Chicago Public Schools FY2024 Proposed Budget: Analysis and Recommendations

school bus

June 27, 2023

Click here to read the full report.
Click here to read the press release for this analysis.


The Civic Federation continues to have significant reservations about the long-term viability of the District's finances. The CPS budget of $9.8 billion for the coming year is stable due to a combination of federal COVID-19 relief funds and local tax sources, including a property tax increase to the maximum allowed under the state tax cap law. However, CPS faces a fiscal cliff of $628 million beginning in FY2026 after federal relief funds are spent. With no guarantee that State or local revenues will be able to keep up with rising expenditures, and no long-term plan in place, the Civic Federation has substantial concerns about how the District will handle a budget shortfall without further straining property taxpayers or reversing the fiscal progress made in recent years.

With a new Mayoral administration in office, and an elected school board set to be phased in beginning in just a year and a half, now is a critical time for Chicago Public Schools to plan for its financial future. The current Chicago Public Schools leadership and Board of Education should use this opportunity to work in partnership with the City of Chicago on a long-term financial plan. The plan must include a resolution of the financial entanglements between the City and CPS, and proposed solutions for solving the massive looming budget gap.

The Civic Federation recognizes that CPS and many other school districts across the State of Illinois cannot sustainably solve the impending financial cliff on their own. The State of Illinois will likely need to play an even more significant role in supporting Illinois’ school districts. Even with the Evidence-Based Funding formula and additional infusions of $350 million annually, Chicago Public Schools is still only funded at 75% of adequacy based on the formula, and a majority of other school districts around the State are also under 80% of their targets.1

At the same time that school districts are anticipating financial shortfalls, so are other agencies that provide critical government services, including public transit. The demand for funding from the State from multiple local government agencies at the same time could result in competition for the same revenue sources by multiple agencies. Making the case for an infusion of State support for schools would be much stronger coming from school districts together in partnership. The Civic Federation urges Chicago Public Schools to work with other districts and the Illinois State Board of Education on arriving at a comprehensive statewide funding solution that also includes increased efficiency and spending reductions where possible.

Despite the Federation’s concerns, there are some positive aspects of CPS’ financial situation. We are encouraged by the recent credit rating upgrade from S&P. The District continues to rebuild its general operating reserves. Increases in State funding to CPS through the evidence-based funding formula and the normal cost contribution to teacher pensions, as well as the dedicated property tax levy for pensions, have provided the District with much needed ongoing annual revenue sources.

But much more needs to be done to put CPS on a path to true financial sustainability. Declining enrollment, underfunded teachers’ pensions, continued reliance on short-term borrowing and imbalances in the District’s capital footprint continue to strain the budget. Property taxpayers are shouldering a significant burden, and the District continues to take the maximum property tax increases. The District needs to establish long-term stability through a combination of solutions that should involve both State support and local control, including improving efficiency and cutting costs where possible.

The Civic Federation offers the following key findings from Chicago Public Schools’ FY2024 Proposed Budget:

  • The FY2024 proposed total spending plan for all funds is $9.8 billion, which is an increase of $462.5 million, or 4.7%, from the FY2023 adopted budget of $9.3 billion;
  • Proposed FY2024 general operating appropriations of $8.5 billion are an increase of $495.7 million, or 6.2% above the FY2023 operating budget of $8.0 billion;
  • Projected capital expenditures of $500 million represent a decrease of $49.3 million, or 9% from the prior year. The District plans to approve $155 million in new appropriations for capital projects in FY2024;
  • The debt service budget of $785.5 million is an increase of $16.1 million, or 2.0%, from the FY2023 adopted budget;
  • Property tax revenue is projected to increase by $130.7 million, or 3.5%, over the prior year to $3.8 billion in FY2024;
  • CPS is budgeting for a total of 45,159 full-time equivalent (FTE) positions in FY2024, which is an increase of 1,782 positions, or 4.1% from the prior year. Since FY2020, personnel has increased by 18.7%, or 7,122 positions;
  • Salary expenses of $3.5 billion in FY2024 are an increase of $234.5 million, or 7.1%, from the FY2023 adopted budget. Benefit expenses are expected to be approximately $2.1 billion in FY2024, an increase of $242.1 million, or 12.9% from the prior year;
  • Student enrollment has declined by 78,564, or 19.6% over the past decade from 400,545 students in FY2014 to 321,981 in FY2023. Over this ten-year period, preschool enrollment decreased by 30.7%, K-8 enrollment declined by 23.2%, and high school enrollment declined by 8.7%. The total enrollment decline in FY2023 from the prior year was 2.6%;
  • The District’s long-term debt increased by 28.2% in the ten years from FY2013 through FY2022, rising from $6.1 billion to $7.8 billion in long-term debt (principal only) outstanding as of June 30, 2022;
  • The total required employer pension contribution to the Chicago Teachers’ Pension Fund in FY2024 is approximately $1 billion. CPS is required to contribute $699.8 million of this amount. The State of Illinois will cover $322.7 million of the contribution, including $308.1 million to cover the normal cost and retiree healthcare plus an additional statutorily required contribution of $14.6 million. Approximately $557 million of the CPS contribution will be covered by the dedicated property tax levy for teachers’ pensions;
  • The Chicago Teachers’ Pension Fund was 46.8% funded on an actuarial basis as of June 30, 2022, compared to 49.7% funded 10 years prior. The Pension Fund had an Unfunded Actuarial Accrued Liability of $13.8 billion as of June 30, 2022, compared to $9.6 billion 10 years prior;
  • CPS received a credit rating upgrade from S&P in March 2023 to BB+ with a stable outlook. The upgrade was based on the District’s improved liquidity position, strong cash reserves and reduced reliance on short-term borrowing; and 
  • The District plans to release a Facilities Master Capital Plan later this fiscal year.

The Civic Federation has concerns about the following aspects of the CPS FY2024 Proposed Budget and financial situation:

  • Increasing the District’s property tax levy to the maximum amount allowed under the Property Tax Extension Limitation Law;
  • Sustainability of increased spending levels after federal COVID-19 relief funds are expended;
  • Increased required Chicago Teachers’ Pension Fund pension contributions due to recent investment losses; and
  • Financial entanglements with the City of Chicago still need to be resolved.

The Civic Federation makes the following recommendations to Chicago Public Schools and the Chicago Board of Education:

  • Chicago Public Schools should collaborate with suburban and downstate school districts and the State of Illinois on a comprehensive solution to an impending federal funding cliff;
  • Prepare for implementation of the elected school board by addressing outstanding financial entanglements with the City of Chicago;
  • Consolidate the Chicago Teachers’ Pension Fund with the Teachers’ Retirement System in order to equalize state pension funding for teachers;
  • Provide more time between budget release, public hearings and board approval;
  • Resume holding Finance Committee meetings on a regular basis;
  • Include expenditures and personnel sections in the budget book; and
  • Include actual revenues in the budget book.

Click here to read the full report.
Click here to read the press release for this analysis.

[1] Advance Illinois, Investing in Illinois’ Students: Illinois’ Evidence-Based Funding, 2017-2022.