By: Mark Glennon* and John Klingner
Massive deficits loom at Chicago Public Schools despite billions in recent federal bailout money, persistent property tax increases, plummeting enrollment, empty schools and abysmal outcomes for students.
CPS officials recently sounded the alarm and asked for more state funding to cover what they estimate to be a $628 million deficit for the 2025-26 school year, growing to $750 million soon after.
We won’t have a full handle on how dire CPS’ fiscal situation is until later this month when draft budgets are likely to be released. For now, consider those pending deficits in light of the facts below.
This is a hopeless trajectory:
The federal government handed out $2.9 billion in “pandemic relief” to CPS over the past two years, which was in addition to other normal federal assistance. Nearly half of that money remains unspent. That money came to CPS under the “ESSER” grants that were part of the American Rescue Plan.
Credit school district CEO Pedro Martinez, however, for at least being honest about how federal bailout money has helped. While many officeholders have been taking personal credit for improved fiscal conditions, Martinez said this: “These issues have been papered over by federal support, but we need to confront them head on.”
Chicago has been an outlier among high-poverty districts in spending a large portion of its federal COVID relief dollars on salaries and benefits, largely for positions that already existed when the pandemic hit. That’s from Chalkbeat Chicago. Crains adds: “But beyond the broad categories, the state data offers little detail on what exactly districts bought with the money. And it doesn’t answer key questions, such as whether salary and benefit spending is for new or existing employees.”
CPS’s per student spending is an astronomical total of nearly $30,000 per student per year, a 40% increase in four years. That includes federal, state and local sources and the district’s capital budget. Here’s the breakdown:
Student enrollment at CPS has been plunging for years. Enrollment has collapsed by more than 100,000 students since 2001, or nearly 25 percent.
CPS total spending has soared year after year, growing to a record $9.4 billion in 2023.
Total property taxes collected for CPS soar year after year. The district’s property taxes have more than doubled since the turn of the millennium, growing to $3.1 billion from $1.5 billion in 2000. From the Civic Federation:
More than one-third of Chicago’s 473 traditional public schools are currently running half empty or worse. Its 20 most-empty schools are operating at 25 percent or less capacity, with the worst less than 10 percent full.
CPS’ pension crisis will continue to worsen. At 46 percent funded, CPS’ pension system has less than half the money it needs on hand to pay out future benefits. The situation will only get worse as the system’s shortfall continues to grow. CPS’ current unfunded debts of $14 billion are expected to grow to $16 billion and remain that high for the next two decades despite growing taxpayer contributions. From the fund’s most recent actuarial report:
And all for worse and worse results. Just 11 out of every 100 black students in CPS could read at grade level in 2022 and for Hispanics it was only 17 of every 100. For the entire district, just 20 out of every 100 students could read at grade level. (The results for math are significantly worse across the board.)
*************
Throwing more money at CPS to fill its pending deficit will be madness. There are only two rational alternatives, both of which should be taken but neither of which can be expected from our political establishment: 1) school choice, and 2) entirely reconstitute the school district.
*Mark Glennon is founder of Wirepoints.
Read more from Wirepoints:
- Wirepoints expands its Report Cards to all 850 Illinois school districts.
- Wirepoints’ testimony to the Illinois House Committee on Ed Appropriations: Accountability, not funding, is the core problem with Illinois education
- Why can only 6 of every 100 Chicago black students do math at grade level? Chicago Mayoral candidate Brandon Johnson offers some clues.
- Chicago Public Schools implicitly endorses ‘looting and burning’ as a form of equity
Expect no retraction or apology. This what they do.
The state’s existing buyout program for its own pensions is the precedent for Chicago, which should be a warning: Look out for similar exaggerated claims and shoddy analysis.
Meeting tonite at the Mystic Knight’s of the Sea Lodge, Algonquin J.Calhoun, Esq will be
Explaining the City of Chicago bankruptcy filing. Refreshments will be served.
Same old stuff from the CTU, they demand smaller class sizes and need more money.
The truth is the CPS could easily absorb all earned income statewide (note I said “earned income”, not tax revenues) and still claim to need more money and maintain the same shameful results.
Also, the return expectations on the CPS pension fund are delusional, but, if they lowered them to realistic market levels they would need even more operating funds to pay those obligations increasing the depth of this hole…. Too funny…
Close the CPS and test scores will go up.
Time to start having a bake sale every day!!
The only rational response should be solid NO!
But as George Carlin once said” We don’t have time for rational solutions!”
Why was this story not published during the runup to the mayoral election when it might…just might have given some residents a reason to rethink their choice?
Wirepoints has published many similar stories on a regular basis for several years. Chicago voters have had enough time and information to rethink their choice. They prefer to believe the fantasies spun by the CTU – that the trough of public money will always be replenished to quench the insatiable thirst of those who drink from it.
The bigger question is why hasn’t Tribune, SunTimes, Crains, ABC, FOX, NBC, CBS or WGN run anything like this ever. Chicagoans are beyond ignorant and being kept dumb on purpose. Maybe just maybe if the talking box told them there’s a problem they’d wake up. At this point it’s a lost cause. Let them triple the taxes and I hope every slob in the city loses half or more of the value of their homes or gets mugged. Its the only justice. Well there is one other justice, IL is allowed the first state bankruptcy and parasites like PPF get… Read more »
I’ll get mine alright. Every month, with a 3% increase every January.
PPF – your comment reflects why a myopic focus on pensions is not helpful, although I understand your personal interest. Where is CPS going to get 628M in 20 months, and 75OM the year after? And it is a sure thing enrollment will continue to decline. One would guess Johnson wants to raid the police coffers, but that will come at a painful price. Except for property tax increases, most of his other tax increase proposal require legal authority participation beyond his control, and even if passed won’t bring in revenue timely. How does per pupil expenditure from from 20k… Read more »
Expenses will need to be cut where allowed. As you’ve noted, per pupil expenditures are up drastically. Massive cuts will be coming to schools, police and other administrative services regardless what any elected Mayor wants. Possibly even a bankruptcy but as noted in other posts, any pension cuts will be minimal by comparison to other cuts. Bankruptcy also needs Springfield approval just like the other tax increases that you’ve noted. Somehow I think a Dem legislative branch and Governor will approve tax increases or additional funding well before allowing Chicago to go bankrupt. Why do you think Chicago business leaders… Read more »
Grifters, every last one of them. They all know they’re grifters too. Most don’t expect to receive their full pensions either.
Receiving a pension from the city is not a grift. It is a condition of employment , on the cities part, The city is still offering these pensions to all new hires. So why hasn’t that changed? And the reality of the situation is that Police and Firemen actually pay into the pension systems. They are required to fulfill their conditions of employment(Live in the city) so the city needs to uphold its own conditions of employment (a pension)! Cut the schools budget particularly since they have obviously failed at their primary tasks. Stop with the sanctuary city give aways… Read more »
The name calling does not help. But pointing out a small percentage of the population is putting the state under severe financial stress is not name calling. You can blame the politicians, but since many of them are elected by virtue of union support, that blame rings hollow. I don’t understand how the Democratic politicians who run Springfield would ever permit Chicago to enter bankruptcy. They would spin it as the rich not paying enough, but the fact of mismanagement would be an admission in virtually everyone’s mind, including yours. Facts and details matter. Chicago has given liens to its… Read more »
“The name calling does not help. But pointing out a small percentage of the population is putting the state under severe financial stress is not name calling.” Pensioners are not putting the state under severe stress. The state offering pensions and not putting the money aside did that. Teachers, police and firefighters traded their labor for compensation that was agreed upon. The voters have supported this with each and every election. Look no further than amendment 1 passing to fully understand that voters have done this not the working middle class public employee. Facts and details do matter. You and… Read more »
Your contract rights do not supersede the requirement for a balanced budget. If your income is based on an unconstitutional state budget, then it is void.
You surely are not so naive as to think that argument has never been made through all these decades of political chicanery are? I have to presume that your argument has been made many times in the courts with no obvious positive result. Anybody know the history of this topic in the courts? I think we’ve come to believe that loans taken by any government can, indeed, “balance” the budget. Apparently the IL Constitution doesn’t state otherwise.
The contract is void? lol. Where did you hear that Aaron? Can you quote one case before ANY court in the land the agrees with you? I’m just kidding clearly you have no idea how contracts and government budgeting works. Also, the budget the state passes isn’t unconstitutional. The legislature (think Edgar ramp) decided that pension funding would be based on the amount they decided not an actuarial determined amount. This allows the state to appropriate less money towards pensions. So even though the budget is not structurally balanced, it is for purposes of the law. Also, I suggest you… Read more »
My experience in a large urban area (where the government remains controlled by public employee unions and Black clergy) is that unions acquiesced in reduced pension contributions to enable pay raises for employees. Further, public employee unions nationwide were in constant communication about schemes such as 13th checks and adjustments to actuarial assumptions to hide this from voters. I assume Chicago and other Illinois places were part of the network that educated union members on how to screw the taxpayers. YES the actuaries and bond lawyers and accountants and consultants were fully informed about this but their annual fees were… Read more »
Thank you for the clear explanation of the method by which public unions made sure that taxes paid for future pension obligations were diverted into their own pockets. And some of their members have the audacity to claim that the taxpayers are the thieves.
The problem with your comment JimBob, is that you completely ignored the fact that pensioners sued to have their pensions actuarially funded and the courts told them they have no such right. Why would they seek a remedy from the court that would inhibit them from getting more in the next contract? Pay raises would happen regardless. Yes actuarially funding pensions would have put pressure on government to spend less elsewhere but the idea that salary increases would be less or wouldn’t happen is pure speculation as they could have also increased taxes. If the voters are unhappy with this… Read more »
It’s always the same old story: people here, there and everywhere demand more from the government while simultaneously complaining about the taxes they pay already. Now, how in the world are both to be accomplished in any meaningful way simultaneously without giving up something equally significant to make it happen? Generally speaking you can’t as a society have it both ways!
I agree, you can’t have your cake and eat it too.**
** Unless you are a member of the teacher’s union. In that case, you can get step raises, taxpayer funded advanced degrees to get lane raises, and pension pickups. Don’t worry, the pensions will still be paid, and best of all, they are increased according to how much cake you can grab.
You likely remember various commenters here not so long ago would deride Pres. Trump as a person and as the President and call-out any person doing that as having TDS. I think you and other so negatively fixated on the topic of public employee pensions in such a repetitive and derisive manner that you have some cousin of the TDS, perhaps called something like PEPDS, public employee pensions derangement syndrome. You’re not alone in that, but the people so fixated on that issue share that malady, whatever one should call it. When any of you read or hear any topic… Read more »
OK, I will await any rebuttal of what I actually wrote.
It’s a wasted effort on my part. Your mind has its course on auto-pilot on that topic. All I want to say beyond that is those who wish to be newbie public employees generally have to accept or reject contracts negotiated to a large extent on issues and standards others have already determined. That means reps from both sides have determined how you will be compensated, what benefits apply and how your eventual retirement will fare.
Clever union lawyers get paid twice. Once to negotiate the contract and then again to sue for more to fund the plan actuarially. All fees paid from pension fund assets, of course. You think rank and vile union members have any voice in whom the lawyer sues? In the system I mentioned the plan paid its lawyers to oversee Wall Street lawyers who were covering the case for multiple systems. The hotel bills and air fares to sit silently in depositions waiting for lunch breaks and dinner at Four Seasons were almost as large as the bond lawyers charged at… Read more »
I agree that the voters voted for this as you have stated many times before but I would like to see a breakdown of “who” the voters are/were. Are most of them recipients of the proposed legislation or the general public where most of them were kept in the dark. Here is an article from Forbes detailing how the 1970 constitution was ratified. https://www.forbes.com/sites/ebauer/2020/01/08/what-the-illinois-supreme-court-said-about-pensionsand-why-it-matters/ The constitution was ratified by vote of 57% with a turnout of 37% in a special election in December a few weeks before the holidays. How many of the 37% who voted for the new constitution… Read more »
Elections in Illinois have always been full of shenanigans. This one was no different.
In 1960, Kennedy won Illinois by just 8,858 votes out of 4.8 million cast.
Daley promised to give Kennedy the state. And he did.
IL hasn’t been a functioning Democracy in a long time. Occasionally, the voting system works, but more often than not, Democrats get their act together to cheat the system.
I read that article. What’s the point? Are you suggesting that election results don’t matter if there was low turnout or people that voted would benefit? Doesn’t count because the internet didn’t exist? Not really sure I get your point.
We have the internet, extended voting, mail in voting and amendment 1 still passed. Yet people complain that the voters didn’t know what they were voting for. Voters own the government that they keep electing. They don’t get to play victim.
Lol.
Guvnah JB and Mayor Social Worker, watch the flight, that started to accelerate under JB/LL, increase…. The few remaining makers are going to wash their hands of this state of takers. Enjoy your race to oblivion.
The suburbs and downstate need help from Springfield also!
“We are failing teachers that you can’t afford. Help us!” Said the teachers who are still paying for their vacation home in Florida. “Democrats in Florida need your support.” “Turning Florida blue one Marxist at a time.”
It would seem a gigantic problem is no politician in Chicago or statewide is saying anything about what revenue source is going to replace all the fed covid $bucks$ that will be gone in a year in education. With all Illinois gaurenteeted/ not to be diminished public sec laws, Amend 1, etc to think we could reduce those covid bonus salaries? Cut the covid added staff?– FORGET IT!!! Get ready for massive covid funding replacement tax….especially w CTU/Brandon in charge. What are other states planning?
there will be a new version of covid soon. Too profitable for the blue states to not go to the well again.
Yep, and if you think inflation is high now wait until round 2 of federal “help.”