What to watch: Chicago Public Schools to vote on 2026 budget, fill $734M hole
Chicago Public Schools holds same junk‑grade credit rating as Colombia and Vietnam

CHICAGO (Aug. 26, 2025) – On Thursday, the Chicago Public Schools Board of Education will vote on its 2025-26 budget, including plans to close a $734 million deficit this year.

With $9.1 billion in long-term debt, a junk-rated credit profile and billions in future interest payments, budget decisions will have far-reaching consequences for taxpayers, teachers and students. The district’s credit rating with the Big Three agencies is the same as countries including Colombia, Vietnam and Morocco – and lower than Hungary or Serbia – according to an analysis by the Illinois Policy Institute.

Experts from the Illinois Policy Institute are available to comment on the budget vote, its implications for students and taxpayers, and the broader fiscal outlook for the district.

What to know about the CPS budget: 

• New Chicago Teachers Union contract: The recently approved CTU contract will cost the district an extra $1.5 billion during the next four years, with teacher pay expected to grow at least $1.1 billion. The proposed budget includes $165 million in savings from laying off some central office staff, janitors, lunchroom workers and crossing guards.
• Property taxes: CPS receives $4 billion in property taxes and is the largest line item on Chicagoans’ property tax bills.
• Empty schools: Data shows 58% of schools – or 275 school buildings – are underutilized. The 10 least-utilized schools were at just 12% capacity on average.
• Heavy long-term debt: The district will spend $15.257 billion on long-term debt by 2049 when future interest payments are included. It also must eventually cover $13.9 billion in unfunded pension liabilities it owes its teachers.
• Refinancing and new borrowing: CPS plans to refinance $1.8 billion in existing debt and issue $600 million in new capital debt in 2026. The district also expects to dip into its debt service stabilization fund for $65 million.

“It’s time for CPS leaders to get serious and innovative when it comes to stabilizing finances. We should be protecting families from mounting debt, not utilizing budgetary gimmicks such as one-time funding sources, ‘accelerating’ savings from future years or refusing to make pension payments,” said Bryce Hill, director of fiscal and economic analysis at the Illinois Policy Institute.

To read more about CPS’ budget, visit illin.is/cpsvote.

For interviews or interviews, contact media@illinoispolicy.org or (312) 607-4977.