This week’s unveiling of Mayor Rahm Emanuel’s proposed city budget came with two surprises for Chicago Public Schools.
The first is good news: The school district is slated to get an extra $75 million in surplus dollars from special taxing districts called TIFs, or tax increment financing districts. The second is far less favorable: The city once again wants the school district to pick up the costs for police officers stationed in the schools.
In its budget for this school year, Chicago Public Schools had expected $22 million in surplus TIF funds, but Emanuel’s proposed budget includes $97 million. Under Emanuel, city budget officials go through a process every fall to determine what portion of TIF funds will be surplused and distributed to city taxing bodies, including the schools.
School district officials tell WBEZ they will use this additional money to manage cash flow.
That’s needed because the school district’s cash-on-hand ebbs and flows as local, state, and federal money arrives at different times during the year. For the past five years, the district resorted to costly short-term loans to pay bills and salaries on time. The school district has paid as much as 6 percent on those loans in recent years. Its most recent loans had variable rates.
The school district relied on these loans as its financial situation worsened and its reserve funds emptied out.
This year, the school district had planned to borrow more than $1 billion, according to the budget. But officials now say they may be able to borrow less because of the extra TIF dollars. However, they also might use some of the money to deal with increased costs as interest rates rise.
Experts say this is a prudent move after many years when CPS spent TIF surpluses to balance its budget.
While the extra cash is helpful for the school system, the city also alerted CPS it does not plan to continue paying for police officers stationed in schools. The city budget calls this a cost recovery measure.
Under Mayor Richard M. Daley, the city picked up most of the cost of police services, including the salaries of officers assigned to schools.
But under Emanuel, the bill for the police has ping-ponged between the school system, the city, and the police department. In a highly controversial move when he was first elected, Emanuel back-charged the school system for police services. Many suspected he was using the school district to fill a police department budget shortfall.
In all, the city siphoned $58 million from CPS to pay for police services.
Over the next eight years, the responsibility for paying for police went back and forth. Last year, city money was used to pay for police officers as well as for most of the cost of safety and security measures in CPS. Some of the city money was TIF surplus, but the city also took the unusual step of pitching in $14 million from its own coffers.
But this year CPS is again paying for most of its safety and security costs and, starting on Aug. 1, 2019, the city wants the district to go back to paying for police officers, according to Chicago Public Schools officials. The city says the district can bear this cost because it is getting additional dollars from the state.
The mayor’s proposed budget will be the subject of a series of hearing this month before it faces a City Council vote later this year.