments grew by about $528.6 million in the latest tax year, reaching approximately $8.87 billion. The Chicago Public Schools account, which includes the CTRS levy, constitutes the largest share of Chicagoans' tax bills when the pension levy is included. CPS and other local governments together requested roughly $500 million more this year than the prior year, with CPS again pushing its property tax levy up to its legal limit.
The district pushes its levy upward to the limit each year, even as enrollment steadily declines — and even when school campuses were closed for 78 consecutive weeks during COVID. There was no exception even as the district was flooded with an unprecedented infusion of new revenues, including $2.8 billion in one‑time federal COVID funding and $1.3 billion in additional property tax revenues from the TIF program.
In the school district's FY 2026 budget, property tax collections are expected to reach over $4.2 billion, in addition to a record $522 million in TIF property tax revenues — over 50 percent more TIF money than last year. This will bring school district per‑pupil spending from property taxes alone to nearly $15,000, a fourfold increase since 2000.
The TIF shell game
Tax Increment Financing was originally sold as a tool to spur private investment in blighted areas. However, in Chicago, it has evolved into a parallel budget that diverts roughly $1.8 billion annually from the regular tax base. Because taxing bodies still demand full levies, every dollar captured by TIFs drives up tax rates for everyone else.
The result: Homeowners pay more while TIF funds act as a political slush fund for favored projects. Even as CTU decries inequity in the property‑tax system, its allied mayor routinely sweeps TIF surpluses back to CPS — quietly giving the district hundreds of millions in added revenue atop its already dominant share. This is a double hit on homeowners: Higher base levies and higher rates due to frozen TIF value.
City Hall could easily relieve pressure on taxpayers by requiring CPS to use its $522 million in TIF funds to pay its own obligations rather than relying on city subsidies, which only forces the city to raise its own taxes and fees and cut back on public services. Doing so could help avoid regressive new levies such as the Head Tax or the nation‑leading Cloud Tax on digital services, which are part of a slate of 22 new taxes and fees proposed in the mayor's budget — none of which is tied to income.
A spending problem, not a revenue problem
CPS does not suffer from a revenue shortage — it suffers from a spending addiction. The district's $10.2 billion annual budget equals nearly $34,000 per student, up a staggering 44 percent since 2019. Yet only 54 percent of that spending reaches classrooms. CPS now employs over 45,000 full‑time staff — one for every 7.3 students — including 23,000 non‑teaching employees, 11,000 more than the entire Chicago Police Department.
What does Chicago get in return for this record investment? Dismal outcomes. According to Wirepoints, only 11 percent of CPS’ Black students meet SAT reading standards, and just seven percent meet math benchmarks. Instead of acknowledging failure, school district and union leaders are eroding accountability — attacking standardized tests as racist and dismissing school‑choice advocates, including those supporting public charter schools, as segregationists.
Meanwhile, CPS systematically shortchanges public charter schools — the only public alternatives for thousands of Black and Latino families—funding them 36 percent less per pupil than district‑run schools while capping both enrollment and growth. The Illinois Network of Charter Schools reports that 98 percent of Chicago's 54,000 charter students are students of color. That disparity is both indefensible and discriminatory.
Toward fiscal and pension fairness
To restore financial stability, the City Council should require TIF surpluses to replace, not supplement, existing city subsidies to CPS. This would begin to unwind the corrosive fiscal relationship between city and district. The next crucial step is for Chicago's leaders — and their unions — to press Springfield to provide pension equity.
If the state funded the Chicago Teachers' Pension Fund at the same rate it supports downstate and suburban teacher pensions, the city could redeploy the city’s dedicated Chicago teachers' pension fund property tax levy to finance the city employee pension funds which would provide an additional $600 annually and growing. That change alone could stabilize police and fire pension funds while also freeing up about $170 million annually that the school district spends on teacher pensions.
Today, the state covers only 32 percent of Chicago's teacher pension costs, compared to 98 percent for every other Illinois district. That disparity is indefensible. Pension equity is not a bailout — it's fairness. And achieving it wouldn't require more state spending, merely parity in distribution formulas.
By contrast, the CTU's demand for $1.6 billion in new state funding would require nearly $7 billion more statewide — an unrealistic and irresponsible request.
A call for accountability
CPS does not suffer from a revenue problem — it has a spending problem. Unfortunately, school district leaders have long collaborated with the Chicago Teachers Union to preserve the status quo. The administration seeks to sustain its resource‑consuming bureaucracy and maintain control over local school resources. CTU leaders depend on the central administration to enforce their contract, which increases their membership and benefits while protecting the union's education monopoly.
It's time to face reality: CPS is the single largest driver of rising property taxes as well as other city taxes and fees. The district's appetite has distorted Chicago's fiscal priorities for years. If the city is serious about addressing its long‑term financial crisis, it must stop functioning as CPS's perpetual cash machine and force the school district to operate responsibly and effectively.
Governor J.B. Pritzker should consider reviving the Chicago School Finance Authority — the independent body originally created in 1980 — to oversee CPS finances and enforce fiscal discipline. Until then, Chicago taxpayers will continue paying more while getting less — not because of underfunding, but because of misspending.
Ultimately, as history has taught, the state will be forced to step in. Better sooner than later.
