Update November 21, 2016: The FY2017 amended budget increases appropriations for capital projects from $338M to an amount not to exceed $945M. This increase of up to $607M will be funded from proceeds of additional bonds. The actual amount of increased appropriation for capital projects will be reduced commensurate with the actual amount of bond proceeds received from the sale of the bonds.
Update November 16, 2016: We have amended the online budget to reflect $55 million in additional TIF revenues and $55 million in additional appropriation related to the pending CTU contract. The Board will vote on these changes December 7, 2016.
All other Budget items reflect the original Board approved FY2017 budget.
Dear Friends and Colleagues,
As we look forward to another upcoming school year, let us first recognize that this is an exciting time in the history of Chicago Public Schools (CPS).
Our students have again outpaced the academic growth of their national and state peers in both math and reading, while the average ACT score, freshmen-on-track to graduate rate, and graduation rate have reached the highest measures on record. There is no question that, because of the work our educators, school leaders, staff and partners do each day, that schools across the city are experiencing a strong momentum that will lead our children to academic achievement.
Just last year, however, our progress was threatened by a deficit in excess of $1.1 billion that peaked as a result of both soaring pension costs and a simultaneous reduction in funding, and we were forced to spend much of the year considering cuts that would have unquestionably devastated our school system.
Instead of buckling under this challenge, CPS families and educators joined together with community partners and elected leaders to put our students first. Their voices were heard loud and clear in Springfield, where lawmakers took steps to begin addressing the unequal funding approach that has for too long hurt school districts across the state. Through a tax increase on Chicago homeowners and several legislative measures, CPS will see more than $600 million in new revenue in FY17. While more work remains, most importantly, these legislative measures also lay the groundwork for continued action to address the inequity that hurts our classrooms and deprives our students of needed resources in the year ahead.
Coupled with our own reforms, as well as the participation of Chicago’s taxpayers, we're pleased to report that our District’s finances are more stable today than they have been in years.
We have worked aggressively over the past year to reduce administrative and Central Office spending by operating more efficiently. While many of these initiatives required sacrifice and unprecedented midyear adjustments from our staff, through a combination of cuts, furlough days, and benefit adjustments we were able to reduce our FY 16 budget by $147 million - helping us to spend $225 million less than budgeted. These savings will continue to be realized for the full year in FY 17, increasing our savings to $173 million.
Chicago residents, an integral part of our community, remain committed to supporting children and schools—the lifeblood of our city. For years, CPS has faced an agonizing choice between funding the pensions that our teachers have earned, or funding the classrooms where our students are doing better than they’ve ever done before. In FY16 alone, this meant putting $676 million into pensions – the equivalent of nearly 7,000 teacher salaries. Chicagoans will be directly funding teachers’ pensions with a property tax levy generating approximately $250 million in revenue to protect our teachers’ futures.
Thanks to these three factors – compromise in Springfield, CPS’ management reforms and efficiencies, and partnership from Chicago’s taxpayers – the cuts we once feared as inevitable were avoided. However, a balanced budget remains a priority for our administration, and work has continued to make that a reality for our District as we’ve closed the remaining $300 million budget gap for FY17.
To close the remaining $300 million budget gap this year, we are implementing continued management reforms, as well as the adoption of multiple strategies to centralize administrative burdens and maximize resources for our schools including:
- Using our economy of scale more than ever before to save tens of millions, centralizing and concentrating the District’s purchasing power to obtain lower prices from vendors;
- Centralizing certain responsibilities, and removing some financial and accounting administrative burdens from school-based staff;
- A series of efficiencies in scheduling and transportation, as well as capturing savings from unfilled vacancies; and
- More efficient use of federal revenues, including waivers that allow for more expenditures to be eligible for federal reimbursement, as well as increasing enrollment of students eligible for Medicaid.
These initiatives, many of which resulted from numerous strategy sessions with principals, ensure that we are aggressively pursuing strategies that benefit all of our students, while positioning CPS to be stronger and more stable for the future.
In addition, in FY17, CPS will be making much-needed investments in schools’ infrastructure and capital needs in the classroom. With this budget, the District is investing at least $338 million in needed capital improvements to schools, including repair, modernization and overcrowding relief in neighborhoods throughout the city. Later this fall, the District will continue working to secure funding for additional projects that will not only address overcrowding and deferred maintenance, but to also complete the District’s efforts to modernize schools’ online infrastructure, air conditioning projects and playlots for every child in the city. The District anticipates announcing this supplemental capital plan later this fall.
The future looks bright for CPS – our hard work is paying off and our students will continue to be set up for success. While we know we’re not out of the woods yet, we will continue to work with our elected leaders. We believe that our state’s leaders will live up to their commitments for FY17, and we remain steadfast in our resolve to build on this commitment to secure a long-term education funding solution in Springfield – a solution that, once and for all, will help eliminate a structural deficit due in part to the state being last in the nation in education funding and CPS being the only district in the state to face escalating pension costs.
Over the past year we have faced an unprecedented financial crisis, and have seen an unprecedented commitment from our staff, families, and larger community in response. While each decision has been challenging, we owe it to our students to continue our aggressive and disciplined approach to put our fiscal house in order this year, as we work to ensure a stable future for our city’s schools.
Chief Executive Officer
Chicago Public Schools
Janice K. Jackson, Ed.D.
Chief Education Officer
Chicago Public Schools