August 25, 2020
In a report released today, the Civic Federation expressed support for the Chicago Public Schools $8.4 billion proposed FY2021 budget while outlining a number of concerns about the durability of the proposal. The full report is available here.
“Given the significant financial challenges facing nearly all state and local governments right now, CPS has presented a reasonable spending plan for the next fiscal year,” said Civic Federation President Laurence Msall. “However, the uncertainty of relied-upon federal funding, among other contingencies, means that the District must publicly present a comprehensive Plan B so that parents, staff and the public know what to expect if any of the proposal’s elements does not fall into place.”
The Federation commends CPS for its candor about the stresses on its budget, along with the Board’s quick movement to avoid a lapse in meetings and important decision-making during this critical time.
As detailed in the analysis, the proposed budget relies on $343 million in federal revenue not yet approved by Congress. CPS received $206 million in federal funding through the federal CARES Act, but negotiations regarding additional federal funds proposed in Congress, including the HEROES Act passed in the U.S. House and the HEALS Act introduced in the U.S. Senate, have stalled.
Without more federal funding, CPS will have a large budget hole to fill. While CPS says it has identified ways it would close the budget gap if the federal funding does not materialize, such as using reserves or making budget cuts, details have not been made public.
Compounding the District’s revenue challenges this year, the State of Illinois’ FY2021 budget held flat appropriations for all elementary and secondary schools, meaning CPS did not get an anticipated $60-65 million increase in State funding. The District additionally acknowledges several risks associated with local property tax revenues as a result of economic declines related to COVID-19. At the same time, personnel and other costs continue to increase amid ongoing declines in student enrollment.
“Despite considerable financial, educational and transparency gains over the last several years, CPS finds itself in a tough spot largely outside of its control,” said Msall. “While the Federation recognizes this reality, the District does have the wherewithal—and responsibility—to explore other paths forward and to justify those paths to Chicago taxpayers.”
In addition to a number of planning-related recommendations, the Federation encourages the Board of Education to work with Illinois’ federal delegation to encourage the U.S. government to authorize additional assistance for school districts and all state and local governments. The federal government is the only entity that can take adequate action to help struggling local governments weather the current economic storm.
The Federation further recommends that CPS explore consolidation of its pension fund with the downstate and suburban Teachers’ Retirement System and work to eliminate any remaining costly pension pickups, both of which would go a long way toward providing some stability to the pension fund.