Chicago Public Schools may ‘effectively shut down’ this month without short-term financing, superintendent warns

In the latest financial fiasco to beset Chicago Public Schools, the district’s CEO warned parents in an email that its school year may not start Aug. 24 as scheduled.

“We do not know if we will be able to secure the short-term financing needed to pay our employees in September, which would effectively shut down the district just as staff and students are set to return,” Chicago Public Schools CEO Macquline King wrote, as reported by Chalkbeat Chicago.

However, even Chalkbeat acknowledged this scenario was “unlikely” as the district could always “secure a short-term loan, albeit with high interest.”

King’s email came just after the school board passed a nearly $10 billion budget July 30, which relied on “an additional $150 million in state funding that may not materialize,” Chalkbeat warned.

Other observers such as the Illinois Policy Institute were more direct, calling the budget “so wildly reckless and irresponsible that it very literally risks forcing teachers to go without pay for weeks.”

“Chicago Teachers Union-allied school board members rejected a balanced proposal and instead voted to approve a spending plan that reverses planned spending cuts and intentionally puts the CPS $150 million in the hole,” the organization lamented on X.

Relying on ‘uncertain money’

The district is focusing on short-term borrowing to address millions in late county property tax payments, according to Chalkbeat.

“That loan, designed for government bodies facing short-term cash flow needs, would help cover a missing $400 million of $700 million the district needs for operations in September, according to a memo CPS sent board members this week that Chalkbeat obtained.”

However, such a strategy could involve more expense and scrutiny, analysts warned.

“A budget that assumes a bunch of state revenue that may or may not arrive is good reason to ask tough questions you’ve never asked before,” said Justin Marlowe, research professor at the University of Chicago’s Harris School of Public Policy, in an email to Chalkbeat.

As previously reported by Heartlander News, the district had proposed staff furloughs and a spending freeze to close its $732 million shortfall.

However, the union quickly dismissed the plan, calling it “dead on arrival.”

“Students have had to learn in overcrowded classes, practice under unpaid coaches, and be counseled by caseworkers with loads beyond compare all year, and now CPS thinks they can plan a week of furloughs and tell the staff who serve them they don’t have a job? Please,” CTU president Stacy Davis Gates said.

Community analysts have blamed the district for allowing the massive deficit to unfold over years of irresponsible spending habits.

“Since 2019, Chicago Public Schools has added nearly 10,000 staff (+26%) and $4B in new spending (+31% in real terms) despite enrollment dropping by 45,000 students (-12.5%),” wrote Austin Berg, executive director of the Chicago Policy Center and vice president of marketing for the Illinois Policy Institute, on X.

Berg also described the board’s new budget as “going broke on purpose” in a move to squeeze out more government funding.

“This budget vote was akin to setting the district’s house on fire and hoping insurance pays out,” he wrote. “That was by design.”