CONTACT: [email protected]
Analysis finds CPS debt decisions driven by longstanding structural fiscal pressures and recurring budget deficits, contributing to limited future flexibility
CHICAGO — The Civic Federation has released a new report, Understanding Municipal Debt: A Case Study of the Chicago Public Schools, examining how municipal debt works, CPS’ current debt burden and repayment structure, and the District’s recent debt issuances and refinancing decisions.
The analysis finds that years of recurring structural deficits, aging infrastructure needs, and ongoing fiscal pressures have contributed to a heavily backloaded debt portfolio that will continue to constrain the District’s finances in future years. While recent CPS refinancing decisions generated meaningful savings in the current fiscal year and avoided the most harmful debt practices, the District’s overall debt structure remains shaped by immediate budget pressures rather than long-term fiscal sustainability.
“CPS’s debt strategy reflects years of fiscal crisis and limited fiscal flexibility,” said Joe Ferguson, President of the Civic Federation. “Faced with persistent deficits and few good options, the District has often had to prioritize immediate budget stability over longer-term debt restructuring. Recent refinancing decisions generated meaningful savings and avoided harmful practices, but they did little to improve CPS’s long-term financial stability. The consequences of short-term decision-making will come due, and CPS is rapidly running out of options to address it.”
CPS currently carries approximately $9.3 billion in outstanding debt and is projected to spend more than $629 million on debt service in FY2026. Compared to peer school districts, CPS has one of the highest debt burdens in the country — more than three times the average among major school districts analyzed in the report. The report also highlights that CPS’ debt repayment schedule is heavily backloaded, and the District will pay off only 44% of its current debt obligations within ten years, compared to an average of 57% among peer districts.
Key Findings
- CPS carries one of the highest debt burdens among major U.S. school districts, with debt per capita far above peer averages.
- The District’s debt structure is heavily backloaded, pushing repayment obligations further into future years.
- Recent refinancing decisions this year generated savings for the District and avoided extending debt repayment schedules further into the future, but most of those savings were concentrated in FY2026 to help close an immediate budget gap rather than spread over the life of the debt.
- CPS’ below-investment-grade credit rating continues to increase borrowing costs, costing the District hundreds of millions of dollars over time compared to higher-rated issuers.
The report notes that CPS’ debt challenges are closely tied to recurring budget deficits, aging school facilities, rising operating costs, and the expiration of federal pandemic relief funding. While acknowledging that recent refinancing decisions likely represented the District’s best available short-term option given significant fiscal and political constraints, the Civic Federation warns that those opportunities are becoming increasingly limited.
“There are no easy debt solutions left for CPS,” Ferguson added. “The District cannot continue relying on one-time refinancing savings or other short-term measures to balance recurring structural deficits. The challenge now is not simply managing debt differently, but addressing the underlying structural imbalance between recurring revenues and expenditures. Long-term fiscal stability will require sustainable budgeting and structural solutions that reduce the need for crisis-driven decision-making.”
Read the Full Report
Understanding Municipal Debt: A Case Study of the Chicago Public Schools