Budget Overview

Introduction

Chicago Public Schools’ (CPS) $9.9 billion FY2025 budget represents a key milestone in the decades-long effort to create a more equitable school District and provide a high-quality education for all of Chicago’s children. In addition to protecting investments that have propelled students to an impressive recovery from the COVID-19 pandemic, this budget takes a first-of-its-kind step toward improving educational equity across the District. By moving fully away from Student-Based Budgeting (SBB), and setting a foundational standard of positions and resources for every CPS school, the FY2025 budget is improving access to a robust, high-quality education for every CPS student, no matter the size, type, or location of their school.

To bolster CPS’ progress in student achievement and continue to advance funding equity, this budget protects school funding. In doing so, however, this budget includes challenging decisions made to reduce the District’s budget deficit and balance the FY2025 budget. The challenges the District faces in FY2025 and onward are driven by inequities and inadequacies in state funding. CPS remains the only district in the state of Illinois required to fund its own teacher pensions and remains over $1 billion underfunded based on the state’s own assessment. On top of these challenges, CPS faces shortfalls in the state’s assessment (and, subsequently, funding levels) of CPS’ special education needs, funding for pre-K classrooms, and reimbursements for transportation of special education students.

Progress in combating CPS’ financial challenges moving forward will necessitate improvements in state funding to avoid cuts that will undermine the progress of Chicago’s students. 

CPS Highlights

CPS students continue to break records and achieve amazing things. Here are the highlights of the District’s performance over the past two school years.

Class of 2023:

• A record graduation rate of 84 percent.
• More than $2 billion in college scholarship offers.
• Nearly half of all 2023 graduates earned at least one college or career credential while still in high school.

Class of 2024:

• In addition to again earning more than $2 billion in college scholarships, nearly 6,000 of our 2024 graduates earned college credit through their completion of dual credit, dual enrollment courses offered by the City Colleges of Chicago (CCC) and our other university partners.
  • More than 800 among this group earned 15 or more college credits, and 144 graduated from high school having already earned their associate degree, which is more than any other senior class in CPS history.
• More than 2,200 students graduated from International Baccalaureate (IB) programs, and the District administered nearly 50,000 Advanced Placement (AP) exams to the Class of 2024.
• More than 2,800 12th-graders earned the Illinois Seal of Biliteracy in 38 total languages. This distinction is awarded to students who demonstrate proficiency in two or more languages. This success reflects the District’s intentional investment in bilingual and dual language programming.

Middle Grades:

• A landmark study from Harvard and Stanford universities concluded that CPS is a national leader among large urban school districts when it comes to academic recovery from the COVID-19 pandemic. Students in grades 3-8:
  • Ranked #1 in recovery for reading
  • Ranked in the top third for recovery in math
  • Ranked #3 overall for academic recovery since the pandemic

Early Grades:

• Students in Grades Pre-k - 2 saw their proficiency rates in literacy quadruple over the course of last school year.

FY2025 School Funding

To build on this progress, our FY2025 budget totals $9.9 billion. The District’s operating budget, which covers day-to-day expenses on staff, contracts, and other regular costs, is $8.4 billion.

Overall, school budgets will see an additional $149 million in funding in FY2025. Most of this cost is driven by required services for special education students ($62 million), statutorily-driven funding increases to charter schools ($42 million), and increased bilingual services ($7 million).

A More Equitable, More Transparent Funding Model

In years past, the CPS budget model relied mainly on student-based budgeting (SBB), where the District would allocate a standard dollar amount for every student, and then add funding based on each school’s unique characteristics and needs. By contrast, the FY2025 budget model completes our District’s move away from SBB, prioritizing the needs of students in each school rather than the number of students in that school.

This change represents a significant improvement over the District’s previous budget model, especially for communities that have historically been furthest from opportunity. Through this new model, CPS can ensure that those Chicago neighborhoods that are most impacted by inequity have strong, vibrant and healthy school communities.

Setting a New Standard for All Schools

The FY2025 budget sets a new, first-of-its-kind standard for what every CPS school deserves in terms of number of educators and support staff. No matter their type, location, or size, this year’s school budgets allocate funding for every school to have the following:

• a principal
• an assistant principal
• a school clerk
• at least one counselor, with additional counselors for large and high-needs schools
• a foundation of core teachers and holistic teachers to support smaller class sizes and deliver rich, engaging programming.

Under this new budget model, every CPS elementary school will have at least three holistic teachers - one for the arts, one for Physical Education, and one that principals can use for a position of their choice, be it a world language teacher, a STEM specialist, a librarian, or another type of educator to meet their school’s unique needs. This is a landmark change from prior years, where some CPS schools lacked the resources to hire teachers for these holistic subject areas.

By allocating a baseline of resources to every school, the FY2025 budget establishes a new standard across the board, ensuring that all schools can offer rich programming and a high-quality education. This shift will bolster our smaller and under-enrolled schools, making them a more attractive option for families — especially in those communities that have suffered from historical disinvestment and depopulation.

Funding Based on Student Need

CPS uses a formula called the Opportunity Index to determine the level of need within a school community. This resource considers 12 community, demographic, and historical factors to analyze differences in access to opportunity.

In prior years, CPS used the Opportunity Index to allocate additional counselors and instructional coaches to high-need schools. This year, CPS is expanding our use of this tool, leveraging the data to allocate even more resources according to student need. These include:

• Additional teacher positions
• Tutors
• Social and emotional supports
• Restorative justice coordinators, and
• Discretionary funds

Maintaining Autonomy for School Leaders

The FY2025 budget continues the District’s practice of including flexible discretionary funds for principals to use on local school-level priorities. No one knows our students better than our school leaders, so it was important to CPS that they maintain the flexibility to invest in the positions, programs, and resources that will most benefit their specific population of students. These discretionary funds increase based on each school’s Opportunity Index score — giving principals in high needs schools even greater autonomy.

Prioritizing Investments that Drive Student Growth

The FY2025 budget doubles down on investments that are driving student growth, including learning acceleration, extended learning time, and social and behavioral supports.

Learning Acceleration

• High-quality, culturally responsive curriculum
• More professional development offerings for teachers and staff
• Intervention teachers to provide targeted supports for students who are struggling
• High-dosage tutoring in reading and math through CPS’ landmark Tutor Corps program
  

Extended Learning Time

• Expanded Out-of-School-Time and summer programs
• Flexible funding for schools to design local programs tailored to student needs

Emotional and Behavioral Support

• Additional counselors targeted to schools with the greatest needs
• Social-Emotional Learning (SEL) resources and services
• Access to community mental health providers and partnerships at the school level
  

Increasing Support for Priority Populations

The FY2025 budgets for CPS central office departments mirror the priorities of our school-based funding, which are to provide stability to our school communities and continue investing in the programs and resources that support our students’ academic, social, and emotional growth. Specific areas we are focused on improving include:

• Increasing staffing to support priority student groups, including special education students, English Learners, Students in Temporary Living Situations (STLS) and students who are chronically absent or truant.
• Supporting our talent pipelines to ensure greater diversity and fulfill staffing needs in all schools, especially schools that are harder to staff or are experiencing staffing shortages.
• Building out our mental health support system to connect students with resources.
• Bolstering SEL resources for students and staff through curriculum, professional development, targeted interventions, and partnerships.
• Continued funding to provide students with exposure to various career pathways through enhanced Career and Technical Education programming and employment/apprenticeship opportunities, including in the growing field of green jobs.
• Continued funding to support students with college readiness through dual credit, dual enrollment, and other early college programs, including our Roadmap with the City Colleges of Chicago (CCC).

Investing in Safe and Supportive Learning Environments

The safety of all CPS students and their communities remains a top priority, which is why our District will continue funding the programs and resources that protect our students' physical safety while also addressing their mental health and emotional well-being. These include:

• $10 million for the Comprehensive Whole School Safety Plan: Introduced early in the 2022–23 school year, this plan outlines continued investments in proactive safety resources like school safety equipment, as well as efforts to build out our mental health support system and expand SEL resources for students and staff through curriculum, professional development, targeted interventions, and partnerships.
• $5 million for Choose to Change: An evidence-based mentoring program designed to keep young people who are heavily impacted by violence and trauma on track to graduate from high school and out of the criminal justice system.
• $8 million for Back to Our Future: A high-touch intervention model designed to support youth who have been disconnected from school for at least 12–18 months, providing them with behavioral health services, mentoring and employment opportunities, and other wrap-around supports designed to help them safely reconnect with their school communities.
• $15 million for Safe Passage: Our program where committed adults from community-based organizations help keep students safe on their way to and from school and during summer programs and activities.

Supporting our District’s Long-Term Fiscal Health

CPS has been allocated more than $2.8 billion in reimbursable federal pandemic relief funds through the Elementary and Secondary School Emergency Relief Fund (ESSER). As of June 2024, we project to have spent 92 percent ($2.6 billion) of these funds to support our students and families, with $233 million to be allocated as part of the FY2025 budget, as detailed below.

The decision to invest ESSER funds over several years has been both intentional and strategic. As the ongoing effects of COVID-19 continue to shift, so have the types of support our students need to recover and thrive. The responsible course has been to maintain the funding flexibility necessary to adjust to their changing needs.

The below table gives a complete picture of how we have and will continue to allocate ESSER funds for the benefit of our students and schools:

Our District’s long-term financial stability is made more complicated by continued inadequate and inequitable funding by the State of Illinois. CPS has made important strategic funding shifts over the last several years and has benefited from federal COVID-19 relief money. However, FY2025 will be the last year CPS has access to these funds, and our District still does not have the appropriate level of funding from the state to meet our students’ needs.

Despite recent improvements, under the state’s own evidence-based funding (EBF) model, CPS is still funded at only 81 percent of what the formula says the District needs to be “adequately” funded. If the state’s EBF formula were fully funded, an additional $1.1 billion would be available to support schools, providing resources for staff and programs.

Furthermore, CPS is the only district in the state that is required to fund its own teacher pensions. The state covers teacher pension costs for every other District in the state, while providing only 35 percent of CPS’ total cost. The remaining 65 percent ($661 million) is covered by Chicago taxpayers, a burden no other district in Illinois incurs.

Finally, unlike every other district in the state, CPS has limited access to alternative revenue sources to fund capital projects. Because of this, CPS must use over $503 million of EBF and other unrestricted funds to make debt service payments on maintenance and building school infrastructure. These dollars would be otherwise eligible for everyday classroom expenses.

To mitigate these funding inequities, CPS has taken a strategic approach to using ESSER funds, outlined above, that has allowed the District to address pressing needs, support instructional priorities, and maintain fiscal stability. CPS, alongside community stakeholders, is currently advocating for additional funding to ensure the state fulfills its commitment so that our families and District can thrive.

Balancing the FY2025 Budget

Due to the pending expiration of federal relief funding, CPS faced an initial projected budget deficit of $391 million for FY2025. Additional cost pressures in healthcare and required special education resources added $114 million to the deficit that CPS has worked to close.

To balance the FY2025 budget and protect funding in school budgets, CPS conducted a rigorous review of opportunities to find efficiencies, maximize grant funding, and reduce spending across central office and citywide departments. Through this process, the district identified $505 million in deficit reduction strategies to balance the FY2025 budget.

The largest strategy in the District’s budget deficit reduction is the $197 million of reductions and efficiencies found in central and citywide departmental budgets. The table below includes detail on the strategies comprising this total.

In addition to these actions taken to balance the FY2025 budget, the District ratified a collective bargaining agreement with Service Employees International Union (SEIU) Local 73 in May, which added $62 million of cost to the FY2025 budget. This is being covered through additional TIF surplus funding CPS is projected to receive in FY2025.

Negotiations around new collective bargaining agreements are currently in progress with the Chicago Teachers Union (CTU) and the Chicago Principals & Administrators Association (CPAA). CPS expects to amend the FY2025 budget to reflect any additional costs once these agreements have been finalized.

Five Year Budget Forecast

Though CPS has taken significant steps to identify budget balancing strategies for FY2025, the District still faces significant budget challenges in future years, as outlined in the five-year budget forecast table below.

Reflected in this table are projected revenues and confirmed expense obligations, but the totals do not account for the potential impact of new collective bargaining agreements with the Chicago Teachers Union (CTU) and the Chicago Principals and Administrators Association (CPAA).

Prior to any new costs in these CBAs, the District faces future budget deficits upwards of a half-billion dollars.

Community Engagement Around Budget Priorities

The FY2025 budget is reflective of input from families, educators, principals, network chiefs, Local School Councils (LSCs), the Principal Advisory Council, and other District partners. Changes to school budgets, specifically, are a result of recent years of community engagement and stakeholder feedback. This variety of feedback and perspectives has allowed us to shape a budget that will better support each school’s unique needs while remaining aligned to our District-wide priorities. We look forward to receiving additional feedback from our stakeholders at upcoming budget hearings, the details of which can be found at cps.edu/budget.

CPS’ Operating Budget by Spending Unit

CPS’ total operating budget includes $8.43 billion in funding, with 95 percent of these funds directly supporting schools. Funding allocated directly to District, charter, and contract school budgets makes up 59 percent of the operating budget. Citywide funding allocations to provide centrally managed support directly to schools, such as custodians, nurses, social workers, security, and other functions, makes up 36 percent. Citywide allocations include funds transferred to schools after the start of the year to account for fall enrollment funding adjustments, grant awards, and other factors. The remaining 5 percent of the CPS operating budget covers central office and network costs providing essential services in support of schools and the district.

CPS’ Operating Budget by Expense Category

The following table breaks out the District’s same $8.43 billion operating budget by expense category, to provide an overview of what types of spending CPS has planned in its FY2025 budget.

Salaries and Benefits: 69 percent of the FY2025 operating budget funds employee salaries and benefits. The FY2025 budget for salaries reflects an increase of $102 million over the FY2024 budget. This is driven by investments in school-based instructional and support staff, along with the cost of contractual increases for union employees. FY2025 benefit costs include an increase of $102 million over FY2024 budget, mostly attributed to increased costs of medical coverage and associated claims.

Contracts: This category includes tuition for charter schools and private therapeutic schools and payments for clinicians that are not CPS staff. This category also includes early childhood education programs provided by community partners and programs such as Safe Passage, City Year, After School Matters, and Safe Haven. In addition, this category includes transportation, repair contracts, legal services, waste removal, custodial services, engineering, and other services. FY2025 contractual costs will increase by a projected $36 million over FY2024 mostly driven by tuition for charter schools and private therapeutic schools. Significant savings in this category were accounted for by reducing the contractual costs for engineering and custodial services.

Commodities: Commodities include spending on items such as food and utilities (which make up the largest share), instructional supplies such as textbooks and software, and other supplies such as postage and paper. The FY2025 budget for commodities is $14 million less than FY2024 budget. While the district’s utility costs have increased, this has been significantly offset by reductions to the district’s supplies-based budget for facility repairs.

Equipment: Equipment pays for the cost of furniture, computers, and similar other non-consumable items. The FY2025 budget includes an increase of $3 million driven by the district’s continued investment in security equipment for schools. Savings in this category have been accounted for by completing the installation of hygiene products in all bathrooms and installing lunchroom equipment as part of FY2024’s investments.

Contingencies: This account type includes three categories of spending. The first category represents funding that has been budgeted but not yet allocated to specific accounts or units where it will eventually be spent. Under the current system for school funding, schools are not required to allocate all of their funds, but can hold some in contingency while they determine how they want to spend it. Similarly, the District holds grant funds in contingency, particularly if the grant is not yet confirmed. The FY2025 contingency budget reflects a reduction of $285 million, driven primarily by the expiry of pandemic-related grant funding from federal and state sources.

CPS’ Operating Revenues

Local Revenues

CPS is projected to receive $3,924 million in property tax revenues in FY2025, which remains the District’s largest single revenue source. A portion of the District’s property tax revenues are restricted for specific uses. Within the operating budget, CPS projects to receive $559 million from the dedicated Chicago Teacher Pension Fund (CTPF) levy, which assists CPS in paying its annual pension obligation. (For more information on the pension levy calculation, please review the Pensions chapter).

Personal Property Replacement Taxes (PPRT) are collected by the State of Illinois and distributed to local governments state-wide. While the tax rates behind the collections are constant, the amount of funding CPS receives from this revenue can vary significantly from year to year. This is because PPRT is a tax that businesses and partnerships, trusts, and S corporations pay on their net Illinois income, along with a tax that public utilities pay on invested income. As corporate and investment income fluctuates, so does the amount received by local government agencies, including CPS. Due to economic factors and the impact of pass-through entity tax legislation, PA 102-0658, PPRT underperformed FY2024 expectations with an end-of-year total of $343 million in CPS revenue, approximately $196 million less than the FY2024 budgeted total of $539 million. CPS projects to collect $335 million in PPRT revenue in FY2025.

State law requires that surplus TIF district property tax revenue is proportionally distributed to the taxing bodies within the TIF districts. CPS has budgeted $159 million in TIF surplus funding in FY2025. CPS’ share of TIF surplus funding will be finalized once the City of Chicago passes its budget in the fall.

All other local revenue includes a variety of other revenue sources, including school-generated revenue, payments from charter schools, and revenue generated through intergovernmental agreements (IGAs), including $142 million from an annual City property tax levy that funds the debt service on CPS issued bonds through the District’s School Building and Improvement IGA.

State Revenues

In FY2025, CPS’ state revenue budget is $2,094 million, which comprises 25 percent of CPS’ operating budget. As discussed above, the state provides funding to CPS through EBF, support for pension normal cost, and several other appropriations that come in the form of reimbursable or block grants.

EBF is the largest portion of funding that CPS receives from the State of Illinois. In FY2025, EBF represents 60.0 percent of the $2,094 million of CPS’ state operating revenues.

FY2025 is the eighth consecutive year that CPS has benefited from the State of Illinois making payments to the Chicago Teacher Pension Fund (CTPF). While the state contributions help to offset the impact that CTPF has on CPS’ financial health, Chicago remains the only district in Illinois that is required to pay contributions to its teacher pension fund. In FY2025, the state contribution to CTPF is $353.9 million, an increase of $31 million from the prior year’s contribution of $322.7 million, but only 35 percent of the District’s total teacher pension cost.

In addition to EBF and teacher pension contributions, CPS is projected to receive $484 million in revenue from other state-appropriated funds and categorical grants. The majority of this funding is from the Early Childhood Block Grant, which increased from $249 million in FY2024 to an estimated $284 million in FY2025. CPS also expects to receive $12 million for teacher pipeline efforts as part of a new appropriation in the state's recently passed budget.

Federal Revenues

Most federal grants require the Chicago Board of Education to provide supplemental educational services for children from low-income households, children from non-English speaking families, and for neglected and delinquent children from preschool through twelfth grade. These grants are dedicated to specific purposes and cannot supplant local programs. Medicaid reimbursement and Impact Aid are the only federal funding that is without any restriction.

For additional information on the FY2025 Revenues, please review the Revenue chapter of the budget book.

CPS Personnel Budget

The FY2025 budget includes 45,965 full-time equivalents (FTEs), an increase of 805 FTEs from the FY2024 budget. 96 percent of all positions in the FY2025 budget provide direct support to schools.

Investments in Staff to Support Schools

The largest and most important investment that our District makes is in our people — the dedicated school leaders, teachers, and staff who inspire, guide, and support our students every day. The District has budgeted for a total of 45,965 full-time employees (FTE), an increase of 805 FTE from FY2024 with allocations that include an additional:

• 513 teachers, driven by the district’s need based school funding model, growth in special education teachers, and bilingual teachers;
• 337 school support staff primarily driven by additional paraprofessionals, restorative justice coordinators, and other school-based personnel.
• A net decrease of 45 positions across all other categories.

FY2025 Capital Budget Overview

The FY2025 budget for Chicago Public Schools (CPS) includes a capital budget totaling $611.1 million of investments that will focus on priority facilities needs at neighborhood schools, mechanical systems that control the indoor environment and air quality of our schools, building envelope improvements for roofing systems, ADA accessibility, restroom modernizations, student recreation and athletic improvements, site improvements, and continued expansion of technology upgrades and other academic priorities. The budget also includes investments for enhancements to Career and Technical Education (CTE) and science, technology, engineering, arts, and mathematics (STEAM) programming. To support schools throughout the city, the FY2025 capital plan provides funding in five main areas: critical facility needs, interior improvements, programmatic investments, site improvements, and IT and security upgrades.

CPS is committed to promoting equitable access to high-quality school environments, and equity served as the foundation for the FY2025 capital plan. The District's Equity Office played an important role in developing the FY2025 capital proposal by helping to ensure that resources are distributed fairly and equitably across CPS schools so that all students can share in the District's record-setting progress. In addition, the FY2025 capital budget planning process included several enhancements, most notably around transparency and community outreach.

The release of the Educational Facilities Master Plan (EFMP) and 16 community roundtable sessions gathered valuable input. The EFMP acts as a guiding compass, informing investment decisions and school actions to align physical infrastructure with educational goals and community needs. Community feedback requested more transparency in the prioritization process for Capital projects. In April, Chicago Public Schools (CPS) held five virtual meetings to involve communities in discussing capital priorities for the FY25 Capital Plan.

The CPS facility portfolio includes 522 campuses and 803 buildings. Our average facility age is over 84 years old, and the total CPS immediate critical facility need is over $3 billion. Since FY2016, CPS has invested over $3 billion into capital improvements across the District. These projects include major renovations to ensure our schools stay warm and dry, facility construction to relieve overcrowding, security cameras to provide a safer environment for our children, and renovations to aid programmatic enhancements, among others. Additionally, CPS is continuing to invest in ADA upgrades to ensure all CPS campuses are more accessible.

The FY2025 capital budget is primarily funded by future issuance of general obligation bonds, which are principally repaid by Evidence-Based Funding (EBF). (For more information, please see the Debt Management chapter of the budget book.) A portion of the FY2025 budget is also funded by Tax Increment Financing (TIF) funds, state funding, and other outside resources as they become identified.

CPS’ capital plan aligns with the priorities outlined in the Educational Facilities Master Plan. Future projects will be determined by equity, assessed need, educational priorities, and available funding with the goal of maximizing the number of students impacted by the capital investments.

For additional information on the FY2025 Capital budget, please review the Capital chapter of the budget book.

FY2025 Debt Budget Overview

The Chicago Board of Education (Board) is authorized by state law to issue notes and bonds, enter into lease agreements for capital improvement projects, and assist in the management of cash flow and liquidity. As of June 1, 2024, the Board has approximately $9.3 billion of outstanding long-term debt and no outstanding short-term debt. FY2025 includes appropriations of $817 million for long-term debt service payments. Approximately $9.0 million of appropriations for interest on short-term debt is included in the operating budget.

CPS’ Capital Improvement Program, described in the Capital chapter, funds long-term investments that provide our students with a world-class education in high-quality learning environments. CPS relies on the issuance of bonds to fund the investments laid out in the program, which include roofs, envelopes, and windows; state-of-the-art high school science labs; high-speed internet and digital devices; playgrounds and athletic fields; and the expansion of full-day pre-k and other high-quality programs. Bonds are debt instruments that are similar to a loan, requiring annual principal and interest payments. Typically, CPS issues long-term fixed-rate bonds, which pay a set interest rate according to a schedule established at the time of debt issuance. As of June 1, 2024, all CPS outstanding long-term debt is fixed rate.

For additional information on the FY2025 Debt budget, please review the Debt Management chapter of the budget book.