CPS leaders present plan to close $700M+ budget shortfall that avoids cuts to classrooms

CHICAGO (WGN) — Chicago Public Schools leaders presented a budget proposal on Wednesday that closes an approximately $734 million deficit by laying off crossing guards, custodians, cafeteria workers and central office workers.

The proposal says the district will refinance debt, spend down a reserve fund and rely on a $25 million philanthropy grant and nearly $380 million in TIF surplus from the city.

$175 million of the budget deficit is due to a pension payment. In the proposal, CPS agreed to front the pension payment but only if it receives more funding from the state or TIF surplus from the city.

The Chicago Teacher’s Union released a statement on the proposal saying in part:

“If the CPS budget doesn’t give the Board the *option* to borrow in the future, then if their math doesn’t come together and new revenue doesn’t arrive in time, Chicago’s students and educators will face devastating mid-year cuts and furloughs that everyone is against.”

Next Tuesday, CPS will hold two public hearings on the budget proposal. The school board will hold a vote on Aug. 28. By law, a new budget must be passed by Aug. 29.

‘Cut or invest’

On Tuesday, Mayor Brandon Johnson said only two choices remain.

“We’re either going to cut or invest,” Johnson said. “Those are our options right now.”

The Chicago Teachers Union, meanwhile, is calling on Gov. JB Pritzker to convene a special session of the General Assembly to address the deficit in state funding. So far, there has been no commitment from the governor or state lawmakers. 

A report from the state’s Board of Education last week showed CPS would need $1.6 billion more in state funding to provide an adequate education to students.

“I want a fully funded public education system,” Johnson said. “Parents around the city want that. They’re advocating for it. They’re also advocating for $1.6 billion that the state of Illinois rightfully owes the children of this city.”

CPS leadership and several city officials met last with without King. Some suggestions made were taking out a $200 million loan and asking for new state funding, while also accepting responsibility for a controversial $175 million pension payment.

CPS is facing the pressure to make that payment, which shifted from the city to CPS in 2020 and would cover non-teacher staff. Additionally, the district is already facing an existing $9 million in long-term debt.

King has reportedly resisted the mayor’s plan to take out a high-interest loan. The interim CPS CEO wants to address the approximately $734 million budget shortfall by refinancing the debt, making more cuts and getting money from the city and state.

In an interview with WGN News last month, King said she wants to avoid classroom cuts as much as possible.

“So, everything is on the table,” she said when asked by how she would address the budget shortfall. “Everything is on the table. However, everything is on the table centered around students.”

The debate over the district’s finances comes at the same time Johnson is looking for ways to plug the city’s more than $1 billion budget gap.

‘Already cut to the bone’

Community leaders and organizers gathered Wednesday, calling on CPS to explore other options to address the budget shortfall, aside from cutting staff or programs, and asking the state for help.

“We’re calling on the state legislature, we’re calling on Gov. Pritzker, to declare that our schools are in a disaster,” Chicago resident Ieliot Jackson said. “We’re asking for a state of emergency to be declared so that our children don’t have to be the burden-bearers for a deficit they didn’t create.”

Dr. Angelique Orr, Westside Rising Director, said “our schools have already been cut to the bone.”

“Our children have already suffered because of displacement, continuous displacement, that keeps them unstable in housing, in food, in every resource that we say we all deserve,” Orr said. “We’re calling on our public officials, our government — we appreciate the funding — but we’re saying, no cuts to Black and brown schools across Chicago and across this state.

“We’re saying, we need to invest in our young people. If we don’t invest in our young people, we don’t invest in our future.”

Custodial workers also rallied Wednesday, saying they were blindsided by cuts and asking CPS to fully staff schools to keep them clean.

“Our kids will be walking into classrooms that aren’t prepared, that aren’t cleaned,” Gregory King, a member of Service Employees International Union Local 1, said. “Parents will be worried whether their kids are in a healthy environment, or a safe environment.”

Izabela Miltko-Ivkovich of SEIU Local 1 said custodians “are the heart of our schools.”

“So CPS, we have one clear demand: Think about what you’re doing, think about what you’re doing for our children, think about what you’re doing for their schools,” Miltko-Ivkovich said. “Come to the table, come up with a clear transition plan, and don’t do it behind closed doors.”

Following public comments at Wednesday’s meeting and then a recess, the Board of Education is slated to discuss a resolution to adopt a fiscal budget for the 2025-26 school year.