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Chicago Public Faculties is struggling to pay a few of its payments and is dealing with growing strain to keep away from layoffs because it searches for tactics to shut a $734 million deficit.
The district’s finances challenges are probably the most extreme in not less than the previous 5 years and have already resulted in dozens of layoffs of central workplace workers and crossing guards. Officers stated beforehand that school-based layoffs would occur in July and lecturers union leaders are demanding retroactive raises be despatched out as quickly as doable.
This yr’s finances would be the first authorized by town’s new partially elected faculty board.
District leaders should discover a solution to shut the deficit both by discovering extra income, making extra cuts, or borrowing cash. Their plan have to be authorized by the 21-member Board of Training, which met Wednesday to carry an hourslong closed session and assessment its agenda for its full board assembly later this month.
The brand new fiscal yr is underway, however the district isn’t anticipated to finalize a finances till Aug. 28. By state legislation, Chicago’s faculty board can approve a finances as late as the top of August.
Thus far, CPS has closed simply over one-fifth of the finances hole via varied cuts, together with via layoffs and reductions in some contractual prices, finances director Mike Sitkowski advised the board on Wednesday. Large pressures on the finances embody rising prices for college kids with disabilities, who’re legally entitled to further help, and the price of sustaining growing older buildings, he stated.
By 2030, the district’s deficit might be $1.3 billion except the district finds extra everlasting, long-term income, Sitkowski stated.
CPS’s finances hole this yr might develop after the Trump administration introduced final week it will withhold and reevaluate some streams of federal funding, which quantity to about $60 million for CPS, Sitkowski stated.
Board members requested a number of questions, together with whether or not they should think about a much-debated $175 million pension cost to town, which isn’t required by state legislation, and whether or not there may be wasteful spending that the district might curb to keep away from cuts. Although the district’s finances challenges have been shared with the board for months, a number of board members stated they’re feeling unprepared.
Interim CPS CEO Macquline King stated the district will maintain 5 conferences from July 14 to July 21 to gather public suggestions on how CPS ought to shut its finances hole.
In an announcement to households earlier this week, King stated CPS is “presently working with state and native companions to maximise alternatives for extra income, together with Tax-Increment Financing (TIF) surplus funds.”
CTU pushes for state legislative session to deal with funding
Throughout a rally Wednesday exterior Board of Training headquarters, Chicago Lecturers Union Vice President Jackson Potter known as on CPS to keep away from workers layoffs. Potter pushed for extra funding, together with from new state taxes and a metropolis pool of tax {dollars} referred to as Tax Increment Financing, or TIF.
A non-public district presentation to board members in April provided one situation: With a deficit of $734 million, CPS might lower 10% of funding that goes instantly to colleges. That April presentation additionally advised that with the intention to shut a smaller $529 million deficit, CPS would want to eradicate 1,600 school-based positions.
The present deficit determine contains the pension reimbursement to town. It additionally doesn’t assume that CPS will get roughly $600 million in TIF surplus {dollars} — one thing Martinez pushed for earlier than his departure.
Mayor Brandon Johnson supplied CPS with a record-high of roughly $300 million in TIF surplus {dollars} final fiscal yr, and a few observers have described the push for extra as wishful pondering.
Service Workers Worldwide Union 73, or SEIU, which represents faculty help workers, and CTU have additionally known as on extra TIF funding, however lecturers union leaders have additionally supported borrowing cash and discovering new income to pay it off.
Some faculty board members view borrowing as a short-term avenue to keep away from painful cuts at colleges, whereas others fear about high-interest debt repayments that can take cash away from school rooms.
At its rally Wednesday, the lecturers union demanded that Gov. J.B. Pritzker name a particular legislative session with the intention to allocate extra state funding to schooling funding in gentle of potential federal funding cuts. A number of states, together with New Mexico and Colorado, are contemplating calling particular periods in response to President Donald Trump’s tax invoice that imposes cuts to social security internet applications.
The state created a brand new funding components in 2017 that gives more cash to all districts throughout the state, however prioritizes further {dollars} to these with greater wants. Illinois lawmakers set a purpose to totally fund all districts by 2027, however projections point out they gained’t make that deadline.
The state has sometimes supplied an annual improve of $350 million in funding for all Illinois districts — although this yr, that improve was $307 million. Since 2017, Illinois has elevated what it spends on Ok-12 schooling by greater than $2 billion, and in that point, state funding for CPS has elevated by $1.1 billion. Nevertheless, the components says CPS continues to be $1.2 billion in need of what’s thought of ample.
On Tuesday, Alex Gough, a spokesperson for Pritzker’s workplace, referred Chalkbeat to an announcement final yr from Pritzker saying he’d wish to fund schooling extra — and famous that the state hasn’t but totally funded its personal components — however stated, “Now the query is, the place do you discover the {dollars} to do this?”
On Wednesday afternoon, Pritzker’s workplace issued a information launch that known as Trump’s finances invoice “harmful” and a “main setback for college kids throughout the nation.”
“Right here in Illinois, we’ll do every little thing in our energy to guard the general public schooling techniques we’ve labored so laborious to enhance and proceed supporting college students in each approach we will,” Pritzker stated in an announcement.
Union officers stated Pritzker ought to think about varied revenue-raising methods, together with new taxes on capital positive aspects and digital promoting.
“For the governor to say we’ve performed every little thing we will is patently false,” Potter stated. “We have to do extra — that’s their very own dedication.”
Gough declined to remark when requested if Pritzker is contemplating calling a particular session.
CPS might delay retroactive pay raises for union members
Individually, Potter additionally stated CPS should pay the union’s members retroactive pay they’re owed after getting a brand new contract, noting that the district stated it might afford these raises when it settled its new contract with CTU.
WBEZ first reported this week that the district could not have sufficient money available till the autumn to pay CTU members retroactive raises stemming again to final July, when their contract expired. The $100 million price ticket represents the annual 4% raises included within the new contract, which was finalized this Could.
Sitkowski advised WBEZ that CPS will get a second tranche of property tax income from Cook dinner County within the fall. CPS didn’t reply to Chalkbeat’s questions in regards to the retroactive pay challenge.
The district sometimes supplies retroactive pay “when payroll has the tax receipts to allow the cost,” Potter stated. Absent these county tax {dollars}, Potter stated all emergency funding “choices have to be on the desk” with the intention to pay CTU members in a “well timed method.”
Reema Amin is a reporter protecting Chicago Public Faculties. Contact Reema at ramin@chalkbeat.org.
