Chicago schools CEO at the crossroads

When Alice Cooper crooned “School’s Out” in the 1970’s it was at least for the students, and maybe some of the teachers, a sense of relief and freedom from the rigors of education, albeit freedom. But for the Chicago Public Schools CEO Macquiline King, summer break has also brought the headaches of leading America’s fourth largest school system serving 322,000 to 323,000 students.

First she had to face off against a barrage of questions from the US House Education Committee, and as local public media station WBEZ reported, “about transgender students, religion and sex education as she testified under subpoena Wednesday at a contentious U.S. House education committee hearing.”

Battle lines were drawn when, “The Republican chair of the committee, Tim Walberg, came out swinging, accusing King and the other superintendents in attendance of representing school districts with “radical” policies that “sideline parents” and “compromise student privacy rights.”

It’s been well established that any reference to transgender students by the Trump administration is bound to appeal to their political base, and it was a major point in the 2024 presidential election, when President Trump faced off Democratic candidate, Vice-President Kamala Harris.

The Republican chair of the committee, Tim Walberg “ went so far as to say that some practices, such as allowing a transgender girl to sleep in the same room as a cisgender girl on an overnight trip, could rise to the level of “child abuse and neglect.” 

“Advocates for transgender youth say such policies help protect trans students’ privacy and safety.”

This session was watched closely by advocates for inclusion and those against it, and especially with the upcoming midterm elections in November, setting the table for issues to garner votes for the GOP.  And, the administration has threatened to withhold funds from school districts that held in opposition of  their own interpretation of student civil rights.

“Republican lawmakers, meanwhile, questioned King about whether she believes that teachers have to disavow their Christian beliefs to teach in CPS and what grade she thinks it is appropriate to start providing condoms to students. To most questions, including those about accommodations for trans students on overnight trips, King flatly told the lawmakers that CPS policies are aligned with Illinois laws.”

King emphasized in her opening statement, that “Our classrooms are not homogeneous. They are vibrant communities where students learn alongside peers whose lived experiences may differ from their own,” King said. “The only way to truly serve a student is to understand and embrace what makes each student and community unique.”

“The fact of the matter is almost 80% of our citizens polled clearly stated they don’t want males in female sports or restrooms, and yet your schools and the state of Illinois rules that you follow, that you, Dr. King, referred to so often, encourages that,” Walberg said.

In a nod to the increasing number of special education students that are enrolled in Chicago schools resulting in increased hiring for specialized teachers, Walberg, said, “Will that funding also be used to teach our children the truth, as opposed to going along with the cultural setting that is trying to change the reality around gender?” he asked. “Those are our concerns.”

King deflected these questions with a steady refrain, later in a written statement released that said,”reiterated that “CPS policies are rooted in law, the District’s mission and values.”

“Above all else, Dr. King emphasized the District must always prioritize the best interests of students and their families,” the statement continued..

As the media noted: “The Trump administration is investigating CPS over its policy that allows transgender students to use the bathroom that corresponds with their gender identity, as well as the district’s Black Student Success initiative, which aims to improve the experiences and academic outcomes of Black students,” which lost a $2 million federal grant for that program.

Chicago School Board President Sean Harden said King “did a fantastic job” explaining to members of Congress what “our values are as a district” and the policies that are guiding CPS. He said the board has “complete confidence” in King.”

“She has shown tremendous leadership,” he added. “Whether it’s building community partnerships, advocating for our schools or testifying before Congress as she’s done today, we applaud her unwavering commitment to keeping students and families at the center.”

The biggest battle for King was crafting a budget for a district that has faced innumerable financial challenges from long-term debt, to a crumbling physical plant to meeting the demands of the powerful Chicago Teachers Union to dwindling enrollment with outside debt totaling $9 billion dollars and debt repayment that is 9 percent of its budget.

With a $732 billion budget shortfall, she has proposed a budget that includes more central office layoffs, and teachers, angering CTU but attempting to preserve a level of education for a student population that is largely Black and brown and which lacks political support.

In an attempt to move away from classroom cuts, King  “proposed [a] $9.88 billion budget to close the district’s funding gap. The plan calls for $200 million in Tax Increment Financing, or TIF, funds from the city, the layoff of 760 teachers and 801 support staff, and five unpaid furlough days for CPS employees” reported WTTW.

In a tone that seemed both philosophical as well as pragmatic she told the media, ““We are not budgeting for the district we had yesterday,” King said. “It is imperative we are budgeting for the students we serve today and the futures of tomorrow.”

“Still, district officials admit it will be a challenge to keep cuts away from the classroom. Emila Zoko, the acting chief budget officer, said Thursday that the district had asked “department leaders to determine what reductions can be made with the least impact on students.”

But “it’s getting harder and harder to make reductions” that don’t “impact direct student programming and student supports,” she said to the Chicago Sun Times.

The plan is for at “least $105 million in cuts to non-classroom costs, such as reducing the number of custodians and central office staffers.”

Questions have arisen from Board members on how the debt reached a crisis point and “Jennifer Custer, a board member representing District 1B, is pointing the finger at Cook County officials who she says have dragged their feet on disbursing revenue from local property taxes.

“We are having some issues with our short-term cash flow because the county hasn’t delivered some of that money to us,” Custer said.

“Property taxes are the district’s single-largest revenue source. Without timely payments, CPS is forced to take out billions in short-term loans to pay staff and keep the lights on, resulting in millions of dollars in interest payments. That’s money that doesn’t get spent on the classroom,” according to the Sun Times.

At last count that amount is $4.5 billion in property taxes this year.

"As a result, CPS has been forced to borrow money through tax anticipation notes (TANs) to cover short-term costs.” And with a junk bond rating they have spent higher interest rates, of at least 80 million in interest payments.

According to Wally Stock acting chief financial officer at CPS said to Chalkbeat Chicago that, "“This year the situation is a little different. The cash flow for the district is different. In order for CPS to make payroll, we have to secure a short-term loan, and that application is due. We’re expected to close Sept. 2 in order for a payroll on Sept. 4. "

Repeated delays in Cook County property taxes “have worsened the problem” reported the Chicago Tribune; and. “CPS will hit its borrowing limit for its previous fiscal year in August so banks won’t approve new tax anticipation notes, or TANS until the next budget is passed.”

Any loans will be dependent on the lenders feeling that an approved budget will get far more favorable terms than without one.

On Tuesday "Two teachers unions have filed a lawsuit against Cook County Treasurer Maria Pappas, alleging she is not distributing millions of dollars in taxpayer funds to schools and that students are being harmed as a result.

The Chicago Teachers Union and the Illinois Federation of Teachers are seeking a court order requiring Pappas to issue late tax bills and distribute funds to school districts. The unions contend that money collected through property taxes is not reaching schools in a timely manner."

ABC Eyewitness News reported that, "Steve Yokich, an attorney representing CTU and IFT, said the treasurer has a legal obligation to distribute the money.

"It's really important for the treasurer to do her job under the statute. People have already paid their money. They're entitled to get what they pay their money for, which is education for their families," Yokich said.

According to CTU, Pappas is withholding up to $400 million in tax receipts from Chicago Public Schools.

In a written statement, Pappas responded: "No comment on the pending litigation. We have given the Chicago Board of Education more than $4.5 billion. These attacks are par for the course. It's election season."

Civic Federation President Joe FergIn the last budget cycle CPS got a windfall in Tax Increment Financing dollars of $552 million when local alderpeople passed a budget with a $1 billion surplus, something that will probably not be seen this year.

“The CTU claims the district is considering reducing the number of school days next year to save money. Jackson Potter, vice president of the union, said that’s on top of proposed cuts to librarians, tech coordinators and athletic directors.

“In discussions with the district and the city, we are hearing that up to two weeks of the school year could be canceled in order to meet the budget gap that will still exist after these cuts have been imposed,” Potter said at the end of June to the Sun Times,

“But the district denied that option was on the table. A CPS spokesperson wrote in a statement that “at no point has the District considered shortening the school year to alleviate these financial challenges.”

As we’ve reported before Illinois Gov. JB Pritzker has been reluctant to offer more state funds to Chicago emphasizing that there are other school districts in the state, yet “Jitu Brown, a board member representing District 5A, said lawmakers at the state level have not done enough to fund CPS.”

“I think it’s very important to note that you have states like California, where a little over 50% of the local schools’ budgets are covered by the state. In Chicago, we are far below that,” Brown said. “It’s also important to remember that for decades, Illinois, despite having an international city in its midst, was 49th in education funding. … It is time for the state to do some get-right by its children.”

Time is of the essence, say some, plus “Illinois’ evidence-based funding plan, a law signed in 2017 meant to provide more funding to undersourced school districts, says CPS is $1.6 billion short of “adequate” funding." 

Yet the state has expressed that using the 10 year old funding formula is estimated to be 79 percent; to bring the schools to adequate funding.

Custer said that even if a special session were approved and the state agreed to send more money, it’s unlikely that money would arrive quickly enough to help CPS in the short term. 

“Those (state dollars) wouldn’t be realized in this budget to help us in the crisis we’re in now. They wouldn’t show up until next year,” Custer said. “Just because we call for a special session doesn’t mean any of that money will come to our door.”

Questions remain on whether the CTU is working lockstep with other labor organizations and the city. “But Custer said CTU has not made an effort to collaborate on the budget process.

CTU President Stacy Davis Gates has criticized King’s proposal, calling it “dead on arrival,” and told local media: “Students have had to learn in overcrowded classes, practice under unpaid coaches, and be counseled by caseworkers with loads beyond compare all year, and now CPS thinks they can plan a week of furloughs and tell the staff who serve them they don’t have a job? Please,” 

“I think we’ve heard President Davis Gates come and say all the time, ‘come to the table.’ But I don’t think she’s reciprocating that notion,” Custer said. “If you just come in and say, ‘No, we’re not gonna do this. This is dead on arrival,’ it’s not true collaboration,” 

Meanwhile Chicago Mayor Brandon Johnson, a former CPS teacher, and organizer, has said that “to balance the budget off the backs of working people and at the expense of our students, that’s not sustainable.” 

Late breaking news on Tuesday brought a cancellation of the furlough days, based on a revised estimate of $285 million from TIF monies. 

King then noted that “We will continue to advocate with our partners at all levels of government to get the funding we know our students need,” in a statement Wednesday. “But trying to balance the budget on unrealized state revenue at the 11th hour would be a mistake with devastating short-and-long-term consequences.”

For the late money, from the tax coffers, she said in an interview on WTTW, a local public broadcasting station,"We are working with that office, and over the past several weeks it has been a concern that we’ve raised as well. We’re looking to receive a payment as early as next week.” 

Updated 30 July 2026

Saving Grace: new proposed Chicago Schools budget

It was back to school on Monday for Chicago Public School students and controversy has been brewing for the last several weeks in the nation’s fourth largest school system over how to handle a deficit of $734 million and facing new funding challenges on both the federal and local revenue streams; and interim CEO Macqueline King has seemingly done the impossible: crafting a proposed budget that has no classroom cuts, and done so with a combination of debt refinancing, taking custodial services from contractors to in-house governance, central office cuts, a hiring freeze and new revenue including a city based fund surplus from a neighborhood tax incentive program.

In another city, and at another time, King would have been praised but in Chicago with its long history of racial segregation, its love of bare knuckle politics, is not enough for the critics, who are conservatives for the most, who in part have picked and pulled at the proposals, (due for approval by the school board at the end of the month), and they have hammered away at King’s good intentions.

Part of that hellish road is the lack of political will by many in the local leadership community, and state legislatures to tackle the complexities of a large urban school system that is dominated by low income Black and Brown students whose communities have faced historic disinvestment as well as the challenges of harnessing talents to creatively tackle the problems that lie well outside the classroom walls.

In 2018 Chicago schools created a new evidence-based funding formula to define adequate levels of funding to reach established levels and the money to reach those goals using “a minimum ratio of students to core teachers counselors and other central staff, “ according to Chalkbeat Chicago.

Using that formula, CPS needs an additional $1.6 million more to fill a gap of $400 million, much more than what was received last year, and to note not only is Chicago eligible for that amount but also 300 hundred other statewide underfunded districts. 

The good news is that CPS is getting an additional $76 million more as it reaches Tier 1 funding, but, as stated, it is far from adequate, despite it being more than previously thought due to lowered tax revenue and a large increase in English learners.

Reaction has been cautious: “That increase will help schools and students but unfortunately does not keep pace with inflation, the rising costs of operating our schools, addressing capital needs, and proudly serving a greater percentage of students who require more services and programming,” said Mary Fergus, spokesperson for Chicago Public Schools also to Chalkbeat Chicago.

In addition using the same metrics all schools are to be funded at 90 percent adequacy by 2027 but according to WBEZ reporting, the Center on Tax and Budget accountability, “it will take until at least 2034 to reach that level.”

Things came to a head in the last mayoral election with a run from a former social services teacher and organizer from the powerful Chicago Teachers Union, who won the mayoral race, Brandon Johnson, who ran on a progressive ticket and ushered in a new era of Chicago politics coupled with a strong interest in regenerating the public schools.

 

Johnson’s background, however, and his desire to improve the schools along a new path has been met with derision from some, and his earlier efforts to secure a high interest loan from former CEO Pedro Martinez led to a bruising battle of words, and threats, and as city leaders wrung their hands, or gleefully warmed to the ensuing battle, many felt that this was just not just about Johnson, but also for his political agenda.

 

A 26 percent approval rating for the mayor, has further made his handling of the schools, along with the city budget and safety issues a referendum against him, as well as enmity towards the CTU. And in a recent meeting with Illinois state lawmakers Democrat State Rep. Curtis Tarfer said of Johnson, “Part of the reason we are where we are is because of the ineffectiveness and sometimes ineptitude of the fifth floor,” referring to the mayor’s City Hall office.

Among the critics is former mayoral rival Paul Vallas in the 2023 mayoral election, and a former CEO of Chicago Public Schools, who in an editorial in the Chicago Tribune said that while King’s plan was good it did not say enough about the financial future of the schools. “It disappointingly avoids structural fixes - guaranteeing Chicago will face a similar budget crisis next year, The plan clearly elevates CTU priorities above student needs.”

Or, does it? Many in the media and across the city expected her to fully embrace, and be a rubber stamp of Johnson, but she hasn’t; and, in one key area she has also sidestepped a high interest loan to help CPS in her proposal, a factor that most believe brought down Martinez.

One sticking point is the $379 million payout payment plan that the district needs to pay to help cover the $175 million pension; and, the District wants the city to pay, fearing that if they don’t get the Tax Increment Financing money, there is an increased risk of a financial cliff, and as WBEZ reported:

“We are telling the city up front that we’re not going to pay this year, but we expect you to give us the money,” board member Emma Lozano said during Wednesday’s board meeting. “I think that we’re dreaming here. That’s not the way things work. And I’m hoping that there is another budget report that’s going to add the payment because I don’t see how this is going to work.”

Going back to the previous incarnation some members of the board are “demanding the school district’s budget include a controversial $175 million municipal pension payment,” in reality a reimbursement to the city.

It’s important to keep in mind that current debt servicing fees are at a hefty $1.06 billion per year and the TIF money cannot be guaranteed with city budget challenges.

This is tough sledding and the resulting donnybrook resulted in a letter from those board members to King further complicated matters in what, for the most part, was a well engineered plan to avoid dreaded classroom cuts.

Included in the demand is that any loan options “should be included as an option to be utilized only in the event it is necessary to avoid further cuts to the classroom.”

“The budget proposal reflects a total of $272 million in cuts, including to the district’s central office staff as well as custodial services, crossing guards, cafeteria staff, and more. Before Wednesday’s board meeting, SEIU Local 1, the union that represents some district custodians, held a protest against job cuts affecting its members. Custodians held mops and chanted “Keep schools clean” in front of district headquarters and decried the cuts, which they said blindsided their union and will result in dirtier school buildings.”  

On the other hand, the balancing act that brought this proposal has some key elements to help students increased money for special education students of $62 million and $7 million for bilingual services, and increased staff for principal, assistant principals, clerks and counselors, among other staffers; and, especially notable is a program to bring students back to school who have been absent for 12 to 18 months and the supportive services they may need. And, in all things considered the result is an $8.43 billion dollar operating budget.

Taking things further afield, Chalkbeat also reported, “At the Wednesday meeting, the district’s chief budget officer Mike Sitkowski said the proposal was informed by input from residents who urged the district to protect classroom instruction, resist more high-cost borrowing for operating costs, and forego the city pension reimbursement. The district is taking on $2.4 billion in new long-term debt to pay for maintenance of its aging school buildings. The new budget proposal includes $556 million in capital expenses.”

That, in and of itself, is a boon to an aging physical plant, despite the debt, and some residents remember when former Gov. Bruce Rauner, a Republican, described many Chicago schools as “crumbling prisons.”

While Vallas and others deride King for not planning for future deficiencies some say dealing with the present reality is fairer to students to not only continue the fiscal reality, but to try and tackle weakened test scores, despite improvements,

The mixed reaction from board members and others suggests that the heavy lifting is not over and the weeks ahead are going to be burdensome.

Chicago faces financial cliff with budget dilemma

City budgets across the United States are still recovering from the COVID pandemic and of the nation’s largest cities faces a seemingly uphill battle and that is Chicago, whose Mayor, Brandon Johnson, less than a year in office, faces not only the daunting task of filling a deficit of $1 billion, but also intense criticism of his handling of burgeoning crime, and balancing the budget of Chicago Public Schools, who face a deficit of $500 million, and in whose negotiations with his former employer, the Chicago Teachers Union, shadow his dissatisfaction with school CEO Pedro Martinez, who he faults for his refusal to sign off on a loan of over $300 million to stave off a the deficit.

“The latest budget crisis is playing out as the city faces one of the highest unemployment rates in the country, and its population is the lowest it’s been since 1920”, notes Illinois Policy, a right leaning think tank. And, without the revenue from the federal COVID relief package Chicago is facing a financial cliff.

“Between March 2021 and June 2024, Chicago spent more than $238.8 million on a host of programs including affordable housing, mental health, violence prevention, youth job programs and help for unhoused Chicagoans, according to the most recent reports filed with the U.S. Department of the Treasury as required by federal law, and, “That is approximately 44% of the $540 million Chicago officials set aside from the city’s $1.9 billion share of the federal relief package known as the American Rescue Plan Act, or ARPA,” in an October analysis by WTTW, the local NPR affiliate.

Johnson has said,” I saved the taxpayers over $220 million in last year’s budget, But the hard reality is that our expenses have outspent our revenue.”

To note, it has been reported that,  “The federal government spent over $800 billion to help states navigate the pandemic and government imposed economic shutdown,” and part of the well for Chicago will no longer be available, and statewide as a blue state, it’s hardly likely to receive additional monies from the incoming Trump admimstration.

Future Projections face special interests

Local media has also reported that “Baseline projections estimate the city’s budget will grow to $1.12 billion in 2026 and $1.32 billion in 2027, but those shortfalls could be as large as $1,58 billion and $1.93 billion. Chicago is projecting its 27th consecutive budget shortfall in upcoming years.”

Money may be the root of all evil says an old maxim, but managing a big city budget requires careful deliberations, and in Chicago facing off various groups, from the business community to low income and housing advocates is a tricky act; and, in a city with a long history of racial segregation, and disenfranchisement, it’s doubly hard to meet durable satisfaction with some of these groups. 

Equally important are those residents and local leaders who did not want another Black mayor after the battle-scarred administration of his predecessor, Lori Lightfoot.

Elected on a progressive agenda, Johnson has tried to center his decisions with that in mind but has strained relations with the business community who work from a different model.

Meanwhile many residents are taking a “bread and butter" stance towards finances, and often don’t have an understanding of when, and how, a progressive movement would benefit them.

During his mayoral campaign Johnson said that he would not propose a property tax to help balance the budget, and in a September press conference, he said, side stepping questions from reporters: "This is just a forecast," he said, "It's a moment in time, and so no decision will be made just based upon a forecasting. But what I will say is that I'm very much committed to our overall vision of investing in people."

Lately, in a recent media appearance the mayor emphasized that he is “going to continue to do what I was elected to do, which is to respond to decades-old processes and failures, by repairing the structural damage by actually paying into our pensions while making the critical investments that ultimately build a better, stronger, safer Chicago.”

Going Progressive and facing pension obligations

The latter is definitely a progressive stance, and the question of how he can meet that goal has become a central question of the overall city budget proposal; as well as that of the CPS budget, which contains a new, and costly, contract with the teacher's union.

CPS also is part of the mix, as noted earlier, and “While discussing the release of the forecast on a call with reporters, Johnson suggested he would continue to pressure Chicago Public Schools to assume approximately $175 million in pension payments for certain employees who participate in the city’s pension funds rather than the Chicago Teachers’ Pension Fund.”

Importantly, in recent reportage, we see the following: “The Chicago Board of Education did not include this in the $9.9 billion budget they approved last month. As the district faces its own budget shortfalls and is in the middle of negotiating the new CTU contract – which could add up to $13.9 billion in additional costs – it seems unlikely the district will bail out the city by taking on that pension expense.”

Outside of that, the four pension funds are as follows, per the Center for Tax and Budget Accountability: "The City of Chicago is responsible for funding the following four, defined benefit public pension plans: Laborers’ and Retirement Board Employees’ Annuity and Benefit Fund (“LABF”), Municipal Employee’s Annuity and Benefit Fund (“MEABF”), Policemen’s Annuity and Benefit Fund (“PABF”), and Firemen’s Annuity and Benefit Fund (“FABF”).”

“We really need to look at prioritizing our investments,” Christopher Taliaferro, an alderman from a ward on the west side of the city and a former police officer, said during a recent budget hearing. “It’s almost like buying caviar when you can only afford Spam. I love Spam but the problem is we are spending beyond our means.”

A smaller property tax on the table?

November’s proposal of a $300 million property tax should not have come as a total surprise to some, but as we have seen, for many lawmakers it was simply unacceptable, and the 50 alder people sitting on the city council rejected it by 50-0; and, now facing a looming deadline of December 3 there is much hand wringing, and some who feel that there must be some sort of a property tax increase needed.

All options are on the table, and ABC7 reported that taking a property tax off the table was unfeasible, said some, and "For us not to get that revenue from last year was a mistake, and it was politics involved in that. And so they're going to ask for a property tax increase. I'd be shocked if they don't," 17th Ward Alderman David Moore said.

City Hall observers have felt that the council’s rejection was a new dawning that it would not automatically rubber stamp a mayoral proposal, as had happened with previous mayors, Harold Washington excepting, who was fought tooth and nail by the White council members; and, that his supporters saw as a racist attempt; and, few of that era can forget the virulent opposition by Ald. Edward Vrdolyak to Washington in the infamous Council Wars.

That assertion might now be considered hyperbolic with a different person sitting in City Hall and the council containing a greater majority of Black elected officials and department heads, but present reality beckons.

Start with the booze

BNN Bloomberg reported that, “Now, they’re negotiating piecemeal items from higher levies on alcohol sales to cloud computing to garbage fees. The fight is putting the city’s credit rating at risk, with S&P Global Ratings warning that the likelihood of ending the year without a budget has increased.”

Protests against the alcohol tax, which is expected to fetch $10 million in needed revenue, were swift and immediate: "We already pay, among the hospitality industry, the highest beverage taxes in the whole Midwest and some of the highest in the country," Pat Doerr with the Hospitality Business Association of Chicago said. "City Hall's proposed tax increase would make us the second-highest taxes on the enjoyment of beer, wine and spirits in the whole country."

Yet there are some that feel this tax would only be a pinch, not a stab, and, “The mayor's plan to raise an additional $10 million from higher alcohol tax would amount to adding just pennies to a drink served at a bar, his administration says. The hospitality industry says it can't afford any new tax after feeling the pinch from the rise in labor costs this year because of the increase [wages] for tipped workers,” reported local affiliate, ABC7.

"We're evaluating all of the different tools in our toolbox, including looking at slowing down hiring, an outright hiring freeze, as well as reducing other non-discretionary spending, sorry, other discretionary spending that our departments have within the budgets," City Budget Director Annette Guzman has said.

Surplus money to the rescue?

One option being pursued is to raid the surplus money for $272 million that was saved from tax years 2022 and 2023, and that Lightfoot, signing an executive order, designated to be sent “to the city’s pension funds on top of the more than $2 billion statutory payment already in the budget,” recently reported by the Chicago Tribune.

That effort, if approved, would cost a whole set of new problems, kicking the can down the road for future years and endangering a downgrade in financial ratings that were boosted by Lightfoot’s actions, even though some say it was still short of what was needed.

The Center for Tax and Budget Accountability has said,” These four systems have the lowest funded ratios for local pension plans in the country. Considered together, in 2022 Chicago’s four systems had $44.7 billion in liabilities, but only $10.8 billion in assets to cover those liabilities. This means Chicago, and hence its taxpayers, face a significant, $33.9 billion, aggregate unfunded liability.”

Moving away from those extra funds into the pension system would come at a cost, said Amanda Kass an assistant professor in Depaul’s School of Public Service, to the Tribune, “The credit rating agencies look very favorably on the city putting extra money into the pension systems because it help shore up the system’s finances faster. A move away from that is potentially a negative for the finances of the pension systems.”

“Chicago is really in some serious trouble,” David Schleicher, a Yale Law School professor who focuses on state and local finances, said to BNN Bloomberg, "The city is “caught between the failure to address structural problems during Covid and broad unhappiness with the property tax.”

Both the known and the unknown have reached a tipping point and for Illinois Policy, “The standoff is shedding light on Chicago’s mountain of debt and pension liabilities, which make up nearly one-third of the city’s spending and limit its budget flexibility. Last week, S&P put the city on a negative credit watch with at least a one-in-two chance of a downgrade in the next 90 days.”

Options meet baseline shortfalls

They also noted that, “The positive outlook assumes waning inflation and reduced interest rates spur faster economic growth in tandem with slower growth in city expenditures. The negative outlook scenario assumes a short recession in 2025, increasing expenses and decreasing revenues, followed by a rebounding economy in 2026 and economic growth in 2027. The city’s 2025 budget shortfall was consistent with the baseline estimates produced last year, which assume declining inflation and interest rates accompanied by modest economic growth.”

"There are a number of options that, you know, we will explore. What we're working to safeguard against is harm to constituents, to everyday people," Johnson has said in response to such criticism.

Racial equity is very much on his mind when he added, "As much as we are faced with challenges, it has not disrupted my vision to invest in people and especially the West and South sides of Chicago." 

Significantly, it was also reported: “And though the city was able to close this year's previously projected deficit of $538 million, the revised forecast shows the city is still facing a $223 million deficit for the rest of this year. The cause is mainly blamed on the $175 million pension contribution due from Chicago Public Schools and a shortfall in corporate tax revenue.”

Pension holidays were taken before specifically by former Mayor Richard M Daley, whose raid of the coffers, in 2007 to prop up the Chicago Transit Authority, as one example, to prevent a fare increase met a new standard of fiscal management.

“The problem we have is for two decades the employer didn’t do their part,”  Chicago Teachers’ Pension Fund director Chuck Burbridge told WGN Investigates in a 2017 report; and “They skipped payments.”

“They were called “pension holidays” and they were orchestrated under the watch of former Mayor Richard M. Daley and passed by the Illinois legislature under Democrat and Republican governors.”

Gong back is not an option

“In order to close the projected annual budget gap, the city has often resorted to “scoop and toss” budgeting practices, such as refinancing and restructuring debts, which further delay and increase inevitable costs. It has also relied on one-time revenue sources, fund sweeps or other “efficiency and savings” measures to temporarily provide the resources needed to “balance” the current years’ budget, remembered Illinois Policy.

They also added cautiously, “These short-term solutions, while politically expedient, do little to rectify the underlying problem in the city budget: Chicago spends faster than it earns. As a result, the city has faced a projected budget deficit each year for well over two decades.”

Taking a look in the rearview mirror of time reveals both philosophical and pragmatic approaches, and as The Week reported in September, quoting Johnson who said to reporters, that "sacrifices will be made." 

Hard decisions are often the words heard from alders as they look at deficits and Johnson’s statements, as well, gives us a glimpse to what may be on the table, as well as what many see as an eventual lower property tax.

Homeowners are worried

But most importantly there are many homeowners who feel that their property assessments have already burdened them and are concerned about any tax increases.

According to the Cook County Treasurer, for this year the median property tax bill is $3,811, an increase from $3,285 five years ago.

Scouring the budget for cuts is bound to please some, and no one, but the effort has been made, and as reported, there are steps being taken and as the city's budget director, Annette Guzman, said in a statement:

“This includes a series of budgetary restrictions such as a "citywide hiring freeze and stringent limitations on non-essential travel and overtime expenditures outside of public safety operations." Guzman noted that the 2025 budget shortfall — expected to be $982.4 million — is "largely driven by rising personnel, pension and contractual costs, alongside ongoing revenue challenges."

Rephrasing Abraham Lincoln, the question remains, is that enough to please some of the people, most of the time? In an awkward attempt to quell the storm, Johnson caught in the crosshairs, insists, “I don’t want cuts, I don’t want layoffs,”

There are some efforts by nearby states that Chicago could emulate; and, The Week noted that “Chicago is not the first city to face these challenges and could take lessons from other cities in similar situations. In 2022, Milwaukee was "on the verge of financial collapse" with a massive deficit and "possible bankruptcy on the horizon," said consultancy EY-Parthenon. The city was "able to document the local actions it was exploring and could demonstrate to members of the Wisconsin Assembly the mayor was taking steps to fix the situation."

Milwaukee's "comparison with other cities and a methodical accounting of the cost-cutting initiatives the city government had already undertaken helped demonstrate to legislators, the business community and the public that the politically difficult decision to raise taxes was likely unavoidable," said EY-Parthenon. This could become a similar path as Chicago works to dig out from its own deficit.”

Aftermath: Budget approved

On Tuesday, Johnson scored a win, some might say a pyrrhic victory, when the Council passed his $17.1 billion budget by a narrow vote of 27 to 23, without a property tax increase, returning to his campaign promise of not raising them, but the victory does contain a variety of tax increases on everything from valet parking to streaming services and cloud computing, and also that dreaded bag tax, but critics have argued that this is a temporary fix and still risks a credit rating downgrade by national credit agencies, this making it fallout for the city to borrow money.

For land debt from the purchase of the old Michael Reese hospital, there is a $40 million settlement by spreading out payments to pay off remaining debt from that space, intended for the 2009 Olympics, that later was awarded to Rio, in what some have also criticized the mayor for, but this is to help satisfy the $91 million purchase price by former Mayor Richard M. Daley, and not an error from Johnson.

Critics, including many council members, notably Maria Hadden of the 49th Ward, have voiced their concern with a process that she called fractious and that many have said lacked transparency.

Andre Vasquez of the 40th Ward said that the budget is a “short term fix that is not financially responsible,” and Anthony Beale of the 9th Ward while pleased with the absence of the $300 million property tax said, “Since then we just miraculously, voila, went down to $150 million,” Beale said. “We went to $68 million. Now, miraculously, voila again, we go to zero. However, in order to get to zero we are “fining”and “feeing” Chicagoans to death.”

Local affiliate, NBC5 reported, “Ald. Bill Conway, who voted against the budget, said the city “can’t ask working families to pay more,” and that Johnson is risking serious issues by not considering additional spending cuts.

“There were additional efficiencies to consider but unfortunately, Mayor Johnson repeated some of the same mistakes of those before him by being unable to make hard choices and kicking the can down the road even further,” he said in a statement. “This budget process was characterized by unsuccessful sweeteners, unnecessary delays, and proposals that, as the Mayor put it, were just meant to ensure we were paying attention.”

Hadden had added, according to coverage from WTTW, that, “Johnson’s handling of the budget negotiations left the City Council “fractured” and made it harder for Chicagoans to trust their government at a perilous moment for the city as President-elect Donald Trump prepares to take office.”

“We are not prepared, and the fault lies squarely with you and your administration,” she said.

It seems that the very same problems that have plagued previous mayors have settled squarely on Johnson’s shoulders, but without the rubber stamping of those councils.

Updated December 19, 2024 at 2: 15 p.m. CDST

Chicago Schools issues ahead of school board elections

Chicago Public Schools have been dominating local headlines for months now, and not always for positive news; whether it’s for a new funding formula, or changes for governing magnet and selective enrollment schools or transportation problems for the same, but headlining many stories was the need to fund a deficit, and how to get more money from the Illinois Governor J..B. Pritzker.

For many residents and observers, the nation’s third largest school system is on the financial precipice and has also faced a  mountain of criticism for failing to meet student standardized goals for reading and math; and, the Chicago Teachers Union also faces formidable opposition for even asking for more money.

Adding to the issues faced is that one of their former organizers, Brandon Johnson, is now mayor, with a hide bound progressive agenda, but whose myriad of other problems: housing migrants, increasing homelessness and high crime threaten to overwhelm him.

The elephant in the room is the near $400 billion deficit, the result of CPS being helped by COVID-19 federal relief funds, which is about to end, but as most agree that budget hole is bound to grow, and especially without the inclusion of staff raises when it announced its projected deficit, not to mention a new CTU contract, upon the existing one ending June 20.

Problematically, according to local public radio station WBEZ, is “the school district has not publicly released school level budgets, a break with past practice; media outlets, including WBEZ, requested them under the Illinois Freedom of Information Act. The district denied the FOIA request, describing the budget as ‘preliminary factual information that is inextricably intertwined with ongoing deliberations and policy formulations,’ leaving many wondering what to expect.”

CPS primarily serves a Black and Brown population, and amidst the city’s historical patterns of segregation, the lack of political will by some white majority leaders has led to a juncture that often seems insurmountable.

Even the much lauded selective enrollment and magnet schools, “created under court ordered desegregation, many still lack the diversity of the city and are largely segregated by race and class. A couple dozen are integrated, but serve more white and Asian American students than the rest of the school district,” said Chalkbeat Chicago.

New funding formula is on the books, but faces opposition

One seemingly ray of hope has been a new funding formula that is individually school based, instead of per pupil. In March CPS announced the change, a campaign promise by Johnson to end the old plan of student based budgeting that gave schools a set amount for each child that was enrolled.

This new plan establishes a baseline level but this has brought backlash from some schools who have voted against the budgets they received, feeling that it is inadequate.

Chicago Public Radio station WBEZ reported that, “Several elected local school councils in Chicago are either refusing to approve budgets sent by the school district or are approving those budgets with a message to let the district leaders know they don’t think they are receiving enough resources for the coming year.”

“The budget that we have does not meet the need,” said Sequoiah Brown, a member of the local school council at Poe Classical School in Pullman on the Far South Side. “Our parents are adamant about the needs of our students. You should be trying to bring up the others to that standard, not taking from one to give to the other. That is not how equity works.”

“The school district has not publicly released school-level budgets, a break with past practice. Media outlets, including WBEZ, requested them under the Illinois Freedom of Information Act. The district denied the FOIA request, describing the budget information as ‘preliminary factual information that is inextricably intertwined with ongoing deliberations and policy formulations,”an assertion that the Illinois Families for Public Schools, a nonprofit parental advocacy organization, dismissed as “ridiculous.”

“As school communities discuss their budgets in a year of major budget changes leading to LSC’s holding budget votes, district-wide numbers to compare should be available to public reporters. These numbers ARE public at school level!” the group posted on X.” 

Those Local School Councils are also fearful that they won’t have enough classroom aides, or may have to do without administrative staff.

In a recent interview with WTTW Chicago’s public television station, CPS CEO Pedro Martinez answered a question of why the Fall budget, scheduled to be released mid June is now to be released in July, by saying, “We need to really firm up our budget.”

“We want to really firm up our budget. One of the things that we said,is again, to protect the gains that we’re seeing. We wanted to protect the investments at our schools. We worked with our principals to make some tough decisions, and so we’re finding efficiencies and reductions in our central office.

We want to make sure that we firm those up. I will tell you that I feel confident that we’re going to have a balanced budget for the July board meeting. We are going to be able to stave off the cuts from the schools. It does mean though, that we’ll have some challenges centrally, plus, we’re still going to have some more challenges in the coming year.”

For the deficit he noted: “One of the things we did is we phased in the federal funding over three years, so year three is next year. We’ve had a structural deficit of $600-700 million a year. It’s about half of that — $400 million — for next year. That’s as we have the last tranche of federal funding that we’re going to have, so that’s why the deficit will be bigger in 2026. The main issue is that, and our state has done a great job in adding funding, but as I said publicly, our needs are outpacing the funding we’re getting from the state. I have more students than ever that need IEPs that require special services. We have more migrant students than ever. In fact, our enrollment is actually up — we’re almost at 329,000 students as we finished last year. That’s up from 323,000 from the year before. So for us, we’re seeing more students, more needs, and the funding just is not keeping up.

We also know that the state, even from their own funding formula, they’re short about a billion dollars, with a “B,” just for Chicago alone. Again, this is not a problem that our leaders in the state created — they inherited (it), but I really want to work with them because we are seeing the evidence of what could happen when we invest in our district.”

Martinez’s statements may have been diplomatic to keep the tap open on future funding from the state, and there has been widespread opinion that the state is  not mandated to help fund Chicago schools with so many other districts statewide needing money.

CPS faces gubernatorial hurdle

Pritzker and the mayor have been at odds over funding for Chicago and don’t seem to see agreement, and he said, to local media, “It ought to be our priority to put more money into education, but not just for the city of Chicago,” and even more pointedly, “The city of Chicago is 20 % of the population of the state. So we have a lot of other people, a lot of other kids across the state going to school. We need to fund their schools better, too.”

In mid May, the Chicago Teachers Union went to the state capitol of Springfield to ask for $1.1 billion in state funding, and also to protest against House Bill 303 designed to “protect selective enrollment schools in Chicago from closure, admission changes or disproportionate state cuts,” noted an editorial in Crain’s Chicago Business, waring that these schools, while part of a flawed school choice system, are “some of the best high schools in the country within Chicago city limits, and that changing the system, or dismantling it, would cause “families to pull ups stakes and move elsewhere.”

Critics have pointed out that it is unlikely that CPS would close selective schools, and State Rep. Margaret Coke, Democrat of Chicago, has said that she hopes no significant changes will be made to charter schools until Chicago has its fully elected school board in 2027.

The Chicago Sun Times reported that “The majority of Illinois’ public school districts, including CPS, have less than 90% of the money needed to adequately serve students, state data shows. That’s less money for everything from general and special education to art, music and after school programs.”

Opposition to increased monies has been on the agenda since April when Pritzker, facing opposition from liberal supporters gave the bare minimum of an increase to state school funding, and as the Chicago Tribune reported, “cutting back on state funded healthcare for immigrants who are in the country without legal permission,” which has a deleterious effect on migrant children in public schools.

Looking back on the funding formula by his predecessor, Bruce Rauner, a Republican, critics point out that Prtizker’s increases are not enough to meet the state’s goals of adequately funding public schools,” under Rauner’s 2017 formula, added the Tribune.

Rep. Will Davis, Democrat, from south suburban Homewood, who was one of the sponsors of the 2017 bill “has pushed for at least a $500 million increase annually.”

The funding for K through 12 was increased by $350 million, the minimum allowed by the law according to education supporters and advocates.

 Test scores have improved, somewhat

In what can be widely touted as a huge improvement, test scores have risen for CPS students and in the WTTW interview Martinez said, “since the pandemic started, we’re now at exceeding pre-pandemic levels in reading, and we know that reading is foundational for all of our students . . [W]e have intervention teachers at our schools with the highest poverty rates; we have seen our Black students have the biggest gains in our district by six points.”

And, in a notable increase he added, “That’s 6% for black students. That is a large leap, 6%, which indicates to me that they had some room to grow, that there was a lot of room to grow.”

The interviewer questioned this, saying, “31% of students being proficient in English Language Arts, that still means that 69% are not proficient. What’s the plan to continue the progress, this growth that you’ve seen?”

Martinez replied, with some hesitation,”Yeah, no, absolutely. So I think one of the things I know is that this year’s gains build on last year’s gains, which also saw a six-point gain in reading and a two-point gain in math. And we know from a study from Harvard and Stanford that we are number one in the country in reading recovery, number one in reading recovery for Black students and number two for Latino students in the country, so this builds on these gains.”

Caught off guard the superintendent seems to have tried to place a spin on what are still weaker scores, and no doubt will be pounced upon by conservative and Republican lawmakers, when he said:”The other context I would give you is that our state proficiency rate, they were at 35% in reading and 27% in math. Our state overall also doesn’t have high ratings, but remember, we have a very rigorous assessment. More importantly, what I saw was students across every grade level growing. . . We also have to remind our community that our high schools right now couldn’t be stronger. We’re seeing record graduation rates, record scholarships, record number of college credits being earned.”

Selective and charter school dilemmas

We have previously reported on the fears that selective enrollment and charter schools faced in a recent post, on the vote to extend their contracts between one and four years and not the usual, and expected 10 years,” but parents of those schools are also frustrated by the lack of adequate transportation, in both directions for their children.

In late March, The Chicago Tribune reported that, “For months, students attending some of the city’s most selective schools have traversed Chicago, taking buses, trains and carpools sometimes as early as 5 a.m., to show up on time for school — and the district is telling parents they may have to continue to find their own transportation into next school year.”

As can be expected the news was met with an uproar of disapproval:

At that time, “For more than seven months, the district has not provided busing services for roughly 5,500 general education students across the magnet and selective enrollment schools. Some of their parents have repeatedly told the district they are commuting for up to four hours a day to get children to their classrooms, risking their jobs and tiring out their kids in the process.”

General education students are also competing with the needs of other students, those with disabilities and special education; and, Chalkbeat reported, also in March, “For general education students, the district is offering prepaid Ventra cards, a move that has drawn criticism from families who don’t have the flexibility to accompany young children on public transportation. Additionally, about 3,700 students with disabilities have opted for stipends of up to $500 to cover their transportation needs on their own, down from 4,000 students at the start of the year, according to the district.”

In a hoped for menu, Johnson also wants “free public transit for students, housing for the district’s 20,000 homeless students,” they added and a partnership with the CTU for the so-called wraparound services, long on the wish list.

“Currently, about 130 students with disabilities are on bus routes longer than an hour, according to CPS. That’s significantly down from the 3,000 such students on long routes last year, but it is up from 47 students at the start of the school year.

Many families with general education students at magnet and selective enrollment schools have protested the district’s decision and have demanded a stipend to cover their transportation costs. Some families who have struggled to juggle transportation have pulled their children out of magnet schools and enrolled them somewhere closer to home.”

Just before the announcement of the finding issue, and an earlier extension for parents to enroll their children, creating yet another problem, there was a protest in Daley Plaza, and outraged parents demonstrated, loud and clear, for a change, or a stipend to help them.

“The district is providing stipends to more than 3,700 families with students with disabilities but has said providing stipends to general education families is not sustainable, citing a projected $391 million budget shortfall,” noted the Tribune.

Parent Marissa Lichwick-Glesne told ABC 7 News that, “"I believe this is indefensible, inexcusable, and unconscionable," and, "We know what needs to be done, and we know what these kids are going through and what these parents are going through every day to get their kids to school, and we need help. We need relief."

“The district is providing stipends to more than 3,700 families with students with disabilities but has said providing stipends to general education families is not sustainable, citing a projected $391 million budget shortfall.”

A parental suggestion for transportation hubs to alleviate the problem has been rejected as not being feasible for all students: “Hubs would work for some but not all routes, thus not serving all families and schools in an equitable manner, but, again, we will continue to explore all options for the coming school year,” district spokesperson Mary Ann Fergus said in a statement.

"Students and parents are now facing commutes up to five hours per day. Some have resorted to unreliable and potentially unsafe third-party transportation services costing families hundreds of dollars each month," said Hal Woods with Kids First Chicago.

Increased student migration population

One factor causing greater budgetary concern is the arrival of migrant children, mostly from Venezuela, who have stretched the budget, as well as class size, and Martinez plans to cut the central office to staff in an attempt to cut the deficit.

Exact counts of migrant children in CPS schools vary depending on who is doing the counting, for the District, the count is 9,000, but using the criteria of the Illinois State Board of Education the number ratchets up to 17,000, and is based on if the student is born in the U.S. or Puerto Rico, and has less than three years in an Illinois school.

Beyond these methodologies lie a myriad of problems, mostly related to bilingual instruction, and despite mandates from the state, many schools in Chicago do not meet the criteria of properly staffed teachers, who have received certification.

Chalkbeat recently reported that families who move to find affordable housing are often not told that their children can stay in schools that offer bilingual education and can help them advance in their studies.

In that search many of the families end up in racially segregated neighborhoods with under-resourced schools, and can fall behind, and cited that one school on the city’s West Side, Laura S. Ward has depended on a kindergarten teacher and a custodian who speak Spanish for classroom assistants.

The New Arrivals Grant was recently defeated in the state legislature and Pritzker’s office has told schools in need to use the McKinney Vento Subgrants from the federal government, or the $350 million awarded to state schools.

What the future holds for Chicago Public Schools remains a question mark for many, with its myriad of challenges and problems, but a lot of hope is vested in the November school board elections, a first for the city.

Hopes for a more democratic process and community input are high and despite that the board will only be partially elected, with a full election slated for 2027.

There are concerns, among them that the positions are not paid, shutting out many low income voices dealing with an already bureaucratic laden process.

The historical significance cannot be underestimated, as it is a first for Chicago, while the rest of Illinois does have elected school boards.

The new board will have 10 of 21 school board seats, but the rest including the prescient, will be elected by the mayor, giving him a majority control for the length of his term, and the newly formed board will begin meeting in January of 2025, and as we have seen there will be a full agenda.

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