Delayed property tax bills cost Chicago Public Schools $34 million

Chicago Public Schools borrowed over $1.8 billion amid a delay in last year’s Cook County bills, adding interest costs and exposing the fragility of the district’s finances.

Late property tax bills last year cost Chicago Public Schools over $34 million in borrowing expenses this fiscal year, the natural consequence of operating with too little cushion after years of financial mismanagement.

The significant delay in Cook County bills hampered cash flows for governmental units such as CPS. The district had to borrow money in the form of tax anticipation notes (TANs).

CPS took out $1.6 billion in those short-term loans for fiscal 2026 operating costs such as payroll and basic expenses, plus a $246 million loan to support the Chicago Teachers’ Pension Fund. That borrowing is expected to cost $34 million in interest, according to a March report to the Chicago Board of Education.

Property tax revenue is the district’s largest funding source, accounting for $4.2 billion, or nearly half, of its $8.7 billion operating budget for fiscal 2026. Thie recent tax delay exposed how fragile CPS finances have become. A district with adequate reserves should be able to weather temporary revenue timing problems, but CPS could not.

The short-term borrowing is just the latest instance of a recurring problem. As of June 30, 2025, the Chicago Board of Education owed $9.1 billion in long-term debt and $450 million in outstanding short-term debt. The board has issued TANs regularly since first authorized to do so in 2015.

The 2026 budget included $1 billion for long-term debt service and $23 million in interest for previous property tax delays. Because of the tax bill delay, the district added $11 million more in short-term debt service than anticipated.

The additional debt taken on during the property tax delay will cost taxpayers nearly as much in interest as the amount borrowed. CPS’ schedule of general-obligation debt service shows $7.03 billion in principal and $5.49 billion in interest, for a total of $12.53 billion to be paid through 2049.

The district’s capital improvement tax bonds add another $1.4 billion in principal and $1.33 billion in interest, bringing scheduled long-term debt service to more than $15.25 billion before counting future borrowing or short-term TAN costs.

In its fiscal 2026 budget, the board said further borrowing could “send the District into a downward spiral of credit downgrades, higher interest rates, steeper cuts to staff, programs, and services, and a growing debt burden could eventually exceed the District’s annual budget.” That very thing happened just 10 years ago, when the district suffered 34 credit downgrades from fiscal 2016 to fiscal 2018, falling from AA to junk. State and federal pandemic relief funds helped CPS receive 14 credit upgrades since 2019, but the district still hasn’t fully recovered.

Despite acknowledging its risky financial situation, CPS spending continues to grow. Last year the Board of Education approved a four-year Chicago Teachers Union contract estimated to cost $1.5 billion. The deal includes 4% to 5% annual cost-of-living raises and lower class-size limits, adding costs while CPS struggles to cover existing obligations.

CPS also has increased staffing despite declining enrollment. From 2019 to 2024, the number of students fell by over 38,000, but the district added almost 8,000 teachers and support staff in that period.

That’s the wrong direction for a district already borrowing to make payroll. As of April 2026, CPS is projected to end the 2025-2026 school year with a $45 million deficit and facing a deficit of over $732 million for the 2026-2027 school year.

Cook County bears the blame for the delayed tax bills, but CPS continues to perpetuate structural problems that make those delays so damaging: more borrowing, more taxes and more staffing instead of aligning expenses with enrollment, rebuilding reserves and paying down debt.

The result is predictable: When revenue is late, CPS turns to lenders. Taxpayers cover the interest.