CPS presents FY26 budget that protects school funding; pension reimbursement tied to new state or TIF revenue

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…