CPS gets TIF windfall, but takes on pension, crossing guard costs in Lightfoot’s 2021 budget

Mayor Lori Lightfoot was accused Tuesday of “defunding” the Chicago Public Schools by declaring another record tax-increment-financing surplus to generate a $189 million windfall for CPS, but snatching back $55 million of that money by shifting pension and crossing guard costs from the city to the schools.

“Folks were irritated by the [proposed] defunding of the police, yet we have watched year-after-year, decade-after-decade of our public school system being defunded. The irony is not missed on me,” said Stacy Davis-Gates, vice-president of the Chicago Teachers Union.

“All summer long, you had young people who attended Chicago Public Schools saying they felt safest when police officers were not in their school communities. Now the dollars that are supposed to fund their school communities are going to go to prop up a bloated police budget. That is irresponsible. It is tone deaf.”

Budget and Management spokesman Kristen Cabanban said the city has been “working towards ensuring that each sister agency pays its fair share and is self-sustaining,” adding: “This change continues that effort.”

Even so, Cabanban countered that Lightfoot’s commitment to CPS has been “unwavering, particularly now as the City grapples with the impacts of COVID-19 that have disrupted the educational instruction process and widened learning gaps for students across our city. “

Lightfoot is scheduled to deliver her 2021 budget address on Wednesday in an otherwise empty City Council chambers.

Davis-Gates branded the mayor’s plan to siphon nearly 30% of the TIF windfall particularly “irresponsible” at a time when Chicago is “in the throes” of a second surge of coronavirus cases.

It means CPS will have even less money to fix “inadequate ventilation and air filtration systems” that must be upgraded to make schools safe before students return for in-classroom learning, Davis-Gates said.

It’s the second straight year Lightfoot has balanced her own budget by shifting costs from the city to the public schools.

Last year’s shift occurred in the middle of a teachers strike when the $93 million in pension and security reimbursements demanded from CPS could have shortened the walkout.

This year’s shift also comes at an equally perilous time.

Lightfoot’s hand-picked Board of Education rolled the dice by approving a budget that assumed $343 million in federal stimulus funds that has not materialized.

“They’re going to have to cut. They’re going to have to reduce personnel. They’re gonna have to reduce all the different areas they had hoped to be able to fund that they won’t be able to,” said Civic Federation President Laurence Msall.

Still, Msall is not at all surprised Lightfoot would shift $55 million in costs from the city to CPS. That’s even after declaring a $350 million TIF surplus to generate that windfall for the cash-strapped school system.

“She’s not the first mayor to push back and forth costs related to policing or garbage pick-ups or now to crossing guards at CPS. The reality is that, with a $1.2 billion projected budget shortfall, the city is scrambling to find revenue in any regard,” Msall said.

“Governments are best when the full cost of their administration is handled by those governments. So it’s not unreasonable.”

Lightfoot’s first budget was balanced, in part, by requiring CPS to reimburse the city for pension and security costs previously covered by City Hall.

At the time, Chief Financial Officer Jennie Huang Bennett argued CPS was “the only sister agency that the city subsidizes by way of pension contributions” and that it was time for the school system to “pay its own fair share.” She further argued the $33 million security reimbursement was nothing new.

From 2009 to 2011, CPS paid the Chicago Police Department $8 million a year to station two police officers at every high school for the eight-hour school day. That cost roughly $80,000 per school.

Former CPS Chief Administrative Officer Tim Cawley called it a “sweet deal” that did not reflect the actual cost — about $250,000 per high school.

Shortly after taking office, then-Mayor Rahm Emanuel stripped teachers of a previously negotiated 4% pay raise and used the $80 million in savings to pay the Chicago Police Department retroactively, going back to 2009.

That helped Emanuel solve a budget crisis, because it was roughly $70 million more than CPS originally agreed to reimburse the city for police services in schools.

In 2017, Emanuel reversed course and agreed to cover up to $80 million in security costs for CPS.

To pay for it, Emanuel used the windfall generated by sales tax securitization. That process isolates state sales tax receipts in a special corporation, using those revenues to repay investors first before making the money available for general use. The bonds are more attractive because investors are shielded from the threat of being dragged into a bankruptcy proceeding.