Chicago

CPS takes another budget hit, loses $30M in expected state funding

A change in state funding has caused Chicago Public Schools to lose almost $30 million in expected state money, representing yet another financial hit as district officials warn of ramifications in both the near and distant future.

In a surprise move Friday, the school district, Illinois’ largest by far, was dropped into the second tier of financial need — a move that comes with a corresponding reduction in funding. The change is due mostly to CPS losing enrollment and, specifically, students from low-income backgrounds.

The move was revealed when the state’s Board of Education released its calculations that determine how it will distribute money to school districts for the new school year. The distribution is based on how close each system is to providing what the state has determined is an adequate education for students. The formula takes into account a number of factors, including the number of students, what it would take to educate students living in poverty and the number of English language learners.

City officials had thought CPS would continue to be seen as one of the neediest school districts in the state, as it long has been, classified in the “Tier 1” category. According to CPS’ budget unveiled earlier this summer, the district was anticipating “remaining in Tier 1 for the foreseeable future and receiving an additional $50 million in tier funding in FY2023.”

CPS spokeswoman Mary Fergus said Friday that officials understand the tiers are set in state law, “but any anticipated lower-than-expected funding from the state puts more pressure on our system at a time when our needs have never been greater.”

“Public schools are serving a wider scope of needs than ever before as we emerge from the pandemic and we need all the resources we can get,” Fergus said.

Allison Flanagan, associate director at the Center for Tax and Budget Accountability, said CPS had been moving closer to getting a smaller proportion of new state money.

“What I will say is that this is not unexpected, but sooner than we thought,” she said. She and other experts say they did not anticipate CPS was losing so many low income students, and point to that loss as the reason for the funding drop.

CPS still gets $27 million in new state funding this year, part of $300 million of new state education funding for more than 900 public school systems, but it’s a cut of $29.6 million from new funding last year.

The district is also receiving a bump in state tax replacement revenue, but officials had already accounted for that increase in the district’s new budget.

Still, the state is sending nowhere near enough money for CPS to properly serve its students. The state acknowledges CPS would need another $436 million to be fully funded under its metrics. Some experts say it will take nearly 20 years of gradual increases for all schools in the state to reach the appropriate levels.

The Chicago Teachers Union said CPS continues to be “extremely under-funded” and called on the state to “move quickly [to] put more money into evidence-based funding so that every school across our state receives the resources it deserves. CPS is one of hundreds of Illinois school districts that is 30% underfunded.”

One reason officials were so confident CPS would remain in the highest-need tier is that legislators passed a bill this year discounting the 2020-21 school year’s enrollment when most districts saw drops. Still, according to the state calculations, over three years, enrollment at CPS is down by nearly 3%, with the number of low-income students down by 4%.

Perhaps the only silver lining is the state now calculates CPS is getting closer to providing an adequate education for all its students. The district moved from 67.8% to 74.6% adequacy.

Robin Steans, executive director of Advance Illinois, said a state committee is looking at altering the funding formula to take into account things like race, concentrated poverty and trauma . She said looking at these factors could help CPS. But there’s still a lot to figure out, such as how the state would measure student exposure to trauma.

The loss in state funding this year will impact CPS for years to come, since it will lower the district’s base funding amount. The state has pledged that school districts will get at least the same base amount year over year, but the cut means CPS’ base amount isn’t going up as much as expected.

The hit comes at the same time CPS is paying back $87.5 million it accidentally received in state funding in years past, plus losing $45 million because of a correction to the state formula.

Sarah Karp covers education for WBEZ. Nader Issa is the Sun-Times’ education reporter.



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