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Civic Federation Has Significant Concerns About Chicago Public Schools' Long-Term Financial Challenges

Posted on June 27, 2023

The Federation urges the District to develop a long-term financial plan as costs continue to rise and a financial cliff looms.


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CHICAGO – In an analysis released today, the Civic Federation expressed significant concerns about the long-term viability of Chicago Public Schools’ finances. While the District’s $9.8 billion FY2024 budget is stable due to both federal COVID-19 relief funding and local tax revenue, it nevertheless faces a financial cliff of $628 million beginning in FY2026 once its federal relief funding runs out. Further complicating matters, the timing of the massive revenue shortfall coincides with the arrival of the District’s new partially elected school board, set to take office beginning in 2025. The Civic Federation’s full budget analysis, including findings, concerns and recommendations, is available at

The Civic Federation notes some positive aspects of CPS’ financial standing, including a recent S&P credit rating upgrade, increases in State funding to CPS, the District’s growing general operating reserves and a property tax levy that is dedicated to funding pensions. However, Chicago Public Schools is only funded at 75% of its actual need based on the State’s evidence-based funding formula. Meanwhile, the District faces several additional financial challenges including declining enrollment, teachers’ pensions that remain underfunded, ongoing reliance on short-term borrowing and imbalances in the District’s capital footprint.

While the Civic Federation recognizes the need for additional revenue sources, we are concerned that for the second year in a row Chicago Public Schools is raising its property tax levy by 5%, the maximum allowed under law. Such large increases on an annual basis are not sustainable for taxpayers. With no long-term financial plan in place at CPS, the Civic Federation has substantial reservations about the District’s preparedness to cover ongoing rising costs, and warns of potential risks including additional taxpayer strain or the undoing of financial progress the District has made in recent years.

“Now is the time for Chicago Public Schools to make a long-term fiscal plan, and it begins with effective collaboration with both Chicago’s new Mayoral administration and the State of Illinois,” said Sarah Wetmore, acting president of the Civic Federation. “Beyond sorting out remaining financial entanglements between CPS and the City of Chicago, the District must work to establish financial stability by improving efficiency wherever possible and by making efforts to cut costs, in addition to any requests that are made to the State for greater support.”

The Civic Federation recognizes that CPS and many other school districts across the State of Illinois cannot sustainably solve the impending financial cliff on their own. Therefore, the Civic Federation calls on the State to work with schools to develop comprehensive plans to support Illinois school districts in the coming years.

“The Civic Federation encourages Chicago Public Schools to partner with other school districts to advocate together to make the case for additional State support,” Wetmore said. “Given the competing needs among many government agencies that are facing a fiscal cliff, school districts will see better results by joining forces in both vocalizing their needs to the State and in the development of a comprehensive statewide funding solution.”

Click here to visit the report landing page.