Overview
- Last week the Chicago Board of Education approved an amended roughly $10 billion budget that rescinded planned layoffs and counts on $150 million in state funding that has not been approved.
- Because the budget is legally unbalanced, Chicago Public Schools must seek short-term payroll loans secured by pledged property-tax receipts to ensure staff are paid and schools open on schedule.
- Superintendent Macquline King warned parents that lenders could refuse the loan and that a failure to borrow would disrupt the start of school, and 11 board members who supported the amendment asked her to temper that public messaging.
- Fiscal experts and watchdogs say lenders will likely extend tax-backed short-term loans so the school year can start but that borrowing will raise interest costs, increase the chance of midyear cuts, and could damage CPS’s credit outlook.
- State support remains uncertain because House Speaker Emanuel 'Chris' Welch plans to press for funding in the November veto session while Governor J.B. Pritzker has rejected tax increases, meaning any $150 million solution would need votes beyond Chicago.