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Chicago school leaders warn of $700M‑plus shortfall as board readies levy and TANS authorization
Summary
CPS officials told the Board that the FY27 operating budget faces a shortfall exceeding $700 million, outlined a proposed tax levy and requested authorization for tax‑anticipation notes while urging urgent revenue and cost decisions amid Cook County tax delays.
Chicago — Chicago Public Schools’ acting chief financial officer told the Board’s agenda review committee on July 8 that the district faces a structural fiscal gap for fiscal 2027 and is moving quickly to assemble a budget, seek additional revenues and preserve liquidity.
Wally Stock, acting chief financial officer and district treasurer, said the district estimates an operating budget near $8.5 billion, roughly $900 million in debt service and a capital program of about $600 million. Stock said the district is working to close “a deficit in excess of $700,000,000” as it prepares to release the full budget book on July 15 and hold public hearings later in the month.
The board was asked to consider a proposed property tax levy request of $4,289,000,000 and to authorize tax‑anticipation warrants and notes (TANS) with a maximum principal authorization up to $1,650,000,000 to protect cash flow while Cook County continues to delay property tax distributions. “We need a small window of time to put the program together,” Stock said, describing negotiations with banks and the legal work required to line up borrowing.
Stock described the immediate operational risk from Cook County’s delayed tax payments and cited recent additional borrowing costs tied to delayed receipts. He estimated additional borrowing costs of roughly $10 million associated with current spring delays and said aggregate additional borrowing costs since 2020 related to tax delays are “on the order of $82–$83 million.”
Board members pressed for details. Member Lopez asked for an updated timetable and urged that community members be given sufficient time to review the budget documents; Member Brown and others sought detailed counts of position changes, including assistant principals and other school staffing impacts.
“You have to balance this through a fiscal lens,” President Sean B. Hardin said, asking district leaders to provide clearer, school‑level impacts as soon as possible. Stock said the district has worked since January to identify reductions and revenue strategies, including department budget resets, tightening discretionary allocations and pursuing additional grant funding.
Superintendent Dr. Macklin King said the district has added grant‑writing capacity and will continue to pursue multiple revenue avenues, while also urging the board to pursue city and state partners for supplemental funds. “We have to be candid about the urgency,” King said, noting that delayed county collections and structural constraints on state and federal revenues make the months ahead consequential for classroom operations.
Stock said the board must approve the levy and budget authorizations in the coming weeks to maintain operations beyond August; the budget must be adopted legally by the end of August. He also said the district plans multiple public hearings (targeted during the week of July 20) and will circulate the full FY27 budget documents before the July 30 full board meeting.
Next steps: the district plans to publish the budget book July 15, complete public hearings in late July and bring final budget and levy approvals to the full board by the statutory deadline. The administration said it will provide additional school‑by‑school impact details and follow up on requested counts of position changes and projected savings.
