Chicago Public Schools presented a balanced fiscal year 2026 budget proposal at an Aug. 19 public hearing that district officials said protects school funding and labor agreements while closing a $734 million projected deficit.

Budget staff member Mike Sikalski said the proposed $10.25 billion FY26 budget "is a budget that protects our schools," and the plan will be brought to the Chicago Board of Education for approval at the board meeting on Aug. 28.

Why it matters: The proposal seeks to avoid midyear classroom cuts and furlough days by using a mix of non‑classroom savings, new revenues, one‑time funds and debt‑refinancing savings. It also defines reimbursement to the city for the Municipal Employees’ Annuity and Benefit Fund (MEABF) as contingent on additional state revenue, additional TIF (tax increment financing) surplus revenue, or other local resources, not as an automatic payment.

Key elements of the proposal and public reaction

The district told the board it closed the FY26 gap with a combination of measures rather than reopening school budgets. Officials listed roughly $126 million in additional savings away from classrooms, $149 million in additional available revenues (including a roughly $45 million increase from the state’s evidence‑based funding and an increased TIF assumption), $29 million from accelerating debt refunding savings, $90 million in one‑time funding, and $175 million in savings contingent on not making the MEABF reimbursement absent new revenue. CPS staff said the district will still issue $1.8 billion in debt this year for refinancing and $600 million for capital projects already authorized.

Many speakers at the hearing urged the board to avoid cuts that would affect the lowest‑paid school employees and students. Diane Castro, financial secretary of the Chicago Teachers Union, said board members must "take every step to avoid potential cuts or furloughs" and criticized any budget that would defer pension obligations for paraprofessionals. Caroline Rutherford, vice chair of the CTU’s charter division, said it would be "not ethical financial leadership" to balance the district by not making required employer pension payments for low‑paid staff.

Labor leaders and advocacy groups were split on the use of borrowing. Tremaine Reeves, director of the CPS division of SEIU Local 73, praised the proposed budget for protecting staff and students and warned that taking a high‑interest loan could lead to layoffs and deeper cuts later. By contrast, some parents and community members urged the board to keep borrowing on the table if it prevents midyear cuts to classrooms.

District officials warned of the long‑term costs and ratings risks of borrowing for operating expenses. Chief Financial Officer Miroslav Krug and other finance staff said short‑term or high‑interest borrowing for operations would increase future interest costs, risk a credit downgrade, and could reduce refinancing savings the district plans to capture this year. Krug’s presentation warned that a hypothetical $200 million loan could more than double in cost once interest and fees are included and would increase future budget pressure.

Operational clarifications raised by staff

Chief Operating Officer Charles Mayfield responded to several public concerns about school meals, saying "hot nutritious meals aren't going away" and that a small number of schools temporarily served cold lunches because of equipment problems after flooding.

The budget team also explained how some school‑level positions were reclassified (for example, some dual language coordinator roles and English language program teacher roles were aligned), said there is $30 million in a reserve for new special education positions expected to respond to in‑year needs, and noted that the district added about $80 million back to the transportation budget to fund required student transportation.

What the board and community pressed for

Public commenters — parents, union representatives, community council leaders and school staff — repeatedly pressed the board to protect paraprofessional pensions, special education supports, custodial services, lunch programs and other school‑level services. Vicky Willis, a parent and retired CPS teacher, described personal impacts she says followed past budget cuts to special education staffing. Several speakers from community organizations representing Little Village, Humboldt Park and other neighborhoods said the proposed cuts would disproportionately affect Latino and Black students and neighborhoods.

Board members also asked staff for more specifics. Several members requested line‑item detail on the $126 million in central‑office reductions and asked for written contingency plans in case assumed additional TIF or state revenues do not materialize.

Decisions and next steps

No formal vote occurred at the Aug. 19 hearing. The administration said it will present the balanced FY26 budget for formal approval at the Chicago Board of Education meeting on Aug. 28. The budget as presented defines the MEABF reimbursement to the city as contingent on additional state or local revenue; it does not commit CPS to pay without that revenue.

Discussion versus decision: The hearing recorded public comment, staff presentations and board member questions (discussion). The administration has presented a proposed budget (direction to be considered at the next board meeting) but did not take a final board action or vote during the hearing (no formal decision).

Looking ahead

The board will consider the proposed FY26 budget at its Aug. 28 meeting. Board members asked staff for clearer contingency language and line‑item detail about central office reductions, and community advocates said they will continue pressing elected officials and state lawmakers for increased school funding.

(Reporting based on the Aug. 19, 2025 Chicago Board of Education FY26 budget hearing.)