Chicago Schools Face Big Money Problems

Chicago Public Schools (CPS) is in a tight spot. The school district has a huge budget problem. The school board recently posted a budget change that lets the mayor's office borrow money for CPS. This is a big deal because the district's budget for 2025 has a massive hole in it. The district approved a $9. 9 billion budget in July. They did not include the costs of a new teachers' contract or a $175 million payment to the city's pension fund. This is a big problem. The budget change has a new clause. It says if CPS can't balance its books with extra money from the city's taxing districts, it can borrow money. The alternative is to make big budget cuts. This is a big change. Finance experts say how CPS balances its budget will have long-term effects. This year's budget process was different from usual. The Chicago Teachers Union (CTU) said the board usually passes a budget amendment after the contract is settled. This time, things are different. Two public hearings are planned for the end of next week. The school board's proposed amendment needs two-thirds of the votes to pass. The board hired a financial advisory firm, Baker Tilly, to help. But their report hasn't been released yet. The city used to have full control over the school board. But now, the city is trying to separate itself financially from the district. The city is legally obligated to make the $175 million pension payment. Most of the staff covered by the municipal pension fund are current or former nonteacher CPS staff. When the city's budget was closed at the end of last year, CPS received about $300 million in TIF surplus. After accounting for other obligations, $139 million is available for the district. This isn't enough to cover the contract costs and pension payment. The CTU has been negotiating a new contract with the district since last April. Union members said both sides are close to an agreement. The union couldn't provide an estimate of the cost of its latest proposal. Thad Goodchild, CTU's deputy general counsel, said, "We are at the stage of negotiations now that will decide if we are headed toward a big, messy, unnecessary fight. We submitted to CPS today a last, best and final offer that should land this contract. Let's not snatch defeat from the jaws of victory. " The school board has to make financial decisions by March 30. The city's fiscal year ended on Dec. 31. This is a critical time for CPS. The district needs to find a way to balance its budget. The city and the school district are in a tough spot. They need to work together to find a solution. The future of CPS depends on it. The district needs to make smart financial decisions. The city and the school district need to work together to find a solution. The future of CPS depends on it.