CHICAGO — As Chicago Public Schools (CPS or the ‘District’) heads into a pivotal budget season under new leadership — and with a newly finalized, cost-increasing contract with the Chicago Teachers Union — the Civic Federation is releasing a series of educational reports on what's at stake for CPS in FY2026 and beyond.
The new teachers’ contract significantly increases the District’s structural deficit, and with a new Chicago Board of Education — and, as of June 18, a new District leader — responsible for developing long-term solutions, a clear understanding of the financial landscape is imperative. This series provides a grounded understanding of the District’s fiscal challenges, the limitations of available options, and the consequences of short-sighted or unsustainable decisions.
Building on the Civic Federation’s January Financial Landscape report, these new publications level-set the conversation around CPS finances, outline the viability of revenue and cost-savings options, and help inform the urgent and difficult decisions ahead.
“During a crucial moment for our city and our public schools, it is essential that lawmakers and leadership understand the full picture of CPS’ challenges and start taking the necessary steps to address them. To prevent future crises and mitigate fiscal and operational risks, the Chicago Board of Education must right-size its operations with available resources by improving efficiency, identifying sustainable revenue sources, and focusing on long-term planning that prioritizes its core mission responsibilities,” said Civic Federation President Joe Ferguson. “The new CTU contract significantly increases the District’s budget deficit, and a clear understanding of the financial landscape is imperative for the Board to develop responsible solutions.”
The first report, “Understanding the Components of CPS’ FY2026 Projected Structural Deficit,” presents a comprehensive picture of the District’s fiscal landscape alongside the impact of the new teachers’ contract and highlights the deepening structural deficit. This report outlines the largest items in that contract and their estimated costs, details the projected deficit for FY2026, and discusses the real possibility that the deficit will grow beyond current projections. It also weighs the feasibility of CPS’ options for balancing the budget and putting the District on a more sustainable fiscal path.
To provide greater historical context around the budget — and a reminder of paths taken in decades prior — the Civic Federation has also authored a factual overview of the School Finance Authority (SFA) and its potential relevance today. “A Brief History of the Chicago School Finance Authority,” examines CPS’ current financial situation, alongside the severe financial crisis of 1980 that gave rise to the SFA, and offers several routes the State could pursue if a revival of that body is on the table.
Finally, “How Chicago Public Schools’ Pensions Work: An Explainer” outlines the critical role pension funding plays in CPS' overall financial picture, including the longstanding disparities and disputes over State support for the Chicago Teachers' Pension Fund and City support for the Municipal Employee Annuity and Benefit Fund.