August 28, 2019
Concerns persist on enrollment declines, teachers’ pension fund and other pressures
(CHICAGO) — In a report released today, the Civic Federation announced its support for Chicago Public Schools’ proposed $7.7 billion FY2020 budget, but expressed ongoing concerns about the District’s long-term financial sustainability. The full report is available here.
As detailed in the analysis, CPS’ proposed budget demonstrates increased financial stability in the third year of Evidence-Based Funding (EBF) from the State of Illinois and fourth year of reinstatement of the teacher pension levy. While the District must close a $100 million budget deficit in FY2020, the gap has decreased dramatically from fiscal years 2014 through 2016, when it was approximately $1 billion annually.
The Federation supports the newly appointed Board of Education’s demonstrated commitment to increased transparency and public engagement. In line with a longtime Civic Federation recommendation, Board meetings are now livestreamed, which dramatically increases access for interested stakeholders. Board members have also begun engaging in more substantive discussion with members of the public and CPS staff at Board meetings.
“Chicago Public Schools continues to improve year over year in terms of financial stability, to the benefit of students, parents, teachers and the public at large,” said Civic Federation President Laurence Msall. “However, the downward trend in enrollment, uncertainty regarding labor negotiations and various other pressures bear careful watch as they could put the District’s hard-earned financial stability and educational gains in jeopardy.”
Additional challenges include the District’s dramatically underfunded teacher pensions, continued short-term borrowing to cover recurring cash-flow issues and increasing personnel and debt-service costs. Despite these pressures, the District has not presented a long-term financial plan outlining how they will be addressed.
“Without a transparent and comprehensive long-term plan, some level of public skepticism will linger,” said Msall. “This will become especially true if, as CPS has acknowledged is possible, the District’s EBF status ends up dropping from Tier I to Tier II in the next several years. If that happens, the District could lose out on future State funding increases.”
Along with a robust long-term financial plan, the Civic Federation recommends that CPS issue a comprehensive five-year Capital Improvement Plan that discloses more information about the project selection process and project updates each year. Currently the District’s capital plan contains neither.
The Federation further recommends that the District work to eliminate the pension pick-up for non-teacher union members of the City of Chicago’s Municipal Pension Fund and work with State of Illinois officials to consolidate the Chicago Teachers’ Pension Fund with the suburban and downstate Teachers’ Retirement System in order to achieve more equitable State pension funding.