The property tax hike would help close a budget gap of more than $700 million.
The board also discussed a plan to lengthen the school day and extend the school year.
The proposed budget for Chicago Public Schools includes job cuts, program cuts and pulling $240 million from the school system's reserves.
"While we had only a few weeks to build this budget, we made sure this was just not a cutting exercise but one of investing in the right place to create what we know our families are actually asking us to do for them," said Jean Claude Brizard, CPS CEO.
The new administration inherited a $712 million deficit for the fiscal year 2012. To close the gap, cuts include:
Administrators acknowledge that looming budget deficits in the coming years cannot be made up by more property taxes for Chicago residents.
"We have to look at what the alternatives are there but we are cautious that taxing our way to success is the answer," said CPS chief administrative officer Tim Cawley, who laid out the budget.
Several speakers voiced concern about the proposal.
"As a retired teacher and a homeowner in Chicago, I am concerned about the property owners tax increase. I will be very honest," said Geraldine Baginski.
"I don't want my children in one classroom dirty. I want my children in safety place. So please think more about the children and forget about the money," said Milagros Roman.
The proposed budget does not cut into classrooms.
Chicago Teachers Union president Karen Lewis is troubled by what she says was a hastily prepared proposal with errors. However, on the issue of preserve funding for education she is agreed.
"I think they've made an attempt in the right direction, and that's good," said Lewis.
CPS had already announced cuts they were making to the central office staff.
The proposal also cuts to janitorial service and some programs like mentoring and extracurricular math and science clubs. The property tax would cost on average $84 for Chicagoans and it would be reflected in the second installment of taxes due out in the fall.
At 4:30 p.m., the budget and the tax increase had not gone up for a vote yet.