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Amid CPS Budget Battle, Focus Shifts to Property Taxes Earmarked to Fight Blight


With a flood of red ink threatening to consume the Chicago Public Schools, the debate over how to resolve the financial crisis threatening Chicago’s schools shifted Wednesday to a pool of funds designed to fight blight across the city.

For years, both the city and CPS have relied on unspent funds in the city’s 124 tax-increment financing districts, known as TIFs, to balance their budgets, preventing deep service cuts and tax hikes. This year is likely to be no different, although it will be several weeks before Chicago officials publicly announce how much money is at issue.

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CPS CEO Pedro Martinez said during an appearance on WTTW News’ “Chicago Tonight” he has repeatedly urged Mayor Brandon Johnson to use funds from the city’s TIF districts to make a required $175 million payment to one of its employee pension funds and pay for new contracts with the Chicago Teachers Union and the union that represents principals.

“We made a very specific request, we said we need another $462 million,” Martinez said, adding that Johnson agreed to give the district $160 million, which will both cover the $62 million cost of the recently ratified SEIU Local 73 contract and provide $97 million toward the district’s operations.

Martinez later said that the district would actually need an additional $482 million in TIF funds.

The city has already promised to use $62 million in TIF funds to cover the cost of the recently ratified SEIU Local 73 contract, and to provide $97 million toward the district’s operations, records show.

That left a $300 million gap that CPS and city officials asked state officials to fill, Martinez said. 

“We knew it was a longshot to get more funding,” Martinez said.

Johnson requested cuts to the district’s administrative operations, but then urged the district to take out a loan when those were not sufficient.

Martinez opposed borrowing more money, calling the proposal backed by the mayor “exorbitant” and fiscally irresponsible.

But Johnson told “Chicago Tonight” on Tuesday that he would not allow teachers to be laid off and cuts made to school programs.

“There’s two visions for our public schools,” Johnson said. “It’s cuts, and we’ve already seen the disaster that does. We’ve already seen that. Where parents are begging desperately for the city to believe in their children. Or we can invest in our children. And If I’m faced with a decision to cut, to take away from families in this city, versus having to keep an option on the table where we might have to borrow some money to help connect us to full transformation, I know what decision I’m going to make. I’m going to make sure we invest in children and invest in the families of this city. I’m not going to cut, and take away, layoff, fire, privatize so that other people can benefit, and the people of Chicago can lose. Not under my watch.”

Instead of borrowing or making cuts, Martinez said, the city should use TIF funds to bridge the gap.

But that would be more than double the amount of TIF funds CPS has ever received from the city, records show.

CTU leaders dismissed Martinez’s proposal out of hand calling it a “day late and a billion dollars short.” 

Before Martinez publicly called for TIF funds to be used to balance CPS’ budget, CTU leaders called for all funds now set aside in TIF districts to be returned to taxing agencies, which would allow CPS officials to balance the district’s budget.

That would likely violate state law and upend Johnson’s already approved plan to phase out the city’s decades-long reliance on TIFs and use those funds for a wide-ranging slate of projects designed to expand the supply of affordable homes and good-paying jobs.

Since their creation in the mid-1980s, TIFs have been beloved by Chicago City Council members for providing a dedicated fund for a host of programs, ranging from road improvements to school additions and expanded park facilities. Those projects are not OK’d without the approval of local alderpeople, giving them a large amount of power at City Hall.

Critics of TIFs have long believed they are inherently inequitable by generating the fewest resources in areas where the need is the greatest.

For many years, TIF districts have claimed a growing share of city property tax revenues, fueling the debate over whether the districts, which capture all growth in the property tax base in a designated area for 23 years, exacerbate growing inequality in Chicago.

In 2023, Johnson declared $433.8 million in TIF funds to be in surplus — returning $100 million to the city and sending $226 million back to CPS.

Contact Heather Cherone: @HeatherCherone | (773) 569-1863 | [email protected]


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