Chicago Public Schools officials aim to pass budget early amid $700 million deficit

CHICAGO - Amid a projected deficit of over $700 million, Chicago Public Schools officials said they aim to have the district's budget for the upcoming school year approved by the end of July, a month earlier than last year, in part to secure short-term borrowing to help cover operational costs.

A budget proposal is set to be published online for public consideration by July 15 and voted on by the Chicago Board of Education at its July 30 meeting, district officials said in a presentation Thursday.

Under state law, the board must approve a budget by Aug. 29. A prolonged debate last summer resulted in the budget being passed on Aug. 28, just a day before the deadline.

The district must pass its budget in July rather than August to secure approval for a short-term loan needed to cover costs like payroll, Chief Financial Officer Wally Stock told board members during Thursday's meeting. Without an approved budget, Stock said, "we won't get the loan."

The district's cash on hand naturally ebbs and flows depending on when revenue arrives, but repeated Cook County property tax delays last year have deepened the problem. The county said earlier this month that bills will be at least two months late again. Property taxes make up the bulk of the district's revenue.

The budget timing is especially critical, Stock said, because the district is expected to hit the current fiscal year's borrowing limit of $1.25 billion in August. Approving a new round of short-term borrowing in July will allow CPS to meet its financial obligations as it waits for tax revenue to arrive.

The district relies on approximately $1.2 billion in short-term debt to make payroll, pay vendors and cover other costs.

The update comes as the district continues to battle fiscal challenges years in the making, including what it describes as "long-standing resource constraints" that limit funding available to meet student and school needs and billions of dollars in long-term debt.

District officials also pointed to multiple factors placing additional pressure on its finances, including that CPS is funded at 73% of what the state considers adequate. The higher costs include facility maintenance, labor contracts, employee pensions and paying off existing debt.

Costs associated with special education and the "highest-need student populations" are also rising without additional funding to offset the rise, acting CPS Chief Budget Officer Emilia Zoko said at the meeting.

"It's not our students," she said, referring to rising special needs costs.

The expiration of federal pandemic aid amid threats to federal funding streams also places pressure on the district's finances, Zoko said.

"These are not trends or challenges that are unique to CPS post-COVID," Zoko said. "The pressures that are impacting districts nationwide, including increasing costs, declining enrollment, stagnant revenue, are really put into plain view."

Last year, the district passed its $10.25 billion budget amid a $734 million deficit in part by cutting CPS central office positions and using a surplus of funds from special taxing districts' projects.

The district has already taken steps this year to try and lessen the deficit, including cutting its teaching staff and some assistant principals. CPS also shifted its staff allocation formula for the upcoming school year to address declining enrollment, a change that will not change class sizes but be "more reflective of the needs of the students in the building," the district said in a May community update.

On top of that, the district has reduced its non-school-based expenses significantly since fiscal year 2025, Zoko said. Last year saw $272 million in savings through reductions. This year, the amount is expected to be at least $105 million, she said.

"This dip reflects the fact that it's getting harder and harder to make reductions that … don't impact our core administrative abilities to run an organization of our size or … impact direct student programming and student supports," Zoko said.

Other money-saving measures are on the horizon as well. District budget officials said they are working to identify budget reductions, revenue strategies, and other cost-saving measures to bridge the gap.

Multiple board members raised concerns about the budget timeline and the district's debt, which totals over $9 billion. The debt situation, "is what it is, " Stock said, "sort of like a mortgage."

"This property tax is out of our control, and we want to make sure that we stay ahead of this, and that we get the budget put together and put to rest in a reasonable amount of time so that we can continue to do the good things that we do for the city of Chicago," Stock said.

Parents, students, labor union representatives and school community members also raised concerns at the meeting on Wednesday about the impact of budget cuts they're already seeing ahead of the start of the academic year, including the potential loss of well-regarded teachers and programs, as well as shifts in student-to-teacher ratios.

Ryan Kelly, a CPS parent, educator and local school council member at Chicago Academy High School, told the board during public comment that the school is facing a potential loss of six positions.

"The issues we will face will only be fixed through fully funding our schools," Kelly said. "We call on your leadership as a body and as individuals to fight for the schools your students deserve."

This year's budget focus is "student-centered" and prioritizes the "things that our students need to thrive, especially their instructional time," CPS Superintendent and CEO Macquline King said at the meeting. "Let me be clear with our parents and guardians: We will not limit instructional time for students next year based on this budget."

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This story was originally published June 25, 2026 at 9:17 PM.