FOR IMMEDIATE RELEASE:
Thursday, October 5, 2017
CPS Office of Communications
Thanks to legislators’ support for historic education funding reform, CPS released a proposal to amend the annual budget, incorporating $450 million in additional revenue. The new resources for the 2018 fiscal year move Chicago students toward equality with the state, put the district on stronger financial footing and prevent midyear budget cuts and furlough days.
“Legislators courageously fought for and won a historic victory for education funding reform that creates more stability in schools and will continue the trailblazing academic growth that has attracted the attention of top academic researchers and experts throughout the country,” said CPS CEO Forrest Claypool. “Thanks to lawmakers’ efforts and significant management reforms, CPS is putting the cloud of uncertainty behind us. Chicago students will directly and immediately benefit from legislators’ victory, in the form of lower interest rates and the ability to refinance high cost debt.”
$450 Million in New Revenue in Proposed FY18 Revised Budget
After decades of work and several years of concerted advocacy during CPS’ 20-for-20 campaign, Illinois established a new education funding system that takes a major step toward ending funding inequity for low-income and minority school districts. As a result of the historic funding reform, CPS is proposing an update to its FY18 budget to account for a total of $450 million in additional revenue this year, which will come largely from a more equitable funding formula and an increased property tax levy dedicated to teacher pensions.
Specifically, the initial FY18 budget included $269 million in local resources to address the district’s budget gap. As a result of both the new funding law and management efficiencies taken by CPS, the district now requires significantly fewer resources from the city and will fully resolve the budget gap through the following steps:
- $130 million increase to CPS’ property tax levy for Chicago teachers’ pensions
- $80 million in City of Chicago funding for school security and student safety costs
- $55 million in debt refunding savings and purchasing savings
- $4 million in additional state aid above the amount assumed in the original budget
These measures not only allowed CPS to eliminate the district’s budget gap, but they also provided CPS with the resources needed to prevent $35 million in enrollment-related budget cuts by holding district-managed schools harmless if their 10th day enrollment numbers did not reach projections set prior to the school year.
Legally Mandated Charter Funding Changes
In addition to providing the district with $450 million in new revenue, the education funding law also revised the requirements for funding charter schools. Prior to the new funding law, school districts in Illinois were required to fund charter schools between 75 and 125 percent of each district’s per capita tuition charge (PCTC). This allowed districts like CPS that use per-student funding models the necessary flexibility to ensure that schools are funded equitably based on the number of students that attend a school and the specific needs of those students.
While the district believes a student-based budgeting funding model is the most effective way to maintain funding parity between schools, CPS is working within the confines of the new law to consolidate — and, in some cases, eliminate — previous charter funding streams to best ensure equity across the district.
As part of the new state funding law, the charter tuition requirement was altered and districts were required to set the charter funding rate between 97 and 103 percent of PCTC. This change was initially projected by outside groups to result in $100 million in new funding for CPS charter schools. After careful review of the law and existing funding streams, CPS determined that significantly less new funding (approximately $37 million) is required to comply with the law.
CPS is helping to maintain the funding balance between charter and neighborhood schools by replacing the various charter funding streams that have been in place (SBB tuition, non-SBB tuition, facility supplements, reimbursements for special education teachers, etc.) with a new PCTC-based charter tuition payment, as required by law.
CPS will be hosting budget hearings on Tuesday, Oct. 10, at 12 p.m. and 2 p.m. to allow members of the public an opportunity to provide feedback on the revised budget. CPS will also host a Truth in Taxation hearing on Oct. 10 at 10:30 a.m. to allow feedback on the pension levy authorized through the new education funding law.
The Board of Education is expected to vote on the amended budget proposal at its Oct. 25 meeting. In addition, because of an expected smaller agenda around the holiday season, the Board will consolidate its November and December Board meetings into one meeting, on Dec. 6, 2017.
Chicago Public Schools serves 381,000 students in 652 schools. It is the nation’s third-largest school district.
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