The Chicago Board of Education approved a small increase to its property tax levy on Monday that will allow the district to collect about $40 million more than originally planned.
For taxpayers, that means someone with a $250,000 home will pay about $8 more next year.
The school board approved a property tax increase back in August, but this revision means the district will fetch 4.78% more in property taxes than last year.
Board members approved the increase by a vote of 15-5. Those in favor argued the cash-strapped district needed to take advantage of all its revenue-raising tools, while opponents said residents can’t afford any further increases to their taxes.
Acting Chief Financial Officer Wally Stock explained that when the board approved the original levy in August, it didn’t have all the information it needed from the Cook County Assessor’s Office and had to make a best guess at how much it could legally collect in property taxes.
The district estimated its tax base would grow by a little less than 4% but it grew by 10%, Stock said, allowing the district to collect more.
About $25 million of the $40 million is slated for the district’s operating budget, which pays for things like supplies, salaries and equipment.
“We have very few levers that we can pull in terms of what we can do to raise revenues,” Stock said. “This isn’t going to alleviate all the pressure that we have going forward, but $25 million is no small amount of money, and it will help on some level.”
About $10 million will go to teacher pensions and about $5.7 million will go toward special education transportation, which the district has struggled to provide. But that’s only a fraction of what the district spends on transportation.
Still, the district will take any extra revenue to help shore up its finances. Debt and interest payments weigh heavily on CPS’ budget. Delays in collecting property tax revenue have forced CPS to take out $1.6 billion in short-term loans so far. The school district pays $220,000 in interest on those loans every day it goes without that revenue.
Stock said as of Friday the district has only received about 20% of its property tax payments from Cook County and is still waiting for over $1.3 billion.
The district this year faced a $734 million deficit that it closed by making cuts, including some crossing guards and central office staff, and refinancing some debt. The City Council agreed to give CPS a one-time infusion of cash through special taxing districts called TIFs in the budget it passed earlier this month.
Property taxes are CPS’ largest source of revenue and the district has routinely sought to collect as much property tax as allowed by state law, which dictates that tax hikes for education can’t exceed the rate of inflation.
Board member Angel Gutierrez said he voted against the measure because the residents he represents on the Southwest Side can’t afford another tax hike.
Tax bills skyrocketed for some this year after property reassessments shifted the tax burden from commercial properties in the economically depressed Loop to neighborhood homeowners. On the South and West sides, the median residential property bills rose by more than 30% in 15 community areas.
“For them, another tax increase is not a budget line, it’s the difference between stability and displacement,” Gutierrez said. “You cannot keep funding the system on the backs of the same families who are already drowning.”
Gutierrez suggested the district first look at long-term reforms, cost cutting and other solutions before asking for more money from taxpayers.
North Side board member Ellen Rosenfeld, who also voted against the increase, said the cash-strapped district instead needs to “right-size.”
“Until we address the root causes, more revenue from a property tax increase is a temporary fix to a permanent problem,” Rosenfeld said.
Those who approved the increase said the district needs to take advantage of the few funding levers it has to strengthen its financial footing. Stock said the district is facing a tight cash flow situation and finished the year spending $339 million more than it took in, resulting in more borrowing.
Board member Debby Pope, who also represents a North Side district, said it was important to approve the increase because “we do not have all the resources we need to provide the high-quality education to every student at CPS.”
Pope and other board members also pointed to instability in federal funding. The Trump administration canceled the district’s Magnet Schools Assistance Program grant earlier this year and more funding is still under threat. On top of that, the cost of fighting the administration in court is mounting.
“At a moment when [President] Donald Trump and his allies are openly threatening public education and federal support for our schools, weakening CPS from within is simply not an option,” said Far Northwest Side board member Jennifer Custer.