School funding, as CPS will readily admit, falls far short of the need. The pandemic has only exacerbated that need, at the same time that our schools do not exist in a vacuum. Our most profoundly underfunded schools also are in our most historically neglected neighborhoods, where the stain of racist disinvestment and sweeping income and wealth inequality continues to harm entire communities.
Unfortunately, the mayors who control our school district have not followed the path of hard evidence and documented need. Instead, our public school policies are dictated by the political imperatives of City Hall, which continues to balance city budgets on the backs of our schoolchildren, using public school funds to plug mayoral budget holes on the city side, while the mayor’s CPS team imposes budget cuts across the district.
The reality is that every school in Chicago is underfunded. The State of Illinois concedes that Chicago public schools receive barely seven of the $10 they need to provide the bare minimum to school children. School communities with wealthier parents can offset some of the need, but for the first time in recent history, for the 2022 – 2023 school year, CPS’ annual round of austerity budget cuts hit not just the low-income Black schools that have borne the brunt of the last decade of closures and cuts, but schools across the city.
At the same time, CPS has received $2.8 billion in federal funds to support students’ recovery since the pandemic started. But school communities across the city have complained that little of that support is being felt on the ground, at the same time that they remain burdened by a per-student funding formula — the wildly misnamed “student based budgeting” imposed by the previous mayor — that only intensifies inequity.
CPS currently holds $1 billion in reserves and at least another $1 billion in unexpended and unclearly allocated federal COVID relief funds. At the same time, Chicago’s public school district is receiving a substantial bump in revenue because of tax loopholes that unions successfully fought to close.
Instead of using those ample funds to offset cuts at the end of the 2021- 2022 school year, CPS stripped 450 CTU educators and support staff from school communities, even though holding those already under-resourced schools harmless would have cost less than a half a percent of CPS’ $9 billion budget. CPS also elected to put $200 million into its billion dollar rainy day fund to placate Wall Street, instead of investing those funds to support our students in a pandemic.
The mayor has also extracted an intergovernmental agreement from the school board she appoints to begin picking up city pension costs for the Municipal Employees’ Annuity and Benefit Fund — a fund that Chicago’s mayors have underfunded for years. That insider handout to the mayor to help balance her city budget will pull $175 million from school budgets this year alone.
These distorted priorities harm school communities that have already been battered by over a decade of deep budget cuts and extreme austerity across the school district. These cuts also reflect an indifference by the leadership of our schools — the office of the mayor — to address systemic needs responsibly.
CPS cannot have it both ways, arguing that the district is barely 70% funded while the mayor’s CPS team also hoards hundreds of millions of dollars that should be supporting our schools.
A brief budget history of the last decade
The school district’s financial decisions track and reinforce inequality in our schools. As such, the only way to move forward following the COVID pandemic is to appropriately fund our schools to provide the necessary stability and predictability for recovery.
After the last national economic recession in 2008, CPS budgets enforced systemwide austerity, leading to annual layoffs of over 1,000 school personnel, increasing class sizes, and disproportionate layoffs of Black teachers and paraprofessionals. These cuts set the stage for the demand for further austerity and attacks on CPS workers, against which CTU pushed back hard with the 2012 contract campaign and seven-day strike.
But the mayor and the appointed CPS Board were not done imposing austerity and intensifying inequity. In the next few years, CPS saw the historic closure of over 50 schools — most of them on the South and West sides of the city, even while continuing to invest hundreds of millions in new construction for selective enrollment schools and school expansions and annexes in disproportionately white communities. Student-Based Budgeting (SBB) was also introduced, which amplified the link between enrollment decline and budget cuts, while the board also approved unprecedented financial givebacks to banks stemming from bad deals made in the prior decade.
From 2015 to 2017, CPS faced a major fiscal crisis caused by years of neglecting CPS structural revenue needs, increasing debt loads and bad contracts with banks, and the district’s failure to properly fund the teacher pension fund. This crisis was heightened when Republican Bruce Rauner won the governorship and embarked on a multi-year attack on the state’s public institutions, including holding the state budget hostage, and allowing local governments, school districts, and essential social services to go unfunded. Rauner, who saw public sector unions as Public Enemy # 1, took an especially sharp tack against CPS.
Rahm and Rauner fought publicly but remained ideological allies in their shared support for austerity, while the crisis in our schools deepened. Rauner attempted to use the school district’s dependence on bank loans to get through its crisis to force a state takeover of schools and to break the union. His rhetoric cost CPS access to financial markets just when it was most vulnerable, as the district was borrowing billions a year just to keep up with bills. CPS maneuvered through the crisis with more austerity, midyear cuts (including deep structural cuts to special education services), and borrowing at sky-high interest rates from the banks to push costs out into the future.
At one point, CPS threatened 5,000 plus teacher layoffs. In the midst of this crisis, in the spring of 2016, CTU organized a one-day strike against austerity and for progressive revenue. (Despite the contract having been bargained in the middle of a fiscal crisis, the 2016 contract included gains such as initiating the Sustainable Community Schools program.)
In the summer of 2017, the state passed a new education funding formula that stabilized state funding for CPS, bringing in additional state revenue and pension support for Chicago’s public schools. Legislation the previous year also had restored a property tax levy to fund the district’s teacher pension fund. Importantly, the new state funding formula, called Evidence Based Funding (EBF), meant that enrollment declines across the district would not lead to cuts in state funding for CPS. Instead the funding formula took into account student needs to establish a funding target for school districts, and the large numbers of students and communities with high-needs in Chicago meant CPS was prioritized in the formula for additional resources.
EBF and the accompanying revenue for CPS set the stage for stemming the bleeding at the district level. CTU’s contract wins in 2019 set in motion crucial gains that have led to increased staffing system wide for nurses, case managers, counselors, and new investments in Sustainable Community Schools.
But despite system-wide increases in resources, many of our Black and Brown school communities in CPS have continued to experience an erosion of resources. And even before the pandemic, student needs had outpaced resources. The growth in new positions has been far too little to offset the impacts of enrollment-based cuts that have been whittling schools down to the bone.
Charter schools
Beginning in 1997, CPS began rapidly expanding charter schools under the premise that they could offer better outcomes at a lower cost. In the city, charters predominantly serve Black and Brown students, drawn by the promise of new schools — and in many cases new buildings funded with public dollars — and by the narrative that neighborhood schools were failing environments. Over the last two decades charters grew in both enrollment and number.
However in recent years, the crises of community disinvestment, safety and affordable housing that have hit district schools have increasingly had their impact on charter school enrollment. And just as neighborhood schools across Pilsen and Little Village have been hit by gentrification and displacement, networks like ACERO Charter Schools, which serve predominantly Latinx students across the city, have seen their enrollment flatline and now decline for the first time. Even alternative schools, which also had grown rapidly over the last decade, have faced enrollment decline during the pandemic. And their operators, despite filling an essential need for students needing a second chance at high school, are choosing to make cuts.
CPS’ enrollment decline has endangered the model of many charter schools, which depend on filling seats and expanding enrollment to pay back debt and meet the needs of their students. But charters are funded through SBB, and just as with neighborhood schools, the funding is inadequate. Furthermore, the layered management structures of most charter schools mean funds are siphoned off from the classroom for other priorities, and there is little transparency and lack of oversight from the Chicago Board of Ed.
For example, Urban Prep Charter Schools, which predominantly serve Black male students on the South and West Sides, have had enormous financial failures in their management of schools, taking on millions in debt from payday lenders and banks, all while their classrooms and staff are among the most under resourced and lowest paid across the district. And one of the larger charter networks in Chicago, Chicago International Charter Schools (CICS), operates as a multi-layered bureaucracy, with each level of management siphoning funding away from the classroom.
Ensuring that charter school budgets prioritize the classroom has required new organizing, continued advocacy, and multiple rounds of strikes by unionized staff following the nation’s first charter school strike in 2018. While the first chapter of charter schools in Chicago was defined by rapid expansion, profiteering, the disruption of school actions and determined heavily by neoliberal reforms, the current chapter is being determined by its educators and school staff fighting for better standards in the classroom.
Educators in charter schools have fought for ideas fundamental to our profession and made important strides, including equal pay for equal work, a real voice in the workplace, and the need to staff schools to meet the needs of the students in those communities. But much work remains. Students in charter schools are overwhelmingly Black and Brown and yet charter staff is disproportionately white. CPS and charter operators have an obligation to ensure that charter school students get to learn from educators who look like them and understand them, especially in the face of clear research that shows that having even one Black teacher has huge positive outcomes for Black students.
To that end, CPS and charter school operators must create a pipeline of BIPOC educators, retain and develop current BIPOC educators, partner with the CTU to expand the We Care mentoring program — and begin to ensure that public funds provided to educate students actually end up in classrooms supporting our school children.
“Student-Based Budgeting”
While there is a clear relationship between the number of students in a school building and the level of resources and staff needed, in CPS, SBB has been imposed on schools that fall far short of meeting students’ baseline needs, where enrollment and population decline are mapped onto a segregated and racist housing and school choice market, and where communities face traumas from violence and disinvestment. SBB has become synonymous with the death spiral that grips schools when enrollment declines trigger budget cuts, creating a system where the schools serving the neediest students have the least amount of resources to do so. CPS is well aware of the inequities this formula has created, and, prior to the pandemic, declared its intention to reform the allocation formula.
Be clear: The discretion offered by a school funding formula based on dollars instead of position allocations is only empowering if there is enough funding available so that schools are not forced to make difficult decisions over essential school needs. Schools in well-funded communities are not being forced to choose between a reasonably sized classroom and an arts teacher. Not so in Chicago.
“My son’s school hasn’t had a librarian for seven years,” Lori Torres, Spanish language teacher, PreK to 8th grade
School choice, privatization, and corporate school reform proponents flexed their influence as school districts across the country adopted formulas where “money follows the student.” But their motivations were grounded in their beliefs that resources did not make a difference to school performance, that public schools cost too much and that privatization would be cheaper and improve outcomes. These right-wing beliefs found a receptive audience across underfunded school districts, particularly those operating under mayoral control.
While the pushback against the harms of corporate school reform over the last decade has largely won the wider narrative — that resources matter — policymakers have failed to raise the revenue needed for our schools. The disruption brought by the pandemic has led to enrollment losses in public schools across the country, plunging schools back to austerity. In CPS, the most recent round of cuts saw the kind of impact we had seen for years in the South and West sides touch some traditionally well-funded North Side school communities, as well as devastate Latinx neighborhoods newly experiencing population decline.
Just a little over $2 billion is distributed through the enrollment-based allocation formula in CPS, about a quarter of the $8 billion operating budget. But according to state funding formulas, CPS is $1.8 billion short of funding adequacy. With such a large gap, the kind of adjustments needed to fully resource our schools require real revenue infusions, not just formulaic changes. Adequacy would mean essentially doubling the amount of funding distributed through SBB. However, there are improvements CPS can make to its funding system now:
- A real hold harmless policy for low income schools. The CPS “equity grant,” which is directed to small schools with declining enrollment, has not been enough to offset the formulaic SBB losses from enrollment decline, especially in the last few years of the pandemic. Additionally, schools must compete for CPS equity grants, and many have been denied. In addition, equity grants fail to provide discretionary funds that a school can use as needed, or stable funding that allows schools to maintain services and supports over the long haul. This year CPS invested $50 million into these grants. Adding another $40 million would have offset the enrollment-based cuts this year.
- The current SBB allocation gives every school three base positions: a principal, a counselor, and a clerk. SBB allocations to every school should be expanded to include:
- A full-time school nurse available to all students.
- A full-time social worker available to all students.
- A full-time librarian in every school.
- A full-time technology coordinator in every school.
- Librarian funding should be a core allocation. Currently fewer than 100 schools have a librarian. Another 400 positions would cost $40 million.
- Adding a dedicated tech coordinator for every school at a cost of $35 million.
- Adding arts positions so there are at least one to every 350 students, a standard set by the district’s arts partner. This would require 100 arts instructors at a cost of $10 million.
- Increasing foundation counselor positions to support at least one counselor for every 250 students instead of the one per school baseline. This would require another 282 counselors hired across the district, at an additional cost of $28 million.
- Adding a school-level social worker position so that every school has a dedicated certified mental health practitioner at a cost of $50 million.
- Increasing the number of Sustainable Community Schools from 20 to 200, at an additional annual cost of $90 million.
These investments into the foundation formula would total approximately $300 million. In the last few years, CPS has lost $200 million in annual funds through cost shifts that the mayor, who appoints the CPS Board, has been able to extract from her appointees. Further, CPS has added to its fund balance in recent years, accumulating over $1 billion in surplus. The district can afford to make these investments.
“My daughter got great support at a CPS school, but most schools don’t have that,” Paula Barajas, Special education teacher, Ruiz Elementary
In addition to these increases, CPS can improve the distribution of available resources by adopting other features of the statewide EBF formula. Those must include using adequacy targets for each school and adding substantial weights to per-pupil funding so that more funding goes to schools with high poverty and to school communities experiencing housing insecurity and trauma.
The adequacy gap and a post-pandemic recovery budget
State adequacy gap
Despite the improvements to education funding enacted by the state in 2017, the lack of sufficient new revenue for education means that resource levels remain deeply inequitable. Since EBF distributes new funding through its formula, it requires additional resources to drive equity. Fully funding the EBF would require an additional $4.8 billion in statewide resources. For CPS, this would mean $1.8 billion in additional funds. The state has provided funding above and beyond the minimal required annual increase of $350 million only once since the law was enacted in 2017 and failed to provide even the minimal increase in 2021. At the current pace, it would take until 2036 to fully fund schools and, when accounting for inflation, until 2041. To meet the statutory deadline of 2027, the state would have to appropriate triple the annual increase.
“How do you not invest in our students?”, Dave Stieber, Social studies teacher, Kenwood High School
FY23 budget and federal pandemic relief
CPS has received $2.8 billion in federal funding through the Elementary and Secondary School Emergency Relief Fund (ESSER) since 2020. In the summer of 2021, as the district planned the budget for the 2022 school year, school communities demanded more federal resources for their schools in order to hire full-time staff and meet the burgeoning mental health needs of their students, who would be returning to a year of in-school learning. When confronted with the paltry amount going toward new full-time positions, CPS Board President Miguel del Valle raised the specter of a “financial cliff” as an excuse to avoid staffing up in what should be a recovery year. Further, the district failed to bring in even the promised level of programming to schools, with records showing that 70% of the budgeted ESSER funds went unspent through the spring.
With such an influx of funding, no schools should be facing cuts. Yet, the budget released for the 2023 school year has upwards of 40% of schools confronting cuts due to declining enrollment. The district plans to spend up to $730 million in ESSER funding this upcoming year, but the amount budgeted for frontline mental health supports, trauma interventions and additional counselors is just $26 million.
Along with the influx of federal funds, CPS also has seen large increases in property and corporate taxes, with CPS expecting to end the FY22 budget year with a surplus of $229 million. CPS is adding this surplus to its fund balance, bringing its total reserves to more than $1 billion, the highest in over a decade. The district should invest that surplus in the classroom, which would allow it to still maintain a 10% reserve fund, while adding crucial resources like social workers and librarians.
CPS and the City of Chicago budget
Since 2020, the City of Chicago has shifted over $380 million in costs to the CPS budget. These cost shifts include $15 million annually for crossing guards, and a steadily rising annual payment for the Municipal Employees Annuity and Benefit Fund (MEABF) that is now $175 million for the current fiscal year. The MEABF payment is historically, and legally, a responsibility of the City of Chicago, and the rising costs of the pension fund are due to the city’s chronic and deplorable history of failing to make appropriate contributions. Additionally, CPS has agreed to contracts with the Chicago Police Department worth a total of $44 million since then. During a pandemic, the city has seen a total of $425 million in costs paid for by the school district, while the appointed CPS Board also has enacted cuts and slow walked investments for the classroom.
Addressing the revenue gap and the needs of an elected school board
While the district’s finances have improved since the fiscal crisis of the Rauner years, the needs and inequalities that have been amplified by the pandemic underscore how great the adequacy gap in CPS still is. Meanwhile, the City of Chicago has failed to provide the services desperately needed by its residents, and Mayor Lightfoot has cobbled together budgets that have depended on shifting costs to the school district instead of raising sufficient revenue. And while both the district and the city can do far more with the federal relief they have received — the city has spent 60% of federal pandemic funds on police — that federal relief is set to expire within the next two years. As CPS transitions over to a fully elected school board by 2027, it is crucial that the adequacy gap is addressed with new revenues, and local, state, and federal revenues must all be part of the picture.
Locally, the city must seek additional revenue to support the MEABF pension payments. If the city expects the district to pay for the city’s past failures, the city must pass revenue authority along with the costs. Otherwise, the Board should reject making payments that the city is legally required to make. Local revenues must also be raised to expand the Sustainable Community Schools initiative and to expand the availability of health resources in our schools. An elected school board without any expanded revenue raising capacity cannot fulfill the needs of our school communities.
“My school is shortstaffed,” Dr. Denita ArmstrongShaffer, Prek teacher
Statewide, school districts have nearly a $5 billion annual adequacy gap. The progressive Fair Tax proposal rejected in the 2020 election was estimated to bring in roughly $3.6 billion a year. That proposal lost, in part, due to a $54 million misinformation campaign funded by billionaire hedge fund boss Ken Griffin. But there are other ways to raise revenue from the rich. California and Washington state have considered wealth taxes on billionaires in the range of 0.5% to 1% of wealth. The state also can increase the estate tax for wealthy properties and lower the exemption amount from the current $4 million threshold or raise the real estate transfer tax on expensive properties such as through a “mansion tax.”
While our underfunded public schools are overwhelmingly serving Black and Brown students, wealth continues to be incredibly concentrated and racially disproportionate. A federal study found that the average net worth of white families was over seven times greater than Black families, and six times greater than Latinx families.
The ESSER III legislation, which brought $1.8 billion to CPS in 2021, provided over $122 billion in funding to school districts across the country. These funds are authorized to be spent through 2024. But the pandemic’s impact will last far longer for our schools and communities. Federal education funding must continue to be elevated to address the mental health, social, and academic needs of our students.
