The $9.88 billion Chicago Public Schools budget is out

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Facing intense financial pressures, Chicago Public Schools officials unveiled a proposed $9.88 billion district budget that includes five furlough days and a spending freeze that could start in January. But they said they hope to avoid those measures by persuading state lawmakers or the city council to steer more dollars to the school district.

District leaders said hundreds of staff layoffs, a push for more revenue, and other cost-saving measures took a $450 million bite out of the $732.5 million deficit the district faced this summer. To help close the remaining gap, CPS is bumping up the amount it expects the city would contribute in special tax dollars for development, known as TIF, from $100 million to $200 million. Last year, CPS received more than $500 million in TIF dollars, a record amount, but district officials said they wanted to be more conservative in projecting this year’s influx.

Unless even more city or state revenue materializes, the district will furlough all staff for five days when students are scheduled to be out of school and teachers are expected to get professional development — a move that would save $85 million. The district also would freeze some hiring and other spending in the second half of the school year.

“This process is painful for everyone all the way around,” said schools chief Macquline King on a call with reporters. “Ultimately, the budget we have presented is one that does its absolute best to meet the diverse needs of students.”

The district’s teachers and principals unions and some school board members decried the cuts, saying they will affect students.

The district is laying off about 760 teachers and 800 school-based support staff this week, though officials said that the majority will likely get rehired to fill vacancies on other campuses.

The district shared budgets with schools in May and finalized them in early June, but it has not disclosed campus budget allocations. More than 160 central office and citywide administrators were laid off on Friday — a move that CPS said will save $18 million. The blueprint presented Wednesday includes spending on pensions, debt service, and central and districtwide staff.

Last year, the district issued layoff notices to 1,450 teachers, support staff, security officers, and other employees. Officials said that in line with previous years, about 75% of them were rehired. District leaders said that while there will be fewer general education teachers after the district increased student-to-teacher ratios by one student, it is boosting the number of bilingual and special education teachers and classroom assistants. That will result in a net school-based position loss of about 160 in the district, which employs more than 37,000 people on its campuses. Factoring in contractual pay increases, CPS is sending $143 million more directly to schools compared with last year.

District officials again stressed the tough financial realities CPS faces: The costs of employee pay and pensions, the district’s massive debt, and upkeep for Chicago’s aging school buildings keep going up. The district added thousands of new positions using federal COVID aid during the pandemic even as enrollment shrank. District leaders have defended the staffing growth, saying it allowed schools to address longstanding staffing gaps and speed up its recovery. Despite significant state funding increases in recent years, CPS remains about $1.6 billion of what Illinois estimates would make for “adequate” funding.

CPS is asking the board to approve the budget by July 30, which officials say will give them enough time to borrow money against its future tax revenue to address cash flow issues amid a Cook County property tax delay.

Wednesday’s budget is the first fully shaped by King, who stepped in on an interim basis last summer when outgoing schools chief Pedro Martinez had already finalized school budgets. King crafted the final $10.2 billion budget, notably declining to take out a high-cost loan to pay into a city pension fund covering some CPS support staff despite pressure from the mayor’s office.

This week’s budget proposal also did not include a contribution toward the Municipal Employees’ Annuity and Benefit Fund. District officials touted the fact that the new budget does not add to the district’s $9 billion debt, with interest and other costs diverting hundreds of millions of dollars that could go toward instruction and support services.

King described the budget as “thoughtful, responsible, and entirely student-centered.” But the proposal left some board members concerned about how cuts would impact schools in their districts.

Anusha Thotakura, an appointed board member who represents the Near North Side and West Town, said many schools have experienced cuts “year after year,” and she wants to see more investments that parents want, such as in early childhood education and dual language programs. At the same time, CPS is in a difficult spot, she said.

“When you start with a pie that is too small and are forced to figure out how to cut it and a way to feed people, you’re never going to win,” said Thotakura, who has advocated for more state funding.

She said she hopes CPS and board members will work extra hard over the next year to secure additional funding, including from the state and city.

In a statement, Stacy Davis Gates, president of the Chicago Teachers Union and Illinois Federation of Teachers, called the proposal “dead on arrival.” Furloughs, she said, are another blow to educators who are already working in schools that are stretched for resources.

The union, along with allied board members, have called on state lawmakers to raise money for schools through progressive taxes and more recently pressed CPS to sue the county treasurer’s office over late tax payments.

“Does anyone in this state other than CPS educators have power to help school children instead of hurt them?” Davis Gates said in the statement. “It’s time for them to use it.”

Kia Banks, the head of the Chicago Principals & Administrators Association, said in a statement the union understands district leaders are in a tough spot. Still, she’s unsure the proposal, which eliminated assistant principals in small schools, represents “the strongest path forward.”

“We are extremely disappointed by the possibility that students could lose resources, programs, and support they need and deserve,” Banks said.

But Danny Vesecky, senior research and policy associate at Civic Federation, said that while layoffs are painful structural changes, they will permanently reduce the district’s expenses. It’s also the “right direction” for the district to move in after federal COVID relief money went away but investments fueled by those dollars, such as more staff, still exist.

“There is unfortunately no way to address that other than unwinding some of the increase in spending that we engaged in in previous years,” Vesecky said.

Vesecky also described furloughs as a reasonable yet temporary solution, since those savings won’t reduce the district’s expenses or deficit in future years.

Mila Koumpilova is Chalkbeat Chicago’s senior reporter covering Chicago Public Schools. Contact Mila at mkoumpilova@chalkbeat.org.

Reema Amin is a reporter covering Chicago Public Schools. Contact Reema at ramin@chalkbeat.org.