Introduction to the Crisis
Chicago Public School officials and union officials came together Tuesday to lay out options for solving CPS budget crisis for City Council members, including refinancing existing debt and cutting $126 million more in administrative costs outside of classrooms. But they did not offer a firm decision on whether the school district would make a $175 million municipal pension payment that has been a continued source of controversy.
The Budget Deficit
Some City Council members said they were frustrated that CPS failed to present a specific plan for closing the district’s $734 million deficit. The district must unveil a fully baked budget by Wednesday so it can be approved before the end of August, a legal deadline.
Proposed Cuts and Savings
One of the only firm details to emerge was that CPS leaders told City Council members that they have found $126 million more in cuts, on top of the $146 million previously announced. That includes $50 million by reducing central office personnel and “streamlining” costs and a $10 million central office hiring freeze, as well as $30 million by repurposing grants.
Options for Closing the Budget Gap
In terms of coming up with $462 million more in savings, sources at City Hall say CPS leaders are considering rejecting the city’s demand that CPS pay the $175 million payment to help cover the employer contribution of the municipal pension fund, which covers non-teaching CPS staff. The other options are: refinancing existing CPS debt, borrowing or banking on revenue from the state or city that is not yet allocated or guaranteed.
City Council Members’ Reactions
Ald. Andre Vasquez (40th) said he did not learn specifics about how CPS will close its budget gap but that there was mention of somewhere between $100 and $200 million in refinancing. “They mentioned doing a TIF surplus, the need for state funding, and mentioned some level of refinancing or borrowing but they didn’t get into a lot of detail,” Vasquez said. “It did not feel like there was new information being shared but the fact that everyone is at the table and trying to find a solution is a step forward.”
The Role of the Mayor
Chicago Mayor Brandon Johnson has been pushing for over a year for the school district to make a $175 million municipal pension payment that covers CPS staff who are not teachers. Mayor Brandon Johnson did not offer details at a City Hall news briefing Tuesday, but has been strongly opposed to any cuts.
Union Strategies
In a press release Tuesday, the Chicago Teachers Union indicated that lobbying the state to provide more revenue is a key strategy. CTU leaders stressed the state’s acknowledgement earlier this month that CPS is moving further away from being equipped to provide an “adequate” education, as defined by the state’s evidenced-based formula. CPS would need nearly $1.6 billion more in state funding each year to meet the student-to-staff ratios called for by the formula, according to the state’s calculation.
Unions Band Together
After a contentious year in which the former CPS leader battled with the CTU and that union was at odds with their sister union, SEIU, King stood with Davis Gates, Chicago Principals & Administrators Association President President Kia Banks and SEIU President Dian Palmer to make the case to lawmakers Tuesday. The presence of SEIU leaders at the briefings was especially notable. SEIU leaders, who represent 11,000 support staff members, have borne the brunt of previously-announced layoffs, including 677 special education classroom assistants, 500 custodians and more than 100 crossing guards.
What’s Behind the Deficit
The deficit stems from several factors: the end of federal pandemic relief money after CPS used it for a hiring spree over several years; rising transportation, special education and building maintenance costs; and expensive annual debt and pension payments that are the legacy of state underfunding. In her first days, King acknowledged that CPS had a $734 million deficit, which included the contested city pension payment.
Conclusion
The Chicago Public Schools are facing a significant budget deficit, and the district’s leaders are exploring various options to close the gap. While some progress has been made, including the identification of $126 million in cuts, a firm plan has yet to be presented. The decision on whether to make a $175 million municipal pension payment remains a point of contention, and the city’s demand for this payment could impact the district’s ability to secure additional funding from the city.
FAQs
Q: What is the current budget deficit facing the Chicago Public Schools?
A: The Chicago Public Schools are facing a $734 million budget deficit.
Q: What options are being considered to close the budget gap?
A: Options include refinancing existing debt, cutting administrative costs, and potentially rejecting the city’s demand for a $175 million municipal pension payment.
Q: What is the role of the mayor in the budget crisis?
A: Mayor Brandon Johnson has been pushing for the school district to make a $175 million municipal pension payment and has been opposed to any cuts.
Q: How do the unions fit into the budget crisis?
A: The Chicago Teachers Union and other unions are working together to lobby the state for more revenue and to find solutions to the budget crisis.
Q: What are the underlying causes of the budget deficit?
A: The deficit stems from several factors, including the end of federal pandemic relief money, rising costs, and expensive annual debt and pension payments.
