Dear Friends and Colleagues,
Chicago Public Schools (CPS) has made great strides in the last few years. Attendance and graduation rates have risen, students are performing better on standardized tests, and more students than ever are enrolling in college. None of this would be possible without the hard work of our students, teachers, principals and parents.
The progress we have made and hope to build on is threatened by the fiscal challenges facing our schools. As I am sure you are aware, CPS is facing a budgetary crisis due to declining state funding and exploding pension costs. These factors have cost the district more than $1 billion over the last two years and another $700 million this year. While Springfield pays pension costs for every other district in the state, CPS pays these massive pension obligations using funds that would otherwise go toward resources for the classroom. In the coming fiscal year, other districts will receive $2,266 per student in pension support from Springfield, while Chicago will receive only $31 per student. This is unfair, both to our students and our city’s taxpayers.
Today we have put forth a budget that is far from ideal, but reflects our financial reality. The CPS budget for the coming year includes $200 million in painful cuts we announced earlier this summer. While we anticipate streamlining the Central Office even further in coming months, we cannot balance our budget through additional cuts alone.
This budget also relies on TIF surplus funds and property taxes that will be raised to the cap. In addition, we plan to restructure approximately $255 million of debt, which will limit classroom cuts this year, but cost future generations. Debt restructuring at this scale is not a sustainable solution, but it is one of the few options available as we work to prevent cuts that would limit our ability to build on our progress.
Even with these cuts and debt restructuring, we will still need $500 million in pension funding equity in order to close our $1.1 billion operating deficit this year. Without these funds, we will be forced to make up the difference through additional cuts and unsustainable borrowing later in the year, which could impact teacher positions and lead to unacceptably large class sizes.
We have done our best to shield our students from our budgetary crisis, but cuts of this magnitude and borrowing in this manner will mean fewer resources for our classrooms this year and in the years to come. We must reach a comprehensive budget solution with our partners in Springfield to continue making progress in Chicago’s classrooms.
For the first time, in recent days, the Governor, Senate President, House Speaker, and others have agreed that our funding system is inequitable and must be changed. They recognize that a comprehensive solution is necessary to address our District’s long-term fiscal needs. We will build on that consensus and continue to work closely with Springfield, the Chicago Teachers Union and other partners on a deal that will provide pension funding parity and fully fund education in Illinois so that we can all invest in classrooms and schools. Our students, parents, teachers, principals and taxpayers deserve nothing less.
Chief Executive Officer
Chicago Public Schools