Mayor Brandon Johnson was accused Tuesday of proposing a $1 billion tax increment financing surplus to bail out the Chicago Public Schools at the expense of neighborhood improvement projects, a move roundly condemned by City Council members.
The record TIF surplus that would provide $552.4 million to help bankroll a new teachers contract emerged as the key point of contention during the first day of Council hearings on Johnson’s proposed $16.6 billion budget.
Mayoral allies and critics alike were united in their opposition to a TIF surplus that they fear could derail or, at the very least, delay indefinitely improvements to their local schools, parks and libraries, as well as job-creating economic development projects.
Eighth Ward Ald. Michelle Harris, the Rules Committee chair and powerful member of Johnson’s leadership team, said she cannot go along with such a “drastic sweep” of TIFs that serve as lifelines in predominantly Black neighborhoods like her own.
“You now say to communities like mine who don’t have $40 million or $50 million in a TIF, that we can’t do future projecting,” Harris said. “If we sweep TIFs in communities like mine, then my future projects are just dead. … Unintentionally or intentionally, we will lose projecting in communities of color. … It scares me to death that these projects have the potential to be taken off the table.”
Budget Director Annette Guzman insisted that top mayoral aides “did not delete a project or terminate a project” to achieve the $1 billion surplus, even though state law requires the city to “sweep anything that’s not encumbered for a project.”
Fully 83% of the city’s 108 TIFs are seeing growth and increased revenue “year over year, and two districts are seeing flat growth,” the budget director said. “We are not sweeping our entire fund balance.”
Every year, the equalized assessed valuation within the city’s 108 TIF districts “continues to grow above beyond what was there before,” Guzman added. “Not only will you see a replenishment of your TIFs for… projects next year, but future projects.”
Ald. Nicole Lee (11th) said she was shocked at the size of the surplus and found it particularly “off-putting” that local alderpersons whose TIFs are being depleted were not consulted.
“I have a field house … where we’re waiting for the park district to contact an engineer and a designer to give us the cost. Now that TIF is going to be completely swept down to like a couple million bucks,” Lee said.
Ald. Jason Ervin (28th), the Budget chair, joined the avalanche of opposition, noting that 70% of the TIF surplus is “coming out of socially economically disadvantaged areas” like his own West Side ward.
Ervin created yet another political headache for Johnson by demanding that CPS reimburse the city for a long-disputed, $175 million pension payment for nonteaching school employees that triggered the mass resignation of the mayor’s appointed school board and the firing of Chicago Public Schools CEO Pedro Martinez.
The proposed 2026 budget does not count on the city receiving that money.
“This budget will not leave this committee without a signed intergovernmental agreement from the Chicago Public Schools related to their pension obligations previous and post to us. We must have that in order to move forward … on this budget process,” Ervin said. “Hopefully, somebody on their end is listening.”
The $21 a month per-employee corporate head tax and 14% cloud computing tax that Johnson is counting on to generate $433.2 million in new revenue was not a focal point during the first day of budget hearings, though business leaders have denounced them as “job killers.”