Chicago passed its $5.7 billion school budget Wednesday, but the spending plan relies heavily on outside financial help to get the district through the school year.
That help includes almost $500 million in pension assistance from the state, a property tax increase of about $19 a year on homes assessed at $250,000, and restructuring about $255 million in debt. The Chicago Tribune reported that the district was also preparing to issue about $1 billion in bonds.
Frank Clark, the new school board chairman installed in July by Mayor Rahm Emanuel, assessed the district’s financial picture thus, according to the Chicago Tribune:
“This is much like, in your personal lives, if you begin to have revenue shortfalls ... you start living off your credit cards,” Clark told a packed chamber assembled in the basement of CPS’ Loop headquarters.
“And you can do it short term, but sooner or later, those credit cards max out, and you’ve got yourself in a very serious situation. That’s where CPS finds itself today,” Clark added. “It is a budget that keeps us going today. It is not a sustainable approach long-term.”
The board also approved spending $475,000 to hire an auditor to comb through CPS’ books to look at the financial issues that got it to the brink this June when it almost defaulted on its teachers’ pension obligation, according to the Tribune.
The district of approximately 396,600 students is hoping that legislators in the state capital, Springfield, will come up with a deal to cope with next year’s pension obligation. But as the Tribune points out, if the state legislators do not act, CPS might be forced to make $500 million in cuts during the school year, possibly in January.
The budget has a $1.1 billion deficit that CPS says is largely based on the way the state’s pension obligations are structured and the $676 million pension payment it will have to make this fiscal year.
The CPS budget for the 2016 fiscal year approved Wednesday, is about $64.4 million less than last year’s spending plan, according to the district. It includes the $200 million in cuts that were announced after the district made its last-minute teachers’ pension payment at the end of June. CPS said that since 2011, it has made nearly $1 billion cuts in its budget.
You can review the full CPS budget here. The Chicago Tribune also has more details.
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