Chicago Public Schools Budget Proposal
On Wednesday, Chicago’s public school leaders introduced a budget plan aimed at addressing a significant $734 million deficit. This proposal incorporates various strategies such as cuts to operations and central administration, refinancing efforts, the use of $65 million from a reserve fund, charitable contributions, and an expectation of $379 million from municipal sources.
The plan includes a stipulation that the district will make a $175 million payment towards municipal pension obligations, albeit with certain conditions attached. There’s a push for increased state funding or additional income through tax increment financing (TIF), which is a designated taxing area within the city.
Officials from the school district assert that they can achieve a balanced budget without relying on previous loans that were used to resolve last year’s deficit. However, there are ongoing concerns regarding the district’s debt, as it appears to be accumulating more obligations.
Mike Sitkovsky, the budget director, emphasized the thoroughness of their review process, stating, “We examined every line to ensure a plan focused on students and fairness.”
Several school board members characterized the budget as a preliminary document, open to modifications before the final vote scheduled for August 28.
Board member Michilla Blaise expressed skepticism, highlighting the budget’s reliance on assumptions, particularly the anticipated $379 million from the TIF surplus, which lacks guarantees related to pension payments.
“This arrangement seems precarious,” she remarked. “We really need to be good partners. It doesn’t feel right considering these are our employees and their pension funds.”
Another board member, Zitu Brown, echoed concerns regarding the plan’s political feasibility, while Emma Lozano expressed doubt about its viability altogether.
Nevertheless, Jessica Biggs pointed out an inconsistency from earlier discussions where it was suggested that CPS shouldn’t be responsible for pension payments.
Sitkovsky mentioned that last year, CPS did receive $379 million from the TIF surplus, which provided some confidence for this year’s inclusion.
The city is counting on CPS’s $175 million contribution to aid in funding local pension obligations. It’s worth noting that a significant percentage of pension beneficiaries are CPS retirees who are not teachers.
Concerns loom among board members about the repercussions of failing to meet these payments. The district’s reliance on the anticipated TIF surplus is notable, yet its actual availability is contingent upon approval from the mayor and city council.
Alderman Andre Vazquez publicly supported CPS’s stance on pension payments, contending the city has a legal obligation to cover these costs, while suggesting that financial incentives could be improved.
The proposed budget aims to eliminate the deficit, which has already decreased to $569 million post-summer cuts. The plan anticipates an extra $149 million in revenue, largely from TIF surpluses, alongside refinancing efforts projected to save $29 million. Additionally, $90 million from one-time funding sources, including the Debt Services Stabilization Fund, is also part of the strategy. If further TIF revenue or local assets are secured, the $175 million pension payment will still be prioritized.
At a recent meeting, members were seen rallying for a “no-cut” policy, demonstrating their commitment against staffing reductions.
Member Karen Zackor mentioned hearing from her constituents who opposed any measures that might worsen the deficit. She expressed willingness to support a loan if it meant preserving educational services.
“It’s a tough choice,” she said, “but if it comes down to cuts or loans, I’m in favor of a loan. Parents are pleading with us not to compromise their children’s education.”
Previously, concerns about taking loans were raised due to high interest rates that might restrict future district capabilities.
Zackor addressed these worries, noting the need to select the lesser of two evils in a dire situation. “We cannot sacrifice the well-being of our kids,” she asserted.
While she and member Emma Lozano contemplated whether CPS should assume responsibility for local government pension payments, they acknowledged the ongoing contentious debate surrounding this issue.
Recent budget cuts have already impacted staffing levels significantly, affecting numerous custodians, lunchroom staff, and crossing guards, leading to widespread concern.
Community organizations have also voiced their discontent with staffing cuts while urging the governor for increased state funding.
The SEIU union, representing various support staff, continues to confront the district over its decision to cut custodial positions. CPS recently notified 1,250 custodians that their jobs would be terminated, although there’s a possibility to reapply for a reduced number of positions.
Rebeca Salazar, a long-time custodian, expressed her frustration, explaining the personal toll this decision has taken on her and her family. “After 25 years of service, I now face starting over. My dedication to this district has always gone beyond just a job,” she said.
