CPS looking to move away from student-based budgeting, CEO Martinez says

Chicago Public Schools CEO Pedro Martinez said the school district plans to move away from student-based budgeting in the coming years.

Martinez shared these plans during a virtual briefing Tuesday outlining CPS’ school budget for the 2023-24 school year. The school-level budgets represent the money the district gives principals to use for their schools.

The budgets, which are set to be finalized and approved over the summer, represent around one-third of the district’s total $9.4 billion budget. They include an infusion of cash from federal COVID-19 relief funding.

Between the current school year and the next one, CPS will have added nearly $400 million to school budgets since the pre-pandemic days. The federal funding is set to run out during the 2025-26 school year, when a massive deficit is projected to emerge.

Martinez said the vast majority of schools, 82%, will see increases next year. But the remaining 18% could see cuts because “the resources have to follow the children” under the district’s per-pupil funding model, Martinez said. Those adjustments will largely follow shifting special education enrollment because of graduations, transfers and new enrollments, he said. But CPS will work with the schools facing cuts to ensure they have enough funding to meet their students’ needs.

The Chicago Teachers Union is concerned about the potential for budget cuts.

“No school should see cuts in the coming school year. Yet, we remain concerned that the district’s current budgeting framework — student-based budgeting — places the schools most in need at the highest risk of losing out,” a Tuesday statement from CTU reads.

Student-based budgeting, which assigns funding to schools based on enrollment totals, has come under fire since its introduction a decade ago for exacerbating inequalities in the public school system. Under-enrolled schools often serve poorer areas with predominantly Black and Latino students. As those buildings lost students, they subsequently lost funding. CPS has seen declining enrollment for a decade.

Martinez said CPS wants to keep moving toward a system based on student and school needs. During the 2023-24 school year, the portion of the budget allocated based on school enrollment will decrease to 43%, he said.

“I am optimistic that over the next year or so, we’ll have enough knowledge to be able to fully go away from SBB,” Martinez said. “But again, we just don’t want to rush it.”

CPS will continue to take enrollment numbers into account for school funding, Martinez said. But he added that CPS understands “a purely enrollment-based funding model shortchanges smaller schools.”

Over the past couple of years, the district has aimed to fund core priorities at every school, regardless of enrollment. That continues this year with a focus on core academic and social-emotional priorities, as well as out-of-school activities and mental health support.

CTU stated that it wants to see a school nurse, social worker and appropriate paraprofessional supports in every school, as well as a plan to modernize school facilities to ensure all buildings have working HVAC systems.

Mayor-elect Brandon Johnson, a former CPS teacher and a Chicago Teachers Union organizer, opposed student-based budgeting on the campaign trail, promising instead to fully fund and resource all public schools — a plan that would require additional state or federal funding.

“I’m looking forward to working with the new mayor,” Martinez said. “I think we’re going to have a champion that’s going to help support us.”

The district will face a structural deficit of $628 million after the federal pandemic funding runs out during the 2025-26 school year. Martinez said he hopes Johnson will fight for more funding for CPS in Springfield.

Martinez said CPS faces “significant inequities” in terms of how Illinois treats the school district. Based on the state’s formula for school funding, CPS should be receiving $1.4 billion more than it is currently, he said.

CTU said it is looking forward to working with CPS to close this funding gap, according to the organization’s statement.

Principals will be able to access their initial school budgets starting Wednesday. CPS will work with principals to make tweaks by early May. The Board of Education is expected to vote on the district’s overall budget by the end of June.