Fiscal Year 2018 Budget

How to use this site

Users will be able to find documents and use interactive tools to help them better understand the proposed CPS budget for fiscal year 2018. The interactive features allow users to easily click through the budget, drilling into specific budget line details or staying at a high level overview of the District.

Users can view a number of areas of the budget including revenue and debt while also looking at every CPS school and department. Each interactive report generates graphs and charts which will make budget comparisons visual and easier to understand.

Check out our Reader's Guide for more information.

Download your own copy of the FY18 Proposed Budget Book.

Download your own copy of the FY18 Approved Budget Book.

We want to hear from you! Please provide feedback and ask questions by contacting us.

CPS received the GFOA Distinguished Budget Presentation Award for our FY2016 online budget site.


Organization Chart

Fund Balance Statement

Maintaining a baseline level of fund balance, or financial reserve, enhances financial stability for any individual or organization. Just as individuals keep a balance in their checking accounts in case of emergencies, Chicago Public Schools (CPS) seeks to maintain a baseline amount of funds within its operating account to ensure smooth day-to-day operations. Additionally, financial reserves provide a cushion for year-to-year fluctuations in financial performance. Just like individuals experiencing financial challenges cannot maintain a checking account balance, CPS’s financial challenges have meant that CPS is unable to maintain a fund balance.

CPS adopted its Fund Balance and Budget Management policy1 in August 2008. The goals of this policy are to maintain adequate fund balances in the various funds to provide sufficient cash flow for daily financial needs, to offset significant economic downturns or revenue shortfalls, to provide funds for unforeseen expenditures related to emergencies, and to secure and maintain strong credit ratings. The definition of fund balances in this context is assets plus deferred outflows in excess of liabilities plus deferred inflows that can be spent in times of need.

While CPS acknowledges the importance of maintaining a minimum level of fund balance, it must balance this with advancing its core mission of ensuring that every child graduates college and career-ready, even in the face of declining state revenues and statutorily-required increasing pension payments. Importantly, the majority of the negative fund balance in both Fiscal Year 2016 and Fiscal Year 2017 is due to lack of State funding. In Fiscal Year 2017, the Board experienced a $215 million shortfall in state funding for pensions as well as a delay of State block grant payments of approximately $331 million by June 30, 2017. This State funding shortfall totals nearly 10% of the Board’s operating revenues. CPS has managed through these shortfalls through a combination of mid-year budget cuts, internal management efficiencies and short-term borrowing against delayed revenue. This management has allowed the Board to materially reduce its structural deficits and to start making progress toward a more sustainable long-term financial position and fund balance. The Board will continue to seek structural revenue reform which will eventually allow the Board to return to a more positive fund balance position.

 

Use of Fund Balance

The FY18 budget only uses operating fund balance in restricted funds. These funds are restricted due to the requirement that fund balance be used for specific purposes. CPS is anticipating ending FY17 with a balance of zero in the Workers’ Compensation/Tort Fund, Supplemental General State Aid fund, and Special Revenues funds. CPS is anticipating ending FY17 with a $283 million in General Fund - Unassigned fund balance due to the slow pay of State revenues. To the extent that the payment of these State revenues returns to the historic norm, CPS will be able to return to a positive fund balance position. Additionally, debt service funds and capital funds are recorded separately and used for their own restricted purposes. These funds are described more fully in the capital and debt chapters.

 

Table 1: Estimated Use of Fund Balance in the Operating Funds (in millions)


Fund Balance by Type

FY16 Actual Balance

FY17 Estimated Sources (Uses)

FY17 Estimated End of Year Balance

FY18 Estimated Sources (Uses)

FY18 End of Year Balance

General Fund-- Unassigned

$(226.5)

$(417.9)

$(644.4)

$361.1

$(283.3)

Workers’ Comp/Tort Fund (adjusted for revenue recognition)

35.1

(35.1)

-

-

-

Supp’l General State Aid (SGSA)2

45.5

(31.1)

14.4

(14.4)

-

Other Special Revenue Funds

19.3

23.6

42.9

(42.9)

-

Total Operating Fund

$(126.6)

$(460.5)

$(587.1)

$303.8

$(283.3)

Total Operating Funds Assuming $305 Million Catch-up of Delayed State Funding

$608.3

$21.2

 

Fund Balance Targets

The fund balance targets established in the Fund Balance policy address the General Fund, Workers’ Compensation/Tort Fund, Supplemental General State Aid (SGSA) Fund, Debt Service funds, and Capital Projects funds. For the General Fund, the fund balance target is set between 5 and 10 percent of the total operating and debt service budgets. For the Workers’ Comp/Tort Fund, the fund balance target is between 1 and 2 percent of the operating budget. For SGSA, the fund balance target is the full fund balance from the prior year. For the debt service funds, the amount should be sufficient to cover potential risks, as determined by the Treasury Department. All capital projects funds are re-appropriated for capital projects.

Given these targets and the fund balance estimates above, Table 2 below summarizes the fund balance targets.

 

Table 2: Fund Balance Targets (in millions)

Fund Type

FY18 Fund Balance Target

General Fund

$317.1 (5%)

Workers’ Comp/Tort Fund

$63.4 (1%)

Supplemental General State Aid Fund

$0

Debt Service Stabilization Fund

Enough to cover risks

 

Once again, the General Fund and the Workers’ Comp/Tort Fund will not meet the fund balance targets at the end of FY18. CPS will ask the Board to extend the deadline to replenish the fund balance for FY18 and FY19 while it continues to seek a long-term solution to the pension inequity issue and reform state education funding.

As the District replaces its variable rate debt with fixed rate and after having fully exiting from swaps, the need for the Debt Service Stabilization Fund becomes minimal.

 

FY18 Plans for Replenishing the Fiscal Stabilization Fund

CPS will continue the following policies in FY18:

  • Encourage the state to enact SB1 to provide CPS with a fairer share of state education funding.
  • Closely monitor spending to achieve savings and efficiencies wherever possible and continue streamlining administrative expenses.

1 Board Report 08-0827-PO8

2 This fund balance must by statute be re-appropriated to the schools in the budget year where it was unspent in the current year.

Page Last Modified on Friday, August 11, 2017