July 24, 2013
Chicago Public Schools (CPS) today released its proposed operating budget for Fiscal Year 2014 (FY14), which combines nearly $700 million in one-time reserves and $112 million in central office, administrative and operations spending reductions to fill a historic $1 billion deficit driven largely by an additional $405 million pension payment. The FY14 budget maintains commitment to provide a high-quality education for every student in every neighborhood, including the Full School Day and expansion of early childhood, Full Day Kindergarten, IB and STEM programs. While critical programs have been protected this school year, this budget reflects one-time fixes that are not sustainable for future school years.
The proposed FY14 operating budget was presented today at the Board of Education’s monthly meeting.
“This budget proposal protects critical investments needed to ensure a high quality education while reflecting the financial realities of a district facing a $1 billion budget deficit. By reducing central office, administrative and operations spending, we are minimizing the impact on our schools as best we can,” said CPS CEO Barbara Byrd-Bennett. “We will continue to fight for every dollar and resource for our district and we will continue to push for reform in Springfield so that instead of spending hundreds of millions more on a pension system in dire need of reform, we are investing these dollars in our classrooms.”
In addition to the $405 million pension increase, this year’s historic deficit was driven by flat or declining revenues and contractual salary increases. Given that pension reform has not yet been reached in Springfield, CPS’s pension obligation will rise from $208 million in FY13 to $613 million in FY14.
CPS will also rely again on steep reductions to central office, administrative and operations spending and the use of $697 million in one-time reserves to close the deficit. The District has reduced central office-directed spending by nearly $700 million since 2011, including $112 million in cuts for FY14. Without these reductions, the District’s deficit would be even higher.
These one-time reserves will not be available next year when CPS begins work on its FY15 budget. Projections indicate that continued increased pension and contractual salary costs and flat or declining revenues will result in deficits of more than $900 million in both FY15 and FY16.
CPS’s top priority throughout this year’s budget process has been to protect investments in student learning as possible while balancing the budget as required by law. The District remains committed to improved outcomes districtwide and delivering a high-quality education to every student in every school. These goals are supported by CEO Byrd-Bennett’s five pillars of CPS’s plan for the future:
- High standards, rigorous curriculum and powerful instruction;
- Systems of supports that meet all students’ needs;
- Engaged and empowered families and communities;
- Committed and effective teachers, leaders and staff; and
- Sound fiscal, operational and accountability systems.
The proposed FY14 operating budget will be made available for public comment and review. The final budget is expected to be presented to the Board for a vote at its August meeting, currently scheduled for Aug. 28. For additional information on the FY14 operating budget, please view CPS’s budget overview presentation at http://www.cpsboe.org/.
Chicago Public Schools serves 403,000 students in 681 schools. It is the nation’s third-largest school district.