The $1 Billion Question: What Can CPS Afford For The Teachers Contract?

ctu strike
Striking CTU teachers chant in front of Oscar DePriest Elementary School on Oct. 22. Marc Monaghan / WBEZ
ctu strike
Striking CTU teachers chant in front of Oscar DePriest Elementary School on Oct. 22. Marc Monaghan / WBEZ

The $1 Billion Question: What Can CPS Afford For The Teachers Contract?

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As the Chicago teachers strike wears on, it’s becoming increasingly clear that a fight over money is standing in the way of a contract deal.

The Chicago Teachers Union says Chicago Public Schools can afford most of its demands. But the city says it’s tapped out.

So who is right?

WBEZ Education Reporter Sarah Karp tries to sort it out.

What does the union say it needs extra money for?

The CTU’s big demands are around class size reduction and the need for more staff, like nurses and social workers. The city now says it will put language in the contract to address these issues, as the CTU has been asking for months. That is progress.

But now the CTU says it wants to make sure these promises can be enforced — and that takes money.

For example, you can say you want a set number of students in a class, but if you have no money to address overcrowding, it becomes an empty promise.

The CTU says the school district has money for these things. What is that based on?

Often, the CTU leadership will say the school district has a $1 billion more to spend.

They say this because the school district has been getting more money from the state since it overhauled its education funding formula in 2017.

Are they right? Does the school district actually have an extra $1 billion to spend?

It is not as if CPS has an extra $1 billion to spend this year as compared to last year.

Over the past three years, the school district has been bringing in a few hundred million more dollars in revenue — both from the state and from increased property taxes.

This year, the operating budget, which is the budget for salaries and classroom costs, is about $260 million more than last year’s budget. This includes money from surplusing special taxing districts, which the mayor just announced on Wednesday she planned to do again.

The expectation is that these amounts will grow over time. The CTU leadership have said they want to make sure additional money goes into the classroom and not just to pay down debt.

But the school district says, despite this extra money, it can barely pay for all its expenses after years of huge deficits. From 2013 through 2017, the school district was running annual deficits that were almost $1 billion.

And huge debt and massive pension bills are weighing down the school district’s finances. The district has $8.4 billion in long-term debt and $450 million in short-term debt. It plans to spend more than $700 million to pay down debt this year.

Also, this year, the school district must contribute $854 million for pensions with new money from the state, a new property tax and from CPS’ operating budget.

The school district has committed more money to this contract — how much more and who will it pay for it?

The school district is offering to spend more on salaries and to reduce class sizes and hire more staff — not as much as CTU wants. It says these expenses will cost Chicago Public Schools $500 million by the last year of five-year deal.

On Wednesday, the mayor announced that she will direct about $160 million to CPS by surplusing the city’s special taxing districts, also known as TIFs. But the city CFO says that’s only for offers that are already on the table. It doesn’t open up more money to meet the union’s demands.

And this is money is one-time revenue. City officials don’t know how they will pay for all these promises after this year.

Also, the school district is trying to protect some of its own priorities. It doesn’t want to spend every dime on CTU contract.

Among the district’s priorities: CPS this year announced a $32 million investment to give schools specialties, like International Baccalaureate and fine arts programs. Also, they have a big curriculum initiative that will cost $40 million this year, in addition to implementing universal preschool for 4-years-olds, which will eat up some of the new money.

So given all this, how are they going to resolve this dispute over money and end the strike?

No one knows.

But the CTU is saying they realize they can’t get everything all at once.

And while the mayor has said decisions have already been made about where the additional money will be allocated, the school district says there are a lot of moving parts. That means there are still decisions to be made and money potentially to be shifted around.

Somewhere in these positions lies a compromise.

Sarah Karp covers education for WBEZ. Follow her on Twitter at @WBEZeducation and @sskedreporter.