The Chicago Board of Education approved Chicago Public Schools’ 2025-26 budget without taking out a $200 million high-interest loan, despite Mayor Brandon Johnson’s push to include borrowing as an option to close the district’s massive funding gap.
The 12-7 vote, with one abstention, followed months of financial warnings from top CPS officials and marked a notable shift in internal board dynamics. The decision came just days after Johnson appointed Ángel Vélez to the hybrid, partly elected, partly appointed board, hypothetically securing the simple majority needed to pass a budget with borrowing.
When district leadership presented a $10.25 billion budget to the board earlier this month, multiple board members — supporters of the mayor — dismissed it. The district’s budget did not include borrowing to bolster finances or a commitment to cover a $175 million pension payment for city employees. A budget clash last year over those two items led to the ouster of former CEO Pedro Martinez and prompted the resignation of the previous board.
Two mayoral-appointed board members — Ed Bannon of District 1A and Anusha Thotakura of District 6A — flipped their stances and voted for the budget in a last-minute twist that drew gasps from the crowd.
“This was the best budget that we could get,” said Bannon to reporters after the meeting, noting that he made his decision after learning there was not enough board support for an amendment to the proposed budget that would make borrowing an option. “I wanted to vote yes for what was there.”
CPS officials were unable to make another budget presentation to the board at a meeting on Thursday, due to last-minute changes in the rules made by board members.
Taking out the $200 million loan could have led to CPS paying more in the future due to interest, for an estimated total of $394 million over 15 years, CPS Chief Financial Officer Miroslava Meija Krug said at a budget hearing earlier this month. In the weeks leading up to the vote, some financial experts predicted that the decision to proceed with borrowing would also likely harm the district’s credit rating.
The budget relies on $379 million not yet secured by the district in extra funds from special tax increment financing districts, known as TIF surplus. But multiple mayoral-aligned board members questioned the lack of an included backup plan in CPS’ fiscal proposal if TIF funding were to fall through or be less than the district had budgeted for, which Johnson-appointed board member Debby Pope of District 2B — who abstained from voting on the plan — reiterated ahead of the vote Thursday.
“I am very concerned that we are making a mistake in the sense that we are budgeting based on hope, rather than budgeting based on reality,” Pope said. “Unfortunately, I agree that hope is not a strategy … hope cannot be what we fill our classrooms with, because it just doesn’t work that way.”
Elected members pushed back.
“Some of us, including myself, grew up poor, but that doesn’t give us the right to make poor decisions,” said Che Rhymesfest of District 10A on the South Side.
This year, unlike last fall when tension rose, the mayor — a former teachers union organizer — had more influence over the budget’s future. Besides having the majority of board members’ support, Mayor Johnson also appointed interim CEO Macquline King, a former city employee, to helm the challenging budget decision.
But in recent weeks, she, like Martinez, had pushed back on the $200 million borrowing scenario proposed by Johnson. On Thursday, King sat, poised, and delivered a speech that recognized the political intensity and also the importance of the budget process for hundreds of thousands of children and parents in Chicago.
“Passing a budget means protecting our schools from further cuts and unlocking the opportunity to focus fully on enhancing the quality of education throughout our city,” she said.
Ángel Vélez recites an oath while being sworn in as a member of the Chicago Public Schools Board of Education during a board meeting at CPS headquarters on Aug. 28, 2025. (John J. Kim/Chicago Tribune)
Early in the meeting, the growing pains of the elected board were on full display as elected board members questioned the timing of Vélez’s appointment and whether he received sufficient training. Members of the public delivered emotional speeches to board members who were weighing the decisions before them.
Wanda Hopkins, a parent advocate and former Parents United for Responsible Education employee, spoke passionately to Johnson-aligned board members she previously worked with, including Aaron “Jitu” Brown and Debby Pope, and called for them to make a decision with Chicago’s children in mind.
“I’m saying to you board members…that you have the power to say not $1 go to the city of Chicago, but … go to the schools so there can be janitors, there can be programs,” Hopkins said.
The district has already taken steps in recent months to close the gap of hundreds of millions through the lay-offs of hundreds of teachers, paraprofessionals, custodial workers and crossing guards. Multiple services have also taken a hit, including afterschool hot meals that are now snacks.
To further bridge the gap, the district’s budget relies on the restructuring of $1.8 billion of accrued debt as well as $272 million in savings from a combination of cuts to central office spending, a hiring freeze of central office staff and the repurposing of existing grant dollars.
The budget allows for a pension payment to the city, contingent on money from the state, or city — through extra funds from TIF.
TIF remains point of contention, debate
CPS and the city are intertwined when it comes to TIF. State law establishes that part of surplus TIF funding goes to CPS, but decisions at the City level, including the number of projects approved each year and how much they cost, impact the amount of money left over and in turn, the amount of TIF surplus funding. CPS receives 52% of TIF surplus, the city 23% and other taxing bodies the rest.
Despite Johnson-aligned board members pushing back on the budget proposal, over 26 aldermen, who are responsible for determining TIF surplus by deciding which redevelopment projects in their districts should be prioritized and, thus, how much money is left over, signed onto a letter Wednesday supporting CPS’ plan.
The letter described borrowing to make the $175 million pension payment that covers nonteaching CPS employees as “willfully reckless.” It emphasized that aldermen would “support a TIF surplus to help balance both the city and CPS budget.”
While the aldermanic letter rejects the idea of borrowing to cover the pension for nonteachers, it doesn’t explicitly state that City Council will cover the payment. But CTU, one of Johnson’s closest allies, sent a letter Thursday thanking aldermen for “accepting full responsibility for it.”
In the letter, the union estimated the amount of surplus TIF money at $500 million and stated that if the tax increment financing funds were made available, it would be sufficient to both make the pension payment and avoid cuts to schools.
It is unclear if aldermen will come through with the amount of TIF surplus needed to meet those demands. But City Council has an incentive to allocate more money from the TIF funds because it will help them balance their own tight budget and increase the likelihood that CPS makes the pension payment.
In an interview with the Tribune before Thursday’s board meeting, CTU President Stacy Davis Gates requested that aldermen produce an estimate for this year’s TIF surplus.
“If City Council is going to be our hero in this moment, tell us the numbers so we can count on the restoration of cuts,” she said. “This isn’t politics to us. Dirty schools, cold lunches, that’s our reality.”
Thursday’s vote fell in favor of multiple stakeholders and unions like SEIU Local 1 and 73 who expressed support for the budget alongside lawmakers at the state and local levels, including State Sen. Willie Preston, a democrat from Chicago, who urged the board to “do the right thing” and approve King’s “responsible budget” ahead of the vote.
“Now I understand that this is tough. These choices are tough, but there’s a difference between tough choices and bad choices,” Preston said. “This proposal that you all may consider, to take out a loan, mortgages off the future of the children that you are claiming to protect.”
Originally Published: August 28, 2025 at 10:05 PM CDT