Chicago Public Schools could get about $300 million to fill its budget shortfall after Mayor Brandon Johnson on Wednesday proposed a record tax hike funding surplus for the second year in a row. But that’s far less than Schools Superintendent Pedro Martinez asked for, and the city says the school district is still on the hook for a $175 million pension payment.

The huge amount in the city would be unprecedented, but it does not resolve the public dispute between Johnson and Martinez that led to disturbance at the Board of Education as it does not answer all questions about future CPS spending.

For this year, the district’s funding gap would be cut in half, leaving CPS with about $185 million in expected costs it can’t currently afford.

Tax Increment Financing is a financing tool that uses property taxes to stimulate local development in certain geographic areas around the city. The Mayor and Budget Department can use unspent or unobligated money from the city’s many TIF districts as a one-stop solution to balancing the city’s budget. This is called declaring a TIF surplus. CPS receives 52% of this money.

To address the CPS budget shortfall, Martinez asked Johnson $484 million in TIF funds this year, a request that was always unlikely because it would have required declaring a total surplus of more than $900 million. That would be politically challenging because City Council members rely on that money to attract development to their wards.

Instead, in the city budget proposal that Johnson unveiled Wednesday, the mayor declared a still-unprecedented TIF surplus of $570 million, giving CPS about $300 million plus another $11 million to support building improvements. CPS was already counting on getting $160 million in TIF dollars.

The new TIF dollars would put Martinez halfway to covering some key expenses left out The CPS budget was approved in July.

That hole includes an estimated $150 million in contracts with the Chicago Teachers Union and a new principals union that are being negotiated. And there’s a $175 million pension payment for non-teacher CPS staff that Johnson insisted the district make, but Martinez balked, saying he needed city funding for that. The Board of Education did not approve that payment.

Martinez’s $485 million TIF request — including the $160 million CPS already had in the bank — would have covered those two obligations.

But with a surplus of just $300 million, the CPS hole dropped to $185 million

CPS will need to continue to advocate for funding solutions from Springfield lawmakers. Otherwise Johnson’s New Board of Educationwhich is scheduled for its first full meeting Friday, may have to consider an unpopular option rejected by Martinez and the previous board: a loan to cover the remaining amount.

But Martinez suggested to the City Council that they could find efficiencies to reduce spending. He promised there would be no mid-year cuts to school staff, which Johnson rejected.

The city also said it is counting on CPS to make the disputed pension payment this year and for the two years after that, setting off future battles if a solution to CPS’s long-term funding shortfall is not found.