Chicago school board passes amended budget that relies on $150 million in state funds not yet approved

The Chicago Board of Education on Thursday approved an amended budget plan for the Chicago Public Schools that avoids laying off hundreds of teachers by assuming $150 million in additional state funding that is far from guaranteed.

The 11-7 vote came despite warnings from top Chicago Public Schools staff that the approved budget plan is not truly balanced as required by state law, and risks midyear layoffs, and even missing payroll in September.

The revised budget closes a $732 million deficit without relying on nearly 1,600 layoffs – including about 760 teachers – that CPS chief executive officer Macquline King had proposed under the plan she presented to the board. 

In a statement after the vote, CPS officials said the amended budget approved by the school board threatens the district's ability to get the short-term loan it will need to cover payroll in September

"Simply put: we cannot guarantee that CPS will receive financing in time for the September 4 payroll," th district said. "Failing to meet payroll is unacceptable. This places the District at significant risk of being in violation of the law and collective bargaining agreements. It may also damage our credit rating and severely restrict our future borrowing capacity for capital projects and operational needs."

Board members who supported the amended budget said that backing the original CPS budget plan, which included nearly 1,600 layoffs, would have hurt students, and argued it was their responsibility to instead pressure lawmakers to come up with additional funding by passing the amended budget plan.

CPS chief budget officer Emila Zoko warned that counting on more money from the state that has yet to be approved could result in a credit downgrade, and make it more difficult to borrow money needed to cover payroll in September.

Zoko urged the board to instead approve the budget proposed by CPS chief executive officer Macquline King, and continue lobbying state lawmakers for additional funding.

"We can pass the budget as is and continue advocating for additional state revenue, and if it comes through, we can avoid midyear spending freezes and make additional investments. But if we count on this revenue and it fails to come through, then it will be a disaster," Zoko said.

King's budget team told board members that 10 years ago, the district similarly relied on a budget plan that relied on unapproved state funding, and when that money didn't come through, CPS had to resort to midyear layoffs, furlough days, and other cuts. That maneuver also led to credit downgrades and increased borrowing costs for the district.

"There's money coming out of the classroom today to pay for this exact mistake from a decade ago," Zoko warned.

However, supporters of the amended budget plan noted that the budget King presented relies on $285 million from special taxing districts known as TIFs, funding which must be approved by the Chicago City Council, which has yet to begin its 2027 budget talks.

Board members who supported passing a budget relying on additional state funding argued it was hypocritical for their opponents to support passing a budget with TIF funding that is not guaranteed and not to support counting on more money from the state.

Zoko, however, argued that the City Council has regularly increased the amount of surplus TIF funding it provides to CPS during its annual budget process, while the state does not have a similar history of increasing funding to the district after it has already passed its fiscal year budget in the spring.

The Chicago Teachers Union, which had pressured school board members to pass a budget that relies on additional state funding, hailed Thursday's vote, noting that the Illinois General Assembly has yet to live up to a promise made in 2017 to provide 100% of what is considered "adequate" funding under the state's evidence-based funding formula.

Currently, the state provides schools about 73% of what is considered "adequate funding."

CTU argues that, under the state's evidence-based funding formula, CPS is owed $2 billion in additional funding, and Thursday's budget vote puts the pressure on state lawmakers and the governor to provide more money to the district.

"We've been on the annual ritual of layoffs and cuts for so long – and it is so common sense to plan to receive what you are owed – that it's hard to recognize how monumental that is," the union said in a message to its members after the school board's vote.

While Illinois House Speaker Emanuel "Chris" Welch and Illinois Senate President Don Harmon have said they will support seeking additional funding for CPS during veto session this fall, neither has said how much money they are prepared to provide, or how the state would pay for it.