Vallas: City budget passes, next fiscal crisis looms

Now that Chicago Mayor Brandon Johnson has passed his first budget, attention should be on the Chicago Public Schools. School leaders claim it will have a budget hole of over $600 million by 2025.

The Chicago City Council passed its first budget under Mayor Brandon Johnson. It comes after barely two weeks of public hearings, with insufficient information and with little capacity to analyze the revenue and spending.

A quick overview of the budget finds it is not structurally balanced, does not address the city’s worsening financial situation, makes little investment in the city’s poorest neighborhoods and makes no commitment to fill 1,000 police vacancies. It likely worsens the police shortage by appearing to covert almost 400 police vacancies into civilian positions – although as many as 100 may be filled by retired officers.

The most important priorities in the mayor’s budget are clear.

First is to support a “sanctuary city” policy that places no limits on the number of migrants and extends to them the benefits available to existing city residents. The budget will appropriate another $150 million to this crisis, half of what the city estimates it will need. The mayor’s former City Council floor leader, Carlos Ramirez-Rosa, also refused to rule out a property tax increase as a potential source of emergency funding.

The other clear winner in this budget is the Chicago Teachers Union’s school district, which will receive a $226 million tax increment financing surplus and will see the city pick up $45 million in school district pension contributions for non-teaching employees who are in the municipal employees retirement system. The schools and other taxing districts lose no revenue from tax increment financing property tax diversions because their taxes rise to meet their property tax levy request. This means the tax increment financing surplus is a huge windfall.

Contrast the $271 million in spending for the CTU and $150 million in new spending for migrants with the paltry $26 million in new investments. As far as Johnson’s budget is concerned, his so-called “Invest in People” progressive agenda amounts to the opening of two new mental health centers and adding four employees to those currently dedicated to environmental issues to “restore” the city’s Department of the Environment. That’s it.

Another budget crisis looms

The city’s other pending budget crisis is with Chicago Public Schools, which leaders claim will have a budget hole of over $600 million by 2025. With federal pandemic relief running out, district leaders claim they need an additional $1.4 billion annually for operations to meet the city’s education needs and $14.6 billion to address the district’s capital needs. This comes despite declining enrollment and one-third of its buildings being half empty.

The CTU insisted in a recent post that the district will also require $30 billion to fund a plan that, according to them, addresses “racial justice and districtwide educational and programmatic needs.” They said the district is “focused on building out additions and expanding selective enrollment schools, while ignoring the systemic needs of struggling severely under-enrolled South and West Side schools.”

CTU President Stacy Davis Gates repeats tired rhetoric, claiming the driving force behind the negotiations is “inequity and injustice that Black and Brown students and their families experience in this city.” Meanwhile, full-time CTU positions have increased by 18.7% in the past three years, with 45,159 full-time positions budgeted for 2024 despite an 11% drop in enrollment since 2019. The district has one full-time employee for every seven students.

The CTU seems to believe it’s impossible to improve student outcomes unless the entire city’s treasury is funneled into the schools. If the mayor’s early actions are any indication, he is willing to unilaterally provide the CTU whatever financial asks they make. Already that’s included expanded family leave, making COVID sick days permanent, picking up pensions for non-teachers and giving the district $271 million in tax increment financing windfalls from the city budget.

The harsh reality is results at CPS, even before COVID-19, have not improved despite spending about $30,000 per student – a staggering amount. In the 2023 standardized tests, only 26% of all students met or exceeded reading standards, and a mere 17.5% of students passed math. The CTU-dominated school district’s response? Work overtime to eliminate competition by killing the state’s tiny “Invest in Kids” school choice program and capping the number of public charter schools and their enrollment.

The unions are determined to destroy charters altogether by forcing the district to limit their renewal period to 2-3 years, which will severely limit their ability to recruit teachers, keep students and finance building improvements. Meanwhile, with limited competition, the district under CTU pressure returns to the soft bigotry of low expectations by abandoning standards and accountability for students, schools and teachers, all while clamoring for more funding.

Expect Chicago to keep funneling funds to disastrous results in the new year.