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Chicago Public Schools Faces Midyear Cuts as Special Education and Loan Costs Overshoot Budget by $27M
Chicago Public Schools has already blown through its special education contingency budget by $27 million and faces a $150 million state funding gap, with layoffs of 281 rehired staff possible as early as Dec. 1 if Springfield doesn't act during the veto session.
Chicago Public Schools has overspent its special education budget and emergency contingency fund by $27 million just months into the school year, one of several compounding financial pressures that could force midyear classroom cuts if the district does not secure additional state funding during the legislative veto session that begins Tuesday.
District officials say the special education overrun is compounded by higher-than-expected interest payments on short-term loans used to make payroll and $19 million less in state funding than anticipated. Those unexpected costs do not include the 281 staff members â 128 teachers and 153 support staff â that the school board rehired this fall at a cost of $29 million, a move championed by board members aligned with the Chicago Teachers Union.
That controversial budget amendment counted on $150 million in state money that had not yet been committed. District officials are already planning to lay off those rehired staff again as early as Dec. 1 if no additional funding materializes, according to a memo obtained by the Chicago Tribune.
CPS has not yet said how it will absorb the other cost overruns. "The CPS Finance team is closely monitoring our budget, assessing implications of rising costs and a shortfall if no additional state revenue is received, and identifying potential solutions," district officials said in a statement. "CPS will continue to keep our Board and community apprised of any additional financial savings that will need to be enacted this school year."
The district is also counting on the city to divert $285 million from tax increment financing districts to the schools. Mayor Brandon Johnson's budget includes that revenue, but the City Council has not approved it, and some aldermen have balked.
The Chicago Teachers Union, in a message to members Friday, said laying off staff would create chaos and argued that rehiring was never the district's most urgent financial problem. CTU leaders pointed to the state's funding formula, which they said shortchanges Chicago and other districts across Illinois.
"Before CPS reversed one layoff at the beginning of the school year, the district was already coming up short because of the Governor and the Illinois General Assembly's skipping its payments to Chicago and other districts across the state," the union told members.
CPS leaders, board members and members of the CTU and other major school unions plan to travel to Springfield during the veto session to lobby for more money. But the odds appear long. House Speaker Chris Welch said this summer he was open to additional funding, but he will be a lame duck during the session after deciding not to seek his leadership post again. Gov. JB Pritzker has repeatedly said additional money is "not going to happen."
Any state package that could pass would likely need to include far more than what CPS needs â and money for other underfunded districts â to gain traction, making it a costly proposition. That means Chicago leaders will have to win over legislators from outside the city, some of whom have expressed skepticism about sending more money to Chicago schools.
Chicago is not alone in seeking relief. The Illinois Federation of Teachers this month called on lawmakers to add $670 million for education during the veto session, including $400 million for general state aid and $100 million for mandated services such as transportation. Arnoldo Fabela, the union's director of field and organizing, said the money would not close the statewide funding gap but would provide "urgently needed relief and help."
Illinois overhauled its school funding formula in 2017, establishing an adequacy target for each district. The state has fallen far behind on meeting those targets. Of about 940 districts, 714 moved further away from adequacy this year, even as overall education funding has risen under Pritzker. CPS now receives only 70% of what it needs to provide an adequate education, down from 73% last year and 79% the year before.
The district is spending nearly twice as much on special education as it did in 2019, with too little state and federal support pushing much of that burden onto Chicago taxpayers. CPS also faced a $732 million deficit this year before the board approved a budget that relied on the uncommitted state funds.
For families and staff, the immediate stakes are concrete: whether hundreds of rehired teachers and support staff will be laid off again in a matter of weeks, and whether the district can avoid deeper midyear cuts to classrooms as costs continue to mount.