Budget Overview

Introduction

Like school districts throughout the country, Chicago Public Schools (CPS) is managing new and evolving issues as a result of the COVID-19 pandemic. Despite these challenges, CPS is committed to the continued investment in our students, and our FY21 budget provides the near-term resources needed to best manage the unique school year ahead while investing in the long term interests of our schools, and promoting responsible investment and financial stability. This budget builds on the commitments of academic progress, financial stability, and integrity established by the CPS Five-Year Vision, which was released in the spring of 2019.

Our FY2021 operating budget invests over $4 billion in school-level funding and $758 million in capital projects that will help ensure students throughout the city have access to modern, safe school buildings for years to come . School budgets for FY2021 will provide CPS schools with a comprehensive set of supports to advance equity; enhance college and career readiness supports; expand access to free Pre-K; meet the needs of diverse learners; and increase nurse, social worker, and case manager staffing levels to an all-time high in the district.

Stronger School Budgets Through Impactful Community Engagement

Our FY2021 operating budget reflects feedback provided through an extensive community engagement process undertaken by the district. In July 2019, Chicago Mayor Lori E. Lightfoot and CPS leadership announced a multi-year commitment to further strengthen school budgeting by engaging the community to identify opportunities to promote greater equity in the budgeting process. As a result, the district held six community budget forums last school year to discuss the budgeting process and gather feedback. A diverse School Funding Working Group consisting of Board of Education members, principals, Local School Council (LSC) members, philanthropic leaders, and various other stakeholders was assembled to evaluate feedback from the community meetings and develop a series of recommendations for the district.

The School Funding Working Group provided a series of short and long-term recommendations, which include providing school leaders with additional budgeting assistance and empowering LSCs during the budget process, to promote greater equity and better support school communities. As a result, CPS took steps throughout the FY2021 school budget process to enhance support for high-needs schools and better support school principals.

Narrowing the Opportunity Gap for Students Most in Need

CPS remains focused on improving equity in our schools and is committed to ensuring all students receive the same opportunities for a high-quality education, regardless of their race, zip code, country of origin, or diverse learning needs. 

The FY2021 budget allocates millions of dollars to ensure that students who most need support will receive the necessary resources to help them reach their full potential. For example, CPS has increased funding for our Equity Grant program from $31 million last year to $44 million in FY2021. This program will help ensure 255 schools with low or declining enrollments, many of which serve our most vulnerable students, can continue offering high-quality academic programs this school year. Also this year, the district is increasing the maximum equity grant a school can receive, with the largest grant reaching nearly $700,000 and the average grant providing $174,000.

We know that students from limited-income backgrounds need additional resources to be successful. To ensure we support these children equitably, CPS is also allocating an additional $100,000 to support positions dedicated to high-quality instruction at the more than 100 schools in the highest-need areas of the city. In alignment with recommendations from the School Funding Working Group, the district is utilizing the University of Illinois at Chicago’s Economic Hardship Index to target resources for schools in the 12 areas of greatest need.

Largest Ever Diverse Learner Funding Increase

The FY2021 budget also includes an additional $97 million in special education funding, which is the largest-ever one-year budget increase in diverse learner spending on record. These funds will help ensure schools have the resources they need to meet the specific needs of all students with Individualized Education Programs. 

Based on feedback from public engagement sessions, collaboration with advocates, and the district’s work with the Illinois State Board of Education (ISBE), CPS is instituting a consistent methodology for allocating special education positions. In prior years, special education allocations were determined based on a review of each school’s needs, which led to a high level of mid-year corrections and the potential for inconsistent allocations among schools. By transitioning to a consistent methodology for all schools, the district will better ensure that schools have the resources they need at the beginning of the year, and that those resources are distributed in an equitable manner.

Moving Closer to Universal Pre-K

CPS is investing an additional $18 million to add 43 free full-day Pre-K classrooms and serve 900 additional students next school year, moving the district closer to our goal of providing all four-year-olds with access to universal Pre-K. To ensure all Pre-K classrooms have the resources they need to support our youngest learners, every full-day Pre-K classroom will also receive a supplemental stipend of $8,500 next school year.

To build on the 28 high-need communities that were prioritized last school year for free Pre-K, the 43 additional classrooms funded by the FY2021 budget will be located in 14 priority communities. As a result of this expansion, more than half of the city’s 77 community areas will offer universal Pre-K for four-year-olds next school year.

The expansion of Pre-K in the coming school year prioritizes students with special needs, increasing full-day access for four-year-old diverse learners by more than 50 percent. As a result, the number of full-day blended Pre-K classrooms in the district will increase from 67 rooms to 103 rooms next school year.

Providing College and Career Readiness Supports for Neighborhood Schools

For the first time, CPS is budgeting $5 million to provide students in grades 9–12 with access to specialized college and career readiness programming. All neighborhood schools will have the opportunity to opt into a new program offered by an external partner that will provide targeted resources for students and ensure they have the supports needed to successfully navigate high school and graduate prepared for success in college and career.

More CPS Nurses, Social Workers, and Case Managers than Ever Before

In July 2019, Mayor Lightfoot and CPS leadership announced a commitment to boost full-time nurse, social worker, and case manager staffing levels to an all-time high and provide a nurse in every school by the 2023–24 school year. These commitments were memorialized in the historic contract reached by CPS and the Chicago Teachers Union (CTU) last school year, and a significant step toward that commitment will be made in the coming school year.

As part of the FY2021 budget, CPS is allocating $13 million to hire an additional 55 nurses, 44 social workers, and 40 special education case managers. This investment will result in a total of 426 nurses, 536 school social workers, and 163.5 special education case manager positions, which will each be a record high for the district.

Case manager positions are allocated directly to schools, and those funds appeared in the school budgets principals received last spring. Nurse and social worker positions are budgeted centrally and have been included as part of the FY2021 operating budget.

Continuing the Expansion of High-Quality Academic Programs

During the 2019–20 school year, CPS opened our second annual program application process, which allows school communities to apply for the high-quality academic programs of their choice. As a result of that process, CPS will invest $18 million in new high-quality programs like International Baccalaureate (IB), STEM, and Dual Language over the next six years. 

These investments will enrich the experience of more than 10,000 students in 22 schools and will help fill programmatic gaps in 11 of the 16 geographic regions established by our Annual Regional Analysis (ARA)––a comprehensive resource that is updated regularly and provides CPS families with critical information about enrollment, school quality, and academic offerings at the CPS schools in their neighborhoods.

Highlights of these programmatic investments include:

• The district’s first-ever early college STEAM programs at North Grand and Uplift high schools
• The first gifted program on the city’s west side at Morton School of Excellence
• The first fine and performing arts high school on Chicago’s far south side at Julian High School

Supporting Principals and Funding School-Level Success

In the 2020-21 school year, CPS is increasing the student-based budgeting (SBB) rate by 3 percent to align with the teacher salary increase in the CTU contract. Additionally, for the third consecutive year, school-level funding will be based on each school’s 20th-day enrollment from the 2019–20 school year. These funding levels will not decrease, even if fall 2020 enrollment is lower than it was in fall 2019. However, if fall 2020 enrollment exceeds last year’s enrollment, schools will receive additional funding. This funding approach gives principals the ability to plan with confidence, knowing that their funding allocation will not decrease if enrollment declines. 

It is critically important to afford our principals the time to thoughtfully plan for the next school year. We are proud that even given the challenges facing CPS last spring, including the need to shift to full remote learning during the COVID-19 pandemic, we were able to provide FY2021 school budgets to principals in late April. In addition, to provide principals with greater support this year, the district is acting on recommendations from the School Funding Working Group to provide these school leaders with additional budgeting assistance following the release of funding allocations. For the first time, the district’s School Support Center and Budget Office will provide all new principals, as well as other principals who need additional support, with one-on-one consultations to ensure they are able to optimize their funding allocations and prepare their schools for a successful year.

Investing Equitably in School Buildings Throughout Chicago

As the district works to address the unprecedented short-term challenges presented by COVID-19, we remain committed to the long-term investments that will help more of our students access safe, modern school buildings. In keeping with the equity focus outlined in our Five-Year Vision, the FY2021 capital budget was developed in collaboration with the CPS Equity Office. To support the development of the FY21 capital plan, this office created the district’s first-ever Equity Index, which is a tool used to inform where resources are most needed throughout the city.

As part of our commitment to increased engagement with stakeholders, CPS families were given the chance to provide feedback on the Equity Index during five community meetings held earlier in the year. Their insight helped shape the final structure of the Equity Index, which was central to all of our investment decisions.

Strengthening High-Quality Neighborhood Schools

Approximately $306 million in capital funding will go toward addressing facility needs and strengthening neighborhood schools throughout the city. Projects include rebuilding roofs and mechanical infrastructures, stabilizing chimneys, and replacing fire alarms to ensure Chicago’s school buildings remain safe, modern learning environments for years to come. As part of this investment, the FY2021 capital budget allocates $9 million for restroom renovations, which was something our families told us was a high priority during community engagement efforts earlier this year.

On top of this $306 million capital investment is $20 million to promote Americans with Disabilities Act (ADA) accessibility at 36 CPS schools. This follows an investment of $10.5 million in ADA upgrades in FY2020, and is part of a multi-year, $100 million commitment to make the first floor of every school building accessible to people with disabilities.

Investments to Support High-Quality Academics and Enrichment

CPS is investing $231 million to modernize classrooms in several priority areas throughout the district. These investments include:

• $100 million to develop new Pre-K classrooms. This investment will move CPS closer to our goal of providing all four-year-olds in Chicago with access to free, full-day Pre-K by the fall of 2021.
• $30 million for science lab modernization. This investment will result in the building of 31 new science labs, and is the culmination of our multi-year plan to provide a modern science lab in every CPS high school.
• $22 million to support new high-quality academic programs. The FY2021 operating budget is allocating $18 million in funding for new academic programs resulting from our district’s annual program application process. The additional $22 million in the capital budget will go towards building and renovating spaces to accommodate these new, high-quality academic programs.
• $50 million to develop a new state-of-the-art sports complex. The FY2021 budget includes a $50 million investment in a new state-of-the-art athletic facility to serve students in the south and near south areas.
• $27 million to promote healthy and active development. The FY2021 capital budget will provide more than 25 schools with new playgrounds, playlots, and turf fields to promote a healthy, well-rounded education among students.
• $2 million to promote student safety. This year’s capital budget will invest in cameras, alarms, screening equipment, and other resources to help keep CPS students safe.

Creating Space for Growing Communities

In many prior years, the majority of funds in the CPS capital budget were allocated to new construction. During FY2021, these funds will mostly be devoted to modernizing and repairing existing facilities, with two notable exceptions.

CPS will move forward this year with our plan to develop an annex for Sauganash Elementary. This heavily overcrowded school is attended almost exclusively by neighborhood families and is located in an area of the city with a growing population. This annex will give Sauganash the space it will need to accommodate its growing population in the years to come.

Finally, in addition to the $653 million in guaranteed spending for capital projects, the FY2021 budget includes an additional allocation of $50 million from the state of Illinois to develop a new high school that will serve students on Chicago’s near south side. Later this year, we will launch a community engagement process to identify potential locations and consider key questions about the focus and design of the school.

Investing Produces Results

The FY2021 budget provides our school communities with the resources they need to build on their record-breaking gains. CPS has become a national leader in urban education, and in the past year our schools have earned the following recognition and achievements: 

• According to U.S. News & World Report, CPS schools claimed seven of the top 10 spots for top-rated high schools in Illinois, with nine CPS schools ranking among the top 350 schools in the United States.
• In 2019, CPS students achieved a new record-high graduation rate of 78.9 percent, which was propelled by the academic progress of African American students. This graduation rate marks an increase of 22 percentage points from 2011, when only 56.9 percent of CPS students earned a high school diploma.
• More Chicago elementary students are meeting or exceeding national attainment standards for reading and math than ever before. In 2019, a record 56.7 percent of students met or exceeded the national average in math scores, and 61.8 percent of students met or exceeded the average in reading scores on the 2018–2019 NWEA MAP assessment.
• In 2019, more CPS graduates than ever––48.6 percent––earned college and career credentials while still in high school, making college more accessible and affordable for students and their families.
• The class of 2019 earned $1.47 billion in scholarship offers—$140 million more than in 2018 and more than five times the $266 million students earned in 2012. This dramatic increase is consistent with the district’s strategic expansion of postsecondary initiatives and college-level programming such as IB, STEM, AP, dual credit, and dual enrollment in schools across the city.
• More high school students are staying in school than ever before, with the one-year dropout rate at an all-time low of 6 percent in 2019, and with the biggest improvements coming from African-American and Latino male students. CPS’ investments in mentoring, after-school programming, and social-emotional learning continue to support students and help them stay in school. Since 2011, the one-year dropout rate has decreased by more than 43 percent.
• New groundbreaking research from the UChicago Consortium on School Research shows that more than 80 percent of the district’s English learners (ELs) achieve English proficiency by eighth grade and the majority of these students are matching or exceeding the academic performance of their peers who have never been classified as ELs. This finding speaks to the strength of bilingual supports and programming throughout the district.

The investments outlined in this budget will allow students to build on this considerable momentum and maintain the reputation Chicago has established as a national leader in the field of urban education.

Impact of COVID-19 and School Reopening Expense on FY2021 Budget

The onset of COVID-19 and subsequent impact on the broader economy has significant implications for CPS’ short-term financial picture and the FY2021 budget. 

The FY2021 budget includes $75 million to support remote learning for the fall and school reopening costs, covering new and different needs for students and schools as CPS continues to adapt to different learning environments. This budget will support technology, protective personal equipment, health supplies, additional cleaning expenses, contact tracing, school logistical and instructional support, and other needs as circumstances dictate.

Along with these additional expenses, COVID-19 has made a significant short-term impact on CPS revenues. Economic difficulties at the state level forced the state to forgo its planned increase to EBF, which would have yielded $60 to $65 million in new funding for CPS. Projections for other economically sensitive revenues, like the Personal Property Replacement Tax,  have changed drastically during the larger economic downturn. 

The FY2021 budget assumes $343 million in additional federal funding for beyond the CARES act funding that has already been authorised by Congress. This amount is less than what CPS would receive under the most conservative relief proposal currently being debated by lawmakers. This funding includes both funds to support district expenses and a projected share for non-public schools, which the district is typically required to pass along in the event that additional funding is received. In the event that additional federal funding is received beyond the assumed $343 million, those funds would be used to guard against any additional expenses or revenue reductions in FY21 due to the evolving nature of the pandemic and also help mitigate any challenges that extend into FY22.

FY2021 Budget Overview

Despite the impact of COVID-19, CPS revenues are projected to increase in FY2021, keeping the district on track for sustainable growth after years of fiscal uncertainty. While the FY2021 budget includes substantial levels of federal emergency relief funding to cover emergency expenses and offset previously anticipated revenue increases that will not materialize, CPS’ revenue structure remains stable, with property taxes and state education funding providing the vast majority of CPS’ revenue. Though economic conditions have limited growth in these areas in FY2021, they represent a stable base that allows the district to continue to make classroom investments that support academic progress.

However, this improved financial outlook still does not elevate the district’s revenue collection enough for our students to receive all the resources they need and deserve. In particular, CPS would still require over $1.9 billion in additional  FY2021 state funding in order to meet the state’s assessment of the needed resources to fully fund our schools.

CPS’s total operating budget includes $6.92 billion in funding, with 95 percent of these funds directly supporting schools. Along with funding allocated directly to district, charter, and contract school budgets (59 percent), citywide funding allocations (36 percent) provide centrally managed support directly to schools - including custodians, nurses, social workers, security, and other functions - and include funds transferred to schools after the start of the year (i.e. fall enrollment funding adjustments, potential grants, etc.). Less than 5 percent of the CPS operating budget covers central office and network costs.

Budget Overview Chart 1: Operating Budget by Location

For additional details on the FY2021 operating budget, please see Appendix II of this chapter, as well as the Revenue Chapter of the Budget Book.

FY2021 Capital Budget Overview

The FY2021 budget includes a capital budget totaling $758 million of investments that will focus on priority facility needs at neighborhood schools; full-day Pre-K expansions; ADA accessibility; and continued expansion of technology upgrades, modern science labs, and other academic priorities. To support schools throughout the city, the FY2021 capital plan provides funding in six main areas: critical facility needs, interior improvements, programmatic investments, overcrowding relief, site improvements, and information technology and security upgrades. 

The CPS facility portfolio includes 522 campuses and 798 buildings. Our average facility age is over 80 years old, and the total CPS facility need is over $3 billion. Since FY2016, CPS has invested over $2.1 billion into capital improvements across the district. These projects include major renovations to ensure our schools stay warm and dry, facility construction to relieve overcrowding, security cameras to provide a safer environment for our children, and renovations to aid programmatic enhancements, among others. Additionally, CPS is investing $100 million in the next five years to ensure all CPS campuses are more accessible.

The FY2021 capital budget is funded by future bond proceeds backed by EBF, potential state capital funding, and potential outside resources as they become identified. 

Full details on the FY2021 capital budget are available on the interactive capital plan website: www.cps.edu/capitalplan. The site allows users to quickly select projects by school, geographic area, type, and year.

FY2021 Debt Budget Overview

The FY2021 budget includes total appropriations of approximately $711 million for debt service payments on the district’s outstanding bonds.

CPS’ Capital Improvement Program, described in the Capital chapter, funds long-term investments that provide our students with a world class education in high-quality learning environments. CPS relies on the issuance of bonds to fund the investments laid out in our Capital Improvement Program, which include roofs, envelopes, and windows; state-of-the-art high school science labs; high-speed internet and digital devices; playgrounds and athletic fields; and expansion of full-day Pre-K and other high-quality programmatic investments. Bonds are debt instruments that are similar to a loan, requiring annual principal and interest payments.

As of June 30, 2020, the Board of Education has approximately $8.1 billion of outstanding long-term debt and $500 million of outstanding short-term debt. 

For additional information on the FY2021 Debt budget, please see the Debt chapter of the budget book.

Appendix I: FY2020 Operating Budget Financial Performance

FY2020 year-end estimates project CPS to outperform budget expectations by $41 million. Revenues in the initial FY2020 budget were $56 million less than budgeted expenditures, reflecting the district’s ability to budget unspent, restricted grant revenues from the prior year. The district also received $40 million in revenues below budget, largely due to budgeted grant contingencies that the district spends only if funding materializes. This practice contributes to a portion of the district’s underspend, which projects to be $137 million for FY2020. The remainder of the spending below budgeted expectations reflects a slowdown in local spending from the school closures due to COVID-19.

Revenues

Local Revenue

The year-end total of property tax revenue is projected to come in $16 million higher than the originally budgeted amount of $3.1 billion, as the amount of new property exceeded initial estimates. There is projected to be no anticipated impact from the removal of financial penalties associated with property owners who pay their second installment property tax bill after the deadline of August 3 2020, but before October 1, 2020. Personal Property Replacement Tax (PPRT) revenues are projected to come in $13 million under budget due to statewide corporate income tax receipts sharply declining as a result of COVID-19’s impact on the economy.

State Revenue

Under the EBF model, CPS in FY2020 received $8 million less than originally budgeted in EBF revenues. This was a result of diversions to charter schools approved by ISBE being higher than expected. Categorical grant revenue is also projected to be $10 million lower than budgeted.

Federal Revenue

Federal revenues received in FY2020 are projected to be $8 million higher than budgeted, largely due to reimbursement of COVID-related expenditures with federal CARES funding. This offset a drop in reimbursements related to regular expenditures due to the cessation of in-person classes in March. Lower than normal claims in areas including Title I, II, and IV funds and other federal funds will allow those future revenues to support the FY2021 budget.

Expenditures

Estimated FY2020 expenditures are $137 million lower than the FY2020 budget. This underspend is largely driven by a slowdown in operational spending after the schools closed in the spring due to COVID-19. The final FY2020 budget also included a significant level of funds budgeted in contingencies. A portion of these funds accounted for increases in spending in the amended budget related to the district’s new labor contracts and were transferred to salary spending accounts. Schools also budgeted funds in contingency which eventually spent in various non-personnel accounts.

Appendix II: FY2021 Summary Information

The FY2021 operating budget is approximately $6.92 billion. 66 percent of the budget is tied to teacher and education support personnel salaries and benefits (including pension costs). Charter tuition makes up nearly 11 percent of the operating budget while commodities (e.g. utilities, textbooks, supplies), transportation, contractual services, contingencies, and equipment make up the remaining 23 percent.

Appendix II Chart 1: FY2021 Budget by Expense Category (millions)

The FY2021 budget includes 39,739 full-time equivalents (FTEs), an increase of 1,701 FTEs from the FY2020 budget. 97 percent of all positions in the FY2021 budget provide direct support to schools.

Appendix II Chart 2: Of the 39,739 Positions in the FY2021 Budget, 97% Directly Support Schools (FTEs)

Salaries and Benefits. 68 percent of operating expenditures in FY2020 were on employee salaries and benefits. The FY2021 salary budget reflects an increase of $211 million over FY2020 spending due to a combination of factors. Positions that remained unfilled during the course of FY2019 caused a reduction in FY2020 spending, and the addition of teachers, school support staff, and citywide student support staff in the FY2021 budget drove the increase year-over-year. Benefit costs reflect an increase of $43 million from FY2020 due primarily to pension and healthcare costs. Additionally, funds that are held in contingency often get transferred and spent on salary and benefits during the year (see ”Contingencies” below for additional detail) which accounts for the remaining increase. 

Contracts. This category includes tuition for charter schools and private therapeutic schools and payments for clinicians that are not CPS staff. This category also includes early childhood education programs provided by community partners and programs such as Safe Passage. In addition, this category includes repair contracts, legal services, waste removal, janitorial services, engineering, and other services. FY2021 spending is projected to be $40 million higher than FY2020 spending due to increases in charter school funding and inflation in vendor contracts.

Commodities. Commodities include spending on items such as food and utilities (which make up the largest share), instructional supplies such as textbooks and software, and other supplies such as postage and paper. The FY2021 budget is projected to be $5 million above FY2020 spending, although schools typically transfer funds from contingency to commodities spending accounts over the course of the school year as needs are identified.

Equipment. Equipment pays for the cost of furniture, computers, and similar other non-consumable items. During FY2020, district spending increased in this category to provide additional technology within classrooms and to support remote learning. Additionally this category experiences increases in spending during the year as schools transfer funds into the equipment account from other areas of their respective budgets.

Transportation. The cost of bus service is the vast majority of the transportation budget, but it also includes costs for Chicago Transit Authority (CTA) passes and reimbursement that the district is legally required to provide. The FY2021 budget for transportation projects to increase by $13 million due to contractual increases in bus vendor contracts. This cost may reduce if bus service decreases while students are engaged in remote learning.

Contingencies. This account type includes three categories of spending. The first category represents funding that has been budgeted but not yet allocated to specific accounts or units where it will eventually be spent. Under the SBB system, schools are not required to allocate all of their funds, but can hold some in contingency while they determine how they want to spend it. Similarly, the district holds grant funds in contingency, particularly if the grant is not yet confirmed. Spending should rarely take place from contingency accounts, which is why the budget is significantly higher than the actual expenditures. In FY2021, additional funds are budgeted in contingency to account for additional expenses related to fall remote learning and school reopening.