CPS projects $391 million deficit next year

Chicago Public Schools officials will have to find $391 million in additional funding by next summer or face cuts across the school system in the face of a massive structural budget deficit.

District leaders and Board of Education officials for the past year have warned of a financial cliff approaching next school year when federal COVID-19 relief funding runs out. That money had papered over a structural deficit that officials estimate at $691 million for next year. With only $300 million in federal funding left to spend, CPS’ budget hole becomes exposed.

At Wednesday’s monthly Board of Ed meeting, officials updated their projections and laid out the dire picture.

CPS expects to once again increase property taxes to the cap next year at around 3%, pulling in an additional $166 million. Another $53 million in state funding is estimated to help fund operations and pay for pensions. But CPS projects it’ll lose $118 million in state tax dollars, plus face higher costs because of inflation, health care increases and debt payments.

That’s all accounted for in the projected deficit.

“This is a revenue problem, not an expense problem, and one that’s driven by inequitable and inadequate funding,” CPS budget director Michael Sitkowski told the board.

While spending has gone up over the past decade even with fewer kids at CPS, the district still isn’t fully meeting students’ needs, officials said. The school system serves hundreds of thousands of students from low-income families. Thousands are in special education. Thousands more are homeless. Many have deep trauma from poverty, community gun violence and other hardships. All those factors mean it takes more money to educate those kids with counselors, social workers, high-intensity tutoring and other support.

CPS only receives about three-quarters of the funding it needs to adequately serve its students, according to state officials’ estimates. That comes out to about $1.1 billion in missing money.

The state also doesn’t pay CPS teacher pensions like other districts in Illinois, amounting to another $700 million Chicago doesn’t have available to spend.

“Progress in any of these areas would help to solve this $391 million budget gap,” Sitkowski said.

Mayor Brandon Johnson, CPS CEO Pedro Martinez and Chicago Teachers Union President Stacy Davis Gates have all vowed to appeal to Springfield lawmakers to help close the gap and avoid cuts next year.