It’s time to force CPS to balance its budget in a way that ensures the bulk of the $30K spent per student reaches schools while weaning itself from city subsidies
Let’s be clear: Chicago Public Schools (CPS) has no business expecting the city to cover the district’s $175 million payment for the employer contribution to non-teaching employees’ pensions. These employees are not city workers. At the same time, the city should not force the district to take out a loan to make that payment. Chicago has become a cash cow for a school district whose leadership refuses to operate within its means.
Mayor Lori Lightfoot’s administration significantly increased the annual tax-increment financing (TIF) surplus, not only to provide the city more funds but also to help pay for the CTU contract and give CPS the money to help phase out the city’s pension payments on behalf of the schools. Between 2019 and 2025, the city allocated $1.3 billion for this purpose. In 2025 alone, the allocation will reach a record $298 million. The district should draw on these funds to make the pension payment.
While Chicago struggles with a deficit that will likely exceed $1 billion next year, it continues to furnish schools with a subsidy of nearly $1 billion annually in addition to receiving 56 percent of all property taxes. This encompasses a dedicated property tax levy to cover the employer's share of teacher retirement contribution, debt service on school capital improvement bonds in schools, and over half the annual TIF property tax surplus.
Things are about to get worse. To be precise, the CTU contract demands were never really about how to improve schools or student proficiency. It was always about the CTU’s demand for higher pay, more benefits, more members, less instructional time, less accountability, and less competition from charter schools. The union will gain in each of these areas while saddling taxpayers with an enormous bill. The new contract is likely to cost twice as much as the previous record setting contract negotiated in 2019.
Despite both Mayor Brandon Johnson and the CTU’s expectation for a massive bailout, Governor JB Pritzker has no intention to come to CPS’ financial rescue. Illinois spends between 16 percent and 60 percent more over pupil than neighboring states and Chicago spends an average of $5,000 more than the state. Pritzker criticized the district for having used one-time COVID money to add over 9,000 new budgeted positions during COVID despite school campuses being closed for 78 weeks and the district losing nine percent of its enrollment.
Providing CPS with an additional $1.1 billion in state aid — the district and union continue to claim it is being shortchanged — would require Pritzker to turn over $4.4 billion to school funding statewide. City leaders would have a better chance at receiving more state funds by making pension funding equity for Chicago teachers a top legislative priority. Currently, the state covers 98 percent of downstate teachers’ contributions, but only 32 percent for Chicago. Pension equity would free up almost $600 million. It would not require the state provide more money for the other school districts.
Today, Chicago’s schools are consuming an ever-larger share of the city’s tax revenues. Mayor Johnson and the City Council should not only draw funding from the district’s share of the TIF property tax surplus to make its own employees' contribution but also force the school district to balance its own budget while weaning itself from city subsidies. With the district spending $30,000 per student, and only 54 percent of funding going to local schools, there is a real opportunity to accomplish this goal.
A Wirepoints analysis suggests that only half of CPS’s $10 billion budget finds its way into schools. School funding has grown by an astonishing 40 percent per pupil since 2019 and the district has added over 9,000 additional full-time staff, bringing the staffing ratio to one employee for every 7.6 students. There’s an opportunity to balance the district’s budget while weaning schools off city’s $1 billion in annual subsidies, which could then be redirected to meet the city’s own financial needs. There is a clear pathway to reverse the CPS' financial plight.
The first and most important step would be to tie any new contract to available revenues. The last contract raised Chicago Teachers Union member salaries and added thousands of staff members, so a pause is justified to align spending with revenue.
Second, to make certain school funding flows directly to students, it is vital to decentralize the school district and dismantle CPS’ central and regional offices. There are over 7,500 school staff positions not assigned to individual schools.
Third, the CPS must return to pre-COVID, non-teaching staffing levels and give principals and elected Local School Councils full autonomy over their school budgets. These positions are valued at over $600 million and would still leave the district with a ratio of one staff person for every 8.5 students.
Fourth, $100 million could be saved if CPS consolidated and repurposed dozens of near-empty schools. Vacant or underused school buildings could be leased to any of the district’s over 100 public charters — over 90 percent of which are not in public school buildings — generating comparable revenue.
Fifth, by expanding the number of charter schools, increasing magnet schools, and school-based magnet programs, the CPS could retain and attract more students. Enrollment growth would result in more state and federal aid.
Last, empower communities and parents through elected Local School Councils and their principals to control their budgets and staffing models and to select more effective proven school models. This would make the schools more attractive, helping to attract and retain students.
The CPS does not suffer from a revenue problem. CPS suffers from a spending problem. Unfortunately, school district leaders have long collaborated with the Chicago Teachers Union (CTU) to preserve the status quo. The administration seeks to sustain its resource consuming bureaucracy and maintain control over local school resources. CTU leaders need the central administration to enforce its contract which increases its numbers and members' pay and benefits while limiting accountability and protecting the unions education monopoly.
It is time for Governor Pritzker to intervene and revive the Chicago School Finance Authority (SFA), similar to the one established in 1980 to exercise financial control over and furnish financial guidance to CPS. In its 30-year existence, the SFA kept the district from financial collapse. The goal of the SFA should be not only to secure budgets and employee contracts that ensure the financial basis for continued and effective operations of schools but also to wean the district from the massive city subsidies that are undermining Chicago's ability to provide critical services and protect taxpayers.
