Chicago Public Schools Sinks Further Into Debt
Chicago Public Schools is sinking further into the red, with debt payments now topping $1,600 per student, budget documents released last week show.
CPS owes $8.6 billion — a 28 percent increase compared to the end of last school year when it was $6.7 billion. That dwarfs CPS’ total annual operating budget of $5.7 billion.
The school district this year will commit about $600 million to chip away at that debt, plus an additional $784 million for a teacher pension payment. All told, that adds up to nearly $1.3 billion of CPS’ $5.7 billion budget that won’t be spent on classrooms.
On a per-student basis, that’s $1,600 per pupil for debt and another $2,100 for pension payments, bringing the total CPS spends outside the classroom — and not on teacher salaries or academics — to $3,700 per student.
“What we have seen last year, and now this year, is that the district is taking on short-term and long- term debt just to get through the fiscal year, just to pay their bills,” said Bobby Otter, budget director with the Center for Tax and Budget Accountability.
In the past, borrowing was mostly used only to build new schools or repair old ones — projects that last for decades, Otter said.
Now, CPS is borrowing to pay bills and pay operating costs, in addition to building new schools. That means the school district must pay interest for decades, though little is left to show for it.
And there’s no end in sight. CPS CEO Forrest Claypool said last week he may need to borrow more just to get through this year.
Several factors led borrowing to shoot up this year.
For one, last year’s budget was never really balanced. The school district counted on $215 million it hoped to get from the state that was never allocated.
Also, the state is late in paying hundreds of millions promised to school districts. As a result, CPS had to take out nearly $500 million in short-term loans to make up for the missing state money.
About $45 million of this year’s debt payment will go toward paying off a $729 million bond for construction and repair of schools. That money will be offset by a new city property tax approved last year for CPS capital projects.
Sarah Karp covers education for WBEZ. You can follow her at @WBEZeducation.