CPS faces possible midyear budget cuts as unexpected funding costs mount

Just a few months into the school year, Chicago Public Schools has overspent its budget and its emergency contingency budget for special education by $27 million — one of several “compounding financial pressures” that could mean midyear cuts if the school district doesn’t get more from the state in the state Legislative veto session that starts Tuesday.

Besides ballooning special education costs, CPS officials say they had to pay more than expected in interest on short-term loans to make payroll and received $19 million less in state funding than expected.

And these unexpected costs don’t even include the staff that CPS rehired this fall at the direction of school board members aligned with the Chicago Teachers Union. In a controversial move, these members approved a last-minute budget amendment counting on $150 million more from the state, even though it had yet to be committed.

The district only wound up re-hiring some of the staff laid off — 128 teachers and 153 support staff at a cost of $29 million. District officials are already planning to re-lay off those staff members as early as Dec. 1 if no additional money comes through, according to a memo obtained by the Chicago Tribune.

But district officials have yet to say how they plan to handle the other costs that are creating a hole in the district’s budget.

“The CPS Finance team is closely monitoring our budget, assessing implications of rising costs and a shortfall if no additional state revenue is received, and identifying potential solutions,” CPS officials said in a statement. “CPS will continue to keep our Board and community apprised of any additional financial savings that will need to be enacted this school year.”

Candace Dane Chambers/Sun-Times

CPS is also counting on the city pulling $285 million out of special taxing districts called TIFs and sending it to the school district. Mayor Brandon Johnson’s budget provides this revenue, but it has yet to be approved by the City Council, some of whose members have balked at the amount.

The CTU, in a message sent to its members on Friday, said laying off staff would create chaos and pointed out that rehiring staff turns out not to be the most urgent financial problem facing the district.

“Before CPS reversed one layoff at the beginning of the school year, the district was already coming up short because of the Governor and the Illinois General Assembly’s skipping its payments to Chicago and other districts across the state,” CTU leaders told members, referring to the fact that the state doesn’t provide the funding that it says CPS needs to provide an adequate education to students.

CPS leaders and board members, along with groups of members from CTU and other major CPS unions are planning to go to Springfield for the veto session to lobby for more money.

Still, many have said that the chances that CPS gets additional funding from the state is unlikely. House Speaker Chris Welch said this summer that he was open to it, but he will be a lame duck during the veto session, as he’s decided not to run for his leadership position. And Gov. JB Pritzker has repeatedly said it is “not going to happen.”

Justin L. Fowler/The State Journal-Register via AP)

Chicago isn’t the only school district hoping for more money.

The Illinois Federation of Teachers this month called on lawmakers to provide an additional $670 million towards education funding during the veto session, $400 million of which would go towards the state's general education funding and $100 million for services the state requires, such as transportation.

Those funds wouldn’t close the funding gap that exists statewide but would provide “urgently needed relief and help,” said Arnoldo Fabela, IFT director of field and organizing. In 2017, Illinois changed the way it distributed funds to school districts. The law established the amount of funding each district needs to provide an adequate education. Illinois has fallen way behind on meeting those targets.

Of about 940 school districts, 714 have moved further away from adequacy this school year. That’s despite education funding in Illinois rising overall under Pritzker. In Chicago, CPS now has only 70% of what it needs to provide an adequate education, down from 73% last year and 79% the year before.

Many factors are causing the state to fall short, including a change in the way the state counts the number of poor students and costs going up.

Any state funding package would likely need to include much more than what CPS needs and money for other underfunded districts in order to get any traction, making it a costly proposition. That means district leaders will have to get legislators from outside of Chicago on board with their plan. Some have expressed skepticism about giving schools in Chicago more money.

Sarah Karp covers education for WBEZ. Follow her on X @WBEZeducation and @sskedreporter.