CPS needs backup budget, fiscal watchdog says

Chicago’s leading budget watchdog Tuesday praised the Chicago Public Schools $8.4 billion spending plan for fiscal 2021 but said doubts about federal funding will force the system to have a backup plan.

The Civic Federation said the budget relies on $343 million in federal help that hasn’t been approved by Congress. CPS received $206 million under the federal CARES Act, but negotiations for additional support to state and local governments dealing with the pandemic have broken down.

Federation President Laurence Msall said the CPS budget was reasonable given the current health and economic crisis. “However, the uncertainty of relied-upon federal funding, among other contingencies, means that the district must publicly present a comprehensive Plan B so that parents, staff and the public know what to expect if any of the proposal’s elements does not fall into place,” Msall said.

The federation said CPS has not released details about how it would close a budget gap, but primary alternatives are tapping reserves or cutting expenditures.

In addition, the system hasn’t been able to get an increase in state aid because Illinois’ fiscal 2021 budget held flat the spending for elementary and secondary education.

CPS also has acknowledged that its property tax revenue could be reduced because of the economic closures due to COVID-19.

“Despite considerable financial, educational and transparency gains over the last several years, CPS finds itself in a tough spot largely outside of its control,” Msall said. “While the federation recognizes this reality, the district does have the wherewithal — and responsibility — to explore other paths forward and to justify those paths to Chicago taxpayers.”

The federation also recommended that CPS explore potential savings from consolidating its pension funds with that of the suburban and downstate Teachers’ Retirement System.

The proposed CPS budget is up 6.9% from last year’s plan after it was amended to account for a new contract with the Chicago Teachers Union.