The Chicago Teachers Union and Chicago Public Schools this week both floated an idea to use tax increment financing funds to cover the $462 million needed for next year's $9.9 billion school budget.
Why it matters: CTU and CPS agreeing , at least in part, on a possible funding source could be a step in the right direction of funding schools and finalizing a contract between the union and the district.
How it works: TIF districts are designated geographical areas used to attract new development, such as a commercial building or housing.
- The growth in property taxes generated from the new investment in the district can then be used to pay off development debt and fund public services like parks, roads and schools.
By the numbers: The city has 124 TIF districts that collectively raked in $1.2 billion last year and have a total balance of $3 billion, the Tribune reported , but the city regularly does not spend all of that money, leaving an annual TIF surplus.
- CPS CEO Pedro Martinez told WTTW he asked the mayor back in April for $462 million in TIF surplus to cover a pension shortfall and the upcoming teachers' contract.
- CTU wants the city to end its use of TIF districts completely, which it says would generate a surplus of about $1 billion, which could be used for schools.
The intrigue: The city has already agreed to use $159 million in TIF funds for CPS.
The other side: Critics of TIFs have long characterized the districts as slush funds for the mayor and alders, who often use the money to incentivize private developers rather than support public entities meant to serve residents.
Reality check: Supporters of TIFs argue that those new developments — often seen as neighborhood improvements — would not have happened without TIF support.
- "We have plans to redesign the Armitage/Ashland intersection , build a new bridge over the Chicago River, a new multi-modal Metra station and extend the 606 bike trail," Ald. Brian Hopkins (2nd Ward) tells Axios. "CTU wants to cancel those projects and instead use the money to meet their 9% salary increase demands."
What they're saying: "Our revenue recovery plan is necessary right now to stave off mass layoffs, school closings and more furloughs that will wreak havoc on our students and classrooms," CTU president Stacy Davis Gates said in a statement.
- "On April 30, 2024, the Board president, my leadership team, and I presented a solution to the Mayor's office to use TIF funding from the City to help cover the cost of pension payments and new labor contracts without making cuts or taking out loans. We have continued to advocate for additional TIF funding in regularly scheduled meetings with the Mayor's office and with alderpersons," Martinez said in a statement.
What we're watching: How Mayor Brandon Johnson responds. He said Wednesday he wholeheartedly supports using the kinds of TIF surpluses CPS is suggesting (calling it his own idea), but told reporters he had not had a chance to study the CTU proposal.
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