Vallas: What to know about Chicago Public Schools budget

Chicago Public Schools just passed a $9.9 billion budget that spends nearly $30,000 per student. Despite receiving most city property taxes, boosted state funding and about 40% of federal aid, the new teachers contract will put the budget in the red.

The Chicago Board of Education just approved its 2024-2025 budget, but the Chicago Teachers Union and their former lobbyist, Mayor Brandon Johnson, are already decrying it.

CTU President Stacy Davis Gates is even attacking Gov. J.B. Pritzker for refusing to bail out the school district.

This massive budget spends almost $10 billion – the equivalent of about $30,000 per student – all while adding 800 new employees, including 500 additional teachers. Even after accounting for eliminated positions and unfilled vacancies, the district will certainly have more staff than it had last year when it had 45,159 total positions. Once the next CTU contract and its demands for new staff is approved, the payroll will again explode.

The district deficit is expected to exceed $800 million if the next CTU contract keeps annual salary increases to 5%, yet CTU is demanding even more. Chalkbeat projects the deficit at a staggering $933 million if teachers and principals are awarded a modest 4% annual salary increase and the district picks up the $175 million payment to cover the pensions of school district non-teaching staff.

With the CTU demanding 9% compounding salary increases, new contract demands exceed at least $10 billion over four years. The current contract was already the most expensive contract in CPS history and increased CTU member salaries between 24% to 50%, including 33% for teachers, while also mandating a surge in district staff.

Between 2020-2024 the district saw a 21% increase in funding and an 18.7% increase in school staff – despite a 7.4% decline in students. Last year there was one employee for every 7.5 students and one teacher for every 15 students. The district also suffered 11 years of shrinking enrollment during the 11 previous years.

CPS’ share of total property tax revenues raised by local governments in Chicago has risen from 45% in 1990 to 56% in 2022, according to the Civic Federation. The district’s budget also consumes 25% of all state K-12 funding and 40% of all federal funding.

While Johnson, the CTU and the school board claim the state is underfunding the district by $1.1 billion annually, CPS ranks second among large urban school districts in funding per pupil. Davis Gates has attacked Pritzker personally for his failure to bail out the school system, but Illinois already spends 19-64% more per pupil than neighboring states. Providing Chicago another $1.1 billion would require the state to add another $4.4 billion in school funding statewide, which is just not going to happen.

Pritzker is not sympathetic to the district’s request for the additional funding, pointing out the district squandered $2.8 billion in federal COVID money – the equivalent to almost $8,000 per student enrolled in 2020. Analysis from the nonprofit Kids First Chicago found the city used these funds to create 9,000 new positions since 2019, and increase central office staff by 60%. Too much of the pandemic money was used for general operations instead of one-time costs.

It is ironic given Illinois’ own spotty record on using federal COVID money for ongoing general operations and to support the largest state budgets in history. In the end, this decision cost state taxpayers over $1.1 billion in tax hikes when the state eventually exhausted the federal relief funds.

Similarly, Chicagoans may need to brace for higher property taxes, increased city subsidies and possibly more borrowing to pay for the new contract. That’s been the historic pattern in dealing with school financial crises. Everyone has suffered as a result.

According to the Civic Federation, between 1991 and 2024, property taxes received by CPS soared from $842 million to $3.87 billion, or 359%. CPS’ share of property taxes rose from 45% in 1990 to 56%. Still, the city’s annual subsidies exceed $800 million, including the special dedicated teacher pension levy.

To protect Chicagoans, the board of education must contain costs, not only for the school district’s sake but for the city’s. Its first order of business should be to confine CTU contract negotiations to financial issues and limit salary increases, staffing levels and other costs to revenues already available to the district. This should be accompanied by a radical downsizing of the central and regional offices, where staff is 18% of the district’s 45,000 personnel.

The CPS administration and CTU leaders are collaborators working to preserve the status quo – which punishes taxpayers and denies poor children quality school choices.  The administration seeks to sustain its bureaucracy and maintain control over local school resources. CTU leaders need the central administration to enforce its contract, which increases its members’ income and benefits while limiting accountability and competition.

This all comes at the expense of the students.