Chicago School Board Approves $10.2B Budget Without Pension Payment Amid Financial Crisis

The Chicago Public Schools Board of Education approved a $10.2 billion budget for the 2025-26 fiscal year aimed at closing a $734 million deficit without resorting to a controversial high-interest loan or making a pension payment to the city unless new state or local revenue becomes available. The budget passed with a 12-to-7 vote, surprising many as it rejected Mayor Brandon Johnson's push to make the pension payment and borrow funds, despite his influence on the board. The district's financial troubles are largely attributed to spending increases driven by the addition of nearly 8,000 staff members since 2020, which led to a $2.4 billion rise in expenditures. Historical financial mismanagement and structural budget issues, including deficits dating back to 2016, have exacerbated the district’s fiscal challenges. Temporary relief came from $2.8 billion in federal pandemic funds used between 2020 and 2025, but deficits resumed once those funds were exhausted, despite record-high revenues. The budget approval marks a significant effort to manage the district’s financial crisis while avoiding measures that could harm its credit rating.