FOR IMMEDIATE RELEASE:
Wednesday, August 26,2015
For more information, contact:
CPS Office of Communications
The Chicago Board of Education voted today to approve the proposed Fiscal Year 2016 (FY16) Chicago Public Schools (CPS) budget, which preserves as much classroom funding as possible while reducing expenses in the District’s control. The budget includes $200 million in painful cuts and relies on support from leaders in Springfield to bring stability to CPS’s financial situation by ending pension inequity.
Since 2011, CPS has reduced total spending across the board by nearly $1 billion, making cuts to central office and maximizing efficiencies wherever possible. This budget reduces all spending within the District’s control, with operating, capital and debt spending are all down over last year, however, action from Springfield is required for CPS to a sustainable financial future.
“There is no question that the budget approved today is not the budget we want for our schools this year, but it does reflect the District’s extremely challenging financial situation in the absence of pension reform and sufficient state education funding,” said CPS CEO Forrest Claypool. “We are pleased leaders in Springfield have acknowledged our structural deficit must be addressed, and we will continue working diligently with our partners to ensure a solution is reached that brings CPS the resources it needs to provide every one of its students with a high-quality education at the school of their choice.”
Entering FY16, the District has a $1.1 billion structural deficit, which is largely driven by a state-mandated $676 million pension contribution. Unlike all other school districts in Illinois, CPS must pay for its own teacher pensions, while Chicago taxpayers also pay into the pension plan for teachers outside of CPS. The end result of this broken system is that other districts receive $2,266 per pupil in pension funding from the state while CPS receives just $31. This places a severe pension burden on CPS, and it has forced the District to cut critical resources in order to meet its pension obligation.
The FY16 Budget incorporates reductions on all costs within CPS’s control. The FY16 operating budget is $5,691.8 million -- a decrease of $64.4 million from the FY15 budget. The FY16 budget also includes a decreased capital budget, which reduces spending from $456.9 million in FY 15 to $177.6 million in FY16, and reduced debt spending, which falls from $603.8 million in FY15 to $538.6 million in FY16.
When CPS released its proposed FY16 budget earlier this month, the District presented a plan that relies on partnership from Springfield to help stabilize District finances by reforming a broken pension system and addressing declining state education funding. If Springfield doesn’t reach a resolution during this legislative session to address these crucial issues, CPS will be forced to close the $500 million gap in its budget through a mix of additional cuts and additional unsustainable borrowing.
In addition to relying on $500 million from a comprehensive budget solution, the District’s budget includes approximately $255 million in “scoop and toss” borrowing that prevents devastating cuts to the classroom and allows school to open on schedule, but at the cost of higher interest rates in the future. The FY16 budget also incorporates a combination of TIF surplus funds and an increase in property taxes to the cap.
The FY16 budget includes a significantly reduced capital budget compared to prior years, allocating $178 million for repairs, improvements and modernization. The funded capital projects are limited to previously announced projects and emergency maintenance and repairs that immediately impact student safety and comfort.
Despite the District’s $1.1 billion budget deficit, CPS has taken significant efforts to ensure as much funding as possible reaches classrooms. Approximately 96 percent of the District’s FY16 budget is being directed to schools to ensure students have the tools, resources and supports they need for college, career and life. The District has also been able to maintain the crucial student-based budgeting rate, in which dollars follow students regardless of which CPS school they attend. However, because money is tied to students, declines in enrollment have translated into lower budgets at many schools, and the District also cannot afford to hold schools harmless that do not meet enrollment projections.
For additional information on the FY16 Budget, please visit www.cps.edu/budget