As expected, CPS budget is off to a bad start and the outlook is bleak
Chicago Public Schools faces another massive budget shortfall — $734 million for fiscal year 2026, assuming the city covers its $175 million municipal pension obligation. If Chicago doesn't step in, the deficit balloons closer to $900 million. The crisis stems from three converging pressures: Collapsing enrollment, the expiration of federal COVID-19 relief funds, and a teachers' contract whose costs the district cannot sustain. Compounding the problem is the city's own fiscal stress, which would severely limit Chicago's ability to rescue the school district.
CPS is implementing preliminary cuts while lobbying Springfield for increased state funding. Chicago Teachers Union leadership has rejected the necessity of these cuts outright. Last week, in response to CPS revealing proposed cuts to staff, CTU President Stacy Davis-Gates declared the district's budget "dead on arrival" before the budget was formally introduced and insisted that the district's massive one-time TIF windfall should become a permanent revenue stream.
CPS claims it needs $1.6 billion more in state funding based on Illinois' Evidence-Based Funding (EBF) formula — the state's educator-created "adequacy formula." As late as August 2025, CTU leaders were claiming the district was being shortchanged by $2 billion. The formula, developed by educators and monitored by educators at the Illinois State Board of Education, functions as a vehicle for demanding large annual funding increases but has no relationship to actual school performance or student outcomes.
CPS already spends over $32,000 per student when operational costs are included and has one budgeted employee for every 6.8 students, including more than 22,000 non-teaching employees. Since pre-COVID 2019, the district has received outsized funding: 58 percent of Chicago property taxes, 25 percent of state K-12 funding, and approximately 40 percent of federal K-12 funding. Additionally, CPS received nearly $4.7 billion in combined federal COVID relief and additional property tax revenues from TIF surplus. The whole of this windfall has been squandered. Worsening matters, only 54 percent of the district's funding actually ends up in schools; the remainder is absorbed by central and regional offices.
The district has seen per-pupil funding grow by an astonishing 44 percent since 2019 while adding over 9,000 budgeted full-time positions — more than 20 percent — despite enrollment plummeting by over 45,000 students, or more than 11 percent. This demand comes from a district that already spends over $32,000 per student and, according to CPS's own staffing data, maintains one budgeted employee for every 6.8 students, including more than 22,000 non-teaching employees.
With teachers and support staff among the highest-paid, if not the highest paid, in large-city school districts, the new contract — along with the massive staffing increase — means the district faces a second record-setting public employee contract at approximately $1.6 billion in cost. Concurrently, the CTU blocks efforts to right-size the system, keeping scores of buildings near-empty and diverting resources from fully enrolled neighborhood and magnet schools.
The district spends millions yearly on near-empty schools, with one in three desks empty in 58 percent of schools — 275 school buildings — including twenty operating at less than 25 percent capacity. CTU is forcing the district to absorb closed charter schools that have their members, further driving up costs. Converting five ACERO schools will cost approximately $21–28 million next year. Meanwhile, CPS expands CTU's "sustainable community school model," despite high costs and both abysmal proficiency and attendance rates.
While CTU pursues this strategy, the significant increase in per-pupil funding fails to achieve the desired results of improving student proficiency. Unfortunately, prior to the state lowering proficiency standards, only one-third of city students were proficient in reading and one-sixth in math, while Black and Latino proficiency levels were significantly lower. As student chronic absenteeism exceeds 40 percent districtwide, the high school chronic absenteeism grew from 43 percent for freshmen to approximately 72 percent for seniors.
For the time being, the school district works overtime to deny families alternatives to their often failing and under-enrolled neighborhood schools. The union has lobbied to cap public charter school enrollment through collective bargaining, block expansion of alternative school models, and oppose state tax-credit scholarships that give low-income minority families the financial means to attend private schools. CTU’s actions most impact low-income and minority students in Chicago.
There's an opportunity to balance the school district's budget while weaning schools off the city's annual subsidies, which could then be redirected to meet the city's own financial needs. To do so, following actions should be taken:
- Return to pre-COVID non-teaching staffing levels and give principals and elected Local School Councils full autonomy over their school budgets. These positions are valued at over $600 million and would still leave the district with a ratio of one staff person for every 8.5 students.
- Break up CPS's central and regional offices and decentralize the district so money follows students. Currently, only 54 percent of school funding is received by the schools. There are 7,500 school staff positions not assigned to individual schools.
- Consolidate and repurpose near-empty schools, which could save $100 million. Schools could be leased to any of the district's over 100 public charters—over 90 percent of which are not in public school buildings — generating comparable revenue.
- Expand charters, magnet schools, and school-based magnet programs to attract more students and generate more state and federal aid.
- Empower communities, especially parents, through elected Local School Councils and their principals to control their budgets and staffing models and to select more effective, proven school models. This would make schools more appealing, helping to attract and retain students.
- Make pension equity for Chicago teachers the top state legislative priority. The state covers 98 percent of downstate teachers' pension contributions but only 32 percent for Chicago. Pension equity could free up almost $600 million annually.
- Support Illinois participation in federal education scholarship programs, which by some estimates could generate upwards of $900 million in grants for families —not only to pay private school tuition but for tutors, early childhood services, special education assistance, and more.
- Effectively use artificial intelligence to improve school management and operations and, most importantly, support instruction. The ability to dramatically expand instructional supports for classroom teachers and instructional time-on-task for students is potentially unlimited.
Real financial accountability is unlikely while CPS leadership and CTU continue doing business as usual. Bureaucrats maintain central control while CTU relies on it to enforce contracts. Governor J.B. Pritzker should reestablish the Chicago School Finance Authority, which from 1980 to 1996 provided fiscal oversight. A revived authority could bring fiscal discipline and end CPS's dependence on city subsidies.
Schools CEO Dr. Macquline King may be doing her best under the present circumstances, but record union contracts and CTU-driven policies continue to drive up costs and degrade educational choices. As King continues to navigate CPS, the union will continue to oppose lower-cost but higher-quality education alternatives or the introduction of cutting-edge education technology that jeopardizes staffing numbers or adds to members' workload, and it will oppose opportunities to secure new funding if it includes public support for private school education.
Is there hope? As of March 2026, the Chicago Teachers Union's popularity had fallen to a record low, with only 27.5 percent of Chicago voters holding a favorable opinion and 53.6 percent viewing the union unfavorably. Will that embolden the City Council to demand more scrutiny over the schools and the supplemental funding it provides, and Governor Pritzker to opt into the federal scholarship program and contemplate the return of the Chicago School Finance Authority?
