Chicago Public Schools Teeter on Fiscal Precipice

The Chicago Public Schools instituted a sudden, early February, unpaid four-day teacher furlough to save $35 million, along with a $46 million spending freeze on school discretionary funds that pay for textbook purchases, after-school programs, field trips, and hourly aides. But, at the end of last week after massive protests, the school district restored $15 million, when it became apparent that the city’s poorest schools had experienced the deepest cuts.

Lauren Fitzpatrick of the Sun-Times reports: “Money was given back to 434 schools that qualify for federal Title I money for low income children….”  “The Sun-Times found that schools where three of four children are low-income generally had their discretionary funds cut at twice the rate as schools where one in four children were low-income. The newspaper also found that majority Hispanic schools saw freezes that were twice as large as majority white schools.”

Juan Perez of the Chicago Tribune explains why schools serving the poorest Hispanic and African American students were unfairly penalized by the budget freeze: “CPS originally determined the amount of money schools had to cut in the spending freeze by looking at the money each building held in three accounts: funds received from the district on a per-pupil basis; supplemental state aid meant to help educate low-income students; and federal grant funds. These state and federal dollars aren’t meant to be used on general operating costs, but are intended to keep class sizes low and support learning programs in schools that have a higher number of low-income and minority students…  If poorer schools or buildings with large numbers of English-language learners had not yet spent their state and federal aid, those schools had more money to cut and were then in many cases hit hardest by the spending freeze.”

The problem is that nobody knows where the money to cover the restoration of the funds is going to come from. Restoring $15 million to the poorest schools will add to the district’s projected budget gap, bringing the total shortfall to $129 million. The school district will struggle to borrow because its credit rating has fallen to junk status. For all these reasons, earlier this month the Chicago Public Schools sued the state of Illinois, “accusing the state of employing ‘separate and unequal systems of funding for public education in Illinois.’ Chicago Public Schools officials describe the legal move as the ‘last stand’ for a cash strapped district that’s ‘on the brink.’”

Yesterday afternoon, Forrest Claypool, the school district’s Chief Executive Officer, announced that unless the state of Illinois supports the district with additional funding, the school year for students will end on June 1st— nearly three weeks early. DNA Info quotes Claypool:  “This is the worst-case scenario… We have very few good options left.”

A big part of the problem is Illinois’ school funding, and a years’ long pension crisis. Perez notes that this year’s CPS budget was based on a promised $215 million from the state for teacher pensions. However, Governor Bruce Rauner vetoed the pension deal.  And  negotiations continue in Springfield to  get a state budget passed and to fix the state’s school funding.  John O’Connor of the Associated Press reminds us that, “Illinois has been without a budget since July 2015, two months after Rauner took office, the nation’s longest state budget stalemate in nearly a century.”  O’Connor adds: “Even without an annual spending plan, state government continues to operate largely because of court orders and intermittent appropriations by lawmakers.  But the picture is bleak.  Without action, Illinois will have a $5.3 billion deficit when the current fiscal year ends June 30. There is a backlog of $11 billion in overdue bills. State pension programs are $130 billion short of what they need to pay promised benefits to retired and current employees.”

In a new report for the Education Law Center and Rutgers Graduate School of Education, America’s Most Fiscally Disadvantaged School Districts, school funding expert Bruce Baker highlights the funding crisis for Chicago’s schools: “This report identifies the most fiscally disadvantaged school districts in the country—those with higher than average student needs in their labor-market location and lower than average resources when state and local revenues are combined… The city of Chicago is, year after year, one of the most fiscally disadvantaged large urban districts in the nation.  Illinois has a highly regressive school funding system.”

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One thought on “Chicago Public Schools Teeter on Fiscal Precipice

  1. There is much gnashing of teeth and wailing about the woeful funding for schools and other state responsibilities for program funding. Yet, Illinois has a relatively low state income tax rate, 3%, across the board; it’s not progressive. It’s a stare-down; those who want to raise the state income tax rate and make it progressive face a loud NO from those who claim that property taxes are already too high! Our Republican governor has no experience in governing, and his hedge-fund manager background doesn’t scare Mike Madigan, the power in state government, one iota. So, here we sit in misery in the Land of Lincoln, and, as always, it’s the poor who are hit and hurt first and worst, especially the children in the inner cities. Mr. Lincoln is probably spinning in his tomb at Oak Ridge Cemetery in Springfield.

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