Chicago Public Schools to Present Balanced Fiscal Year 2027 Budget that Closes $732 Million Deficit, Prioritizes Students

CHICAGO - The Chicago Public Schools’ (CPS) proposed FY2027 budget closes a $732 million deficit, still fully protects classroom size, student learning, and the District’s commitments to its labor partners. Additionally, due to feedback over the past week, the proposed budget no longer calls for five proposed furlough days for all CPS employees. Under Illinois law, CPS publishes a tentative budget 15 days in advance to allow public review and comment. Following two public hearings and additional community feedback, the District revised its proposal in advance of Thursday’s Chicago Board of Education when the budget will be considered for approval.

The District is asking the Board to approve the fiscal year 2027 budget Thursday in order to secure short-term loans and make payroll in September amid an ongoing multi-year delay receiving property tax installments, costing the District more than $80 million in interest alone since 2020. In addition to being delayed, this year’s first installment also fell short by approximately $250 million, challenging a budget and cash flow predominately fueled by property taxes.

The proposed $9.96 billion budget reflects feedback that CPS received from school communities and partners over the past two consecutive years of community roundtables organized under CPS CEO/Superintendent Dr. Macquline King, a former CPS student, teacher principal, and parent who stepped into the top role in June 2025 amid both growing financial constraints and student needs.

“We have navigated incredibly difficult decisions over the past few months, including a mix of staff and resource reductions and yet our north star remains clear: preserving a high-quality education for our students,” said Dr. King. “We have prioritized classroom budgets to maintain a strong core of licensed educators and reasonable class sizes that honor our agreements with our teachers. It is never easy for an educator to make cuts to our system but I am confident that we have been as strategic as possible in an effort to maintain our classroom offerings and support services.”

UPDATED TIF ASSUMPTION
District leadership revised its proposed budget, eliminating the five proposed furlough days for all CPS employees in response to public feedback received during the statutory budget review period. To maintain the balanced budget by state law, the District increased its assumed TIF surplus revenue from $200 million to $285 million.

Because the City of Chicago does not declare its annual TIF surplus until later in the calendar year, CPS must develop its budget using an estimated TIF surplus assumption. The District’s initial posted tentative budget included a $200 million surplus assumption. Following public feedback on the proposed furlough days, District leadership reassessed that assumption and concluded that a $285 million estimate remains reasonable given recent TIF surplus history while continuing to budget well below recent actual receipts. The revised assumption remains substantially below both the $379 million CPS budgeted for FY2026 and the $576 million the District ultimately received in FY2026.

The update follows the intended purpose of posting the tentative budget in advance to allow feedback during two recent budget hearings. Feedback opposing the proposed furlough days came from across the CPS community, including Board of Education members, labor partners, CPS employees, families, and community members who testified during the public hearing and submitted written comments. The consistent message was that the proposed furlough days could not be supported.

“We have worked to listen to as many CPS voices as possible,” said CEO/Superintendent Dr. King. “It became clear that to alleviate any potential stressors or possible disruption to the start of the school year, we needed to update the proposed budget. Our updated TIF assumption of $285 million remains a conservative estimate given the recent history of TIF surplus declarations, representing approximately half of what the District received last year.”

FY27 SCHOOL BUDGETS
CPS’ school budgets annually precede the development of the final District balanced budget. The District last week posted individual fiscal year 2027 school budgets that demonstrate that CPS has maintained total school funding when compared with the previous school year. Despite making reductions to close the deficit, school budgets are essentially flat compared to last year. Year over year shows an overall $143 million increase in school funding due to salary increases for unionized school-based employees.

While the aggregate funding has remained whole, individual school budgets reflect adjustments over last year. Working closely with their Local School Councils, principals tailor staffing to meet their communities' unique needs—balancing enrollment shifts, programmatic changes, and budgetary realities, including some updated Districtwide staffing formulas.

Those adjustments resulted in 1,601 reductions; 759 teachers, 801 education support personnel positions, and 41 assistant principals. Together, these school-level cuts as well as other school-based efficiencies helped reduce the deficit by $163.4 million.

Historically, 65 to 85 percent of teachers who are impacted in the summer budget review cycle are able to find new roles within the District due to annual attrition and subsequent new vacancies which are estimated in the 1700 range.

The impacts occurred upon a strategic review of staffing to ensure that positions are filled across the District, in order to better respond to schools in typically under-resourced communities. The strategy has led to fewer vacancies, for example, for special education positions, even as those positions have increased over the past few years to support an increasing special education student population.

"As part of the District's annual workforce planning and budgeting process, school leaders and their LSC make staffing and budget decisions that are based on enrollment and each school's programmatic needs,” said Chief Education Officer Dr. Karime Asaf. “Our Budget team and Office of Network Support have also worked very closely with school leaders to protect the best learning experience for our wonderful CPS scholars.”

STAFFING ALLOCATIONS
Overall, District-managed schools are down 164 positions from last year but still up by nearly 9,000 (8,700) positions since 2019.

For FY27, the District increased core teacher-to-student allocation ratios by one student to account for changing student needs and declining District enrollment. Importantly, even with this slight increase in the teacher to student allocation ratio, class size limits will not change — these limits are determined by collective bargaining agreements with labor partners to protect class sizes. Additionally, CPS annually sets aside funding to hire additional teachers if class sizes exceed contractual limits. Last year, the District put dozens of additional teachers and more than 100 classroom assistants in classrooms across the District amid bumps in class sizes.

CPS instituted loss caps to ensure no elementary school lost more than four foundational teacher positions, and no high school lost more than six foundational teacher positions, regardless of how much a school’s enrollment or Opportunity Index score changed from the previous year. Schools may experience other staffing adjustments based on enrollment, student need, programmatic changes or school-level discretionary funding decisions.

As part of its annual review of school staffing formulas, the District updated the foundational assistant principal allocation for schools with fewer than 250 students. Under the revised model, these schools no longer automatically receive a centrally funded assistant principal position. The change recognizes that smaller schools often have different administrative needs while preserving flexibility for principals and Local School Councils to determine how best to allocate available resources. Schools remained eligible to retain an assistant principal using discretionary funding based on their individual operational and instructional needs. As a result, approximately two-third of schools initially affected by the change retained an assistant principal through school-level funding decisions. In the end, 41 schools no longer have a dedicated assistant principal position this school year. Even in those schools, staffing levels remain strong, with an average student-to-staff ratio below 9:1 and a student-to-teacher ratio of approximately 16:1. In addition, the majority of these schools continue to have other instructional leadership or student support positions, such as lead coaches, interventionists, programmatic coordinators, or other school support staff, to help meet the needs of students and school communities.

SPECIAL EDUCATION
The District will hire about 1,000 additional special education staff members, primarily teachers and special education classroom assistants (SECAs).


The Office for Students with Disabilities uses a data-driven staffing methodology in which every special education teaching position is driven by school programming and the documented needs of students as identified in their IEPs. Using March 2026 IEP data, the same methodology is applied consistently across all CPS schools so that schools with greater documented student needs receive greater staffing. This approach promotes equity by aligning resources to student need rather than historical staffing patterns or school location.


"Our responsibility is to ensure every student with a disability receives the services outlined in their Individualized Education Program," said Josh Long, Chief of the Office for Students with Disabilities. "For too long, staffing decisions relied too heavily on historical allocations instead of where students actually were and what services they required. Our staffing resources should follow students as they move between schools, enrollment shifts and evolving needs. By grounding every staffing decision in current IEP data, CPS is replacing historical guesswork with documented student need. This approach helps correct longstanding inequities in the distribution of special education staff and directs resources to the schools and classrooms where students need them most."


Finally, the District has established retention pools for special education teachers and special education classroom assistants impacted by the school-level adjustments earlier this month. The pools help ensure CPS maintains these in-demand professionals, a strategy that has contributed to a decline in vacancies for these educators.

SUPPORT SERVICES & SAFETY
The budget preserves the majority of the Out-of School-Time funding for extracurricular activities and programming, reverting to pre-pandemic funding sources and leveraging dedicated state grants. In keeping with feedback from CPS families, the District continues to prioritize school safety, maintaining crossing guards, as well as the Safe Passage and Safe Haven programs.


The District will add 10 new Climate Team security officers for a total of 40 who are full time, non-police CPS security officers. These officers will report to the Office of Safety and Security but will be assigned to schools on a daily basis to support special events and any emerging safety concerns.


“These teams are nimble and flexible with a focus on providing support and service to our principals, faculty, students and community members,” said Chief Operating Officer Charles Mayfield. “They play a critical role in making sure our schools are welcoming, safe and inclusive teaching and learning environments.”

Central Office & Citywide Reductions
Over the past two budget cycles (fiscal years 2026 and 2027), the District has reduced the central office and citywide staff by 323 employees, closed vacant positions, and implemented a hiring freeze. The District, which issued impact notifications earlier in July to 161 non-unionized central office and citywide employees, will also suspend all raises for non-unionized central office employees this year as part of the proposed budget. The reductions to staff, frozen positions and salaries as well as other cost-saving measures at the central office reduces the deficit by about $176.8 million.

Salaries and operations for the central office account for about four percent of the total CPS budget, with the majority of funding going toward school operations.
"We remain grateful for the dedication of the staff members affected by these changes,” said CEO/Superintendent Dr. King. “This decision is in no way a reflection of their talent or impact on our community. Unfortunately, to navigate our current fiscal challenges while protecting the vital daily services our students rely on, we had to make these difficult adjustments."
Through central office cost-saving measures and deficit reduction strategies, the District has minimized disruptions and displacements at schools as much as possible. All personnel adjustments align with collective bargaining agreements, and the Talent Office is actively helping affected employees secure roles for the upcoming school year.

FISCAL RESPONSIBILITY
The budget aims to support continued academic progress from preschool through high school. CPS continues to set new District records for scholarship dollars earned, early college credit attained, and rates of college enrollment and persistence.

In addition to making reductions to close the deficit, the District also identified $110.6 million in new revenue, including $17.6 million in higher-than-projected Evidence-Based Funding from the state. The District closed the updated budget with some assumptions, including $285 million in surplus Tax Increment Finance (TIF) funds from the City of Chicago. In FY26, CPS budgeted for $379 million in TIF surplus revenue and ended up with $576 million; $175 went back to the City for MEABF, leaving CPS with over $400 million in additional revenue.

An overview of the FY27 budget and details of the cost savings can be found in the District’s nearly 300-page budget book. Approximately $6.29 Billion or 63 percent of CPS’ total budget is used to pay for the salaries and benefits of CPS employees. This includes school-based staff such as teachers, principals, teacher aides, security officers, school clerks, cooks, and janitors; city-wide support staff such as coaches, clinicians, nurses, social workers and speech pathologists; central office staff that provide administrative and programmatic support to the schools; and network office staff that support schools as they are grouped into 17 networks across the city.

Another 23 percent of CPS’ total budget or $2.28 Billion is used to pay for non-personnel expenses, which are the costs required to keep schools running. This includes commodities such as food and utilities, instructional supplies, building supplies, and software. It also includes equipment like furniture and computers, transportation via an outsourced school bus fleet or CTA passes, and funds for discretionary purchases. Lastly, non-personnel costs also include the tuition to charter schools, which funds salaries and benefits for charter school staff, as well as operational costs for charters.

A debt budget represents the amount of funds allocated to make annual principal and interest payments on the District’s legacy long-term debt. Importantly, the District’s proposed FY27 budget does not add to the District’s existing debt burden of $9 billion which is estimated to cost about $700 million in repayments this school year, siphoning resources from teaching and learning. In fact, the reductions made in the proposed FY27 budget should reduce CPS’ structural deficit by more than $330 million.

While credit ratings have been upgraded in recent years, CPS remains the largest U.S. municipal junk bond issuer, meaning major rating agencies consider District bonds non-investment grade, enabling investors to charge higher interest rates to buy CPS debt and making it more costly to make critical capital investments.

This year, $600 million has been allocated to the capital budget which represents the amount of funds allocated for long-term investments in school facilities, including building construction, renovations, and infrastructure-based technology like high-speed internet. This money is raised largely through the issuance of bonds, which are debt instruments like loans, and require annual payments on the bond principal and interest.

CPS is firmly committed to maximizing the impact of every dollar spent for students and families. The District allocated 63 cents (63%) of every dollar in its operating budget directly to school-based expenditures and positions. Additionally, 32 cents (32%) is directed towards citywide services and personnel that benefit multiple schools, including nurses, custodians, bus aides, and others, ensuring comprehensive support for all students. Just four cents (4%) of every dollar goes towards central office support.

PUBLIC EDUCATION FUNDING ADVOCACY
District officials recognize work must continue to address mounting financial pressures at every level — federal, state, and local. The budget aims to provide CPS with the necessary time to collaborate with government partners in order to identify additional revenue solutions. This includes exploring the possibility of securing additional local, state and federal funding. In the event of a worst-case scenario and these additional funds do not materialize, CPS will be forced to implement the more dramatic measures called for in the budget such as a mid-year spending freeze to maintain cost control.

At the federal level, pandemic-era aid has expired, and federal funding has been stagnant or declining, particularly as it relates to supporting students with disabilities.

State education funding only contributed 73 percent of what CPS needs for “adequate” funding according to the state’s own formula in fiscal year 2026, down from 79 percent in fiscal year 2025 and 81 percent in FY2024 — an eight-point drop in two years. The state’s target had been 90 percent adequacy by FY2027 which would require an additional $985 million. The District also faces shortfalls in state block grants and mandated categorical grants, which cover private school tuition, transportation, and school lunch programs, compounded by inequities in teacher pension coverage and capital funding authority.

Finally, CPS’ primary revenue lever remains the annual property tax levy and that is capped at five percent or the rate of inflation, whichever is lower. Grants, reimbursements, and philanthropy help but cannot replace sustainable, dedicated funding streams needed to ensure a stable, high-quality education for all students. CPS remains committed to advocating for changes to support students and schools. Some priority next steps include:

Partner with the Board, local and State officials, other districts and public education organizations to support fully funding the Evidence-Based Funding Formula.

Work with county officials to resolve the impacts of delayed tax payments.

Advocate for the State to increase its contribution toward teacher pensions from 35 percent to nearly 100 percent of CPS’ teacher pension, in line with funding for other Illinois school districts.

Advocate for full funding of the State’s mandated categorical grants.

Advocate for increased funding of federal formula grants and continue pursuing available grant opportunities at the local, state, and federal level.

Advocate for more tools to raise money for capital improvements.

Importantly, CPS continues to ensure CPS families are informed and engaged on budget matters. Approximately 600 people participated - including students - in the second consecutive year of summer community roundtables. Participants at the seven sessions - including one just for students - expressed strong concerns about a number of issues, from custodial staffing levels and school cleanliness, to special education resources, support for multilingual learners, and after-school programming. Both students and adults shared that they want to continue to partner with the District to shape decisions and advocate for funding. CPS will continue talking to students, parents and community members about the District’s financial issues and future advocacy opportunities.

The CPS fiscal year begins July 1 and historically, the District’s annual budget has been approved at a summer Board meeting. The budget must be approved by a simple majority; 11 affirmative votes. The new school year starts for all K–12 students on Monday, August 24, with CPS pre-k students returning one day later on Tuesday, August 25.

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