Mayor Brandon Johnson Rejects CPS Budget: What Comes Next?

In an unprecedented move, Mayor Brandon Johnson blasts Chicago Public Schools' proposed $9.9 billion budget. What comes next?

By Hal Woods | July 15, 2024 |
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Last week, the day after Chicago Public Schools (CPS) proposed a $9.9 billion budget that includes staff cuts and a $175 million pension payment shifted to the city, Mayor Brandon Johnson blasted the plan, declaring he won't accept the measures.

Background: CPS's FY25 operating budget deficit, initially projected at $391 million, has increased by 30%, or $114 million, to $503 million.

  • The increase is due to rising healthcare costs and required special education resources, partly driven by the recently ratified collective bargaining agreement with SEIU Local 73.

  • The district plans to close the deficit through a combination of administrative spending cuts, personnel reductions, debt restructuring, and leaving vacancies unfilled.

  • The Chicago Teachers Union (CTU) sharply criticized the CPS budget.
    • President Stacy Davis Gates described the budget as “not real” while Vice President Jackson Potter called it “structural inequality masked as fiscal responsibility.”

  • Mayor Brandon Johnson similarly rejected the budget’s proposed staff cuts and is pushing for CPS to take on a short-term, high-interest $300 million loan to address the deficit—but is facing strong opposition from his appointed Chicago Board of Education.


Why it Matters: For the first time since mayoral control began in 1995, a Chicago mayor has publicly rebuffed a budget proposed by their hand-picked Board of Education and CEO.

  • The episode also highlights how Johnson's former employer, the CTU, is ramping up increasingly personal attacks against CPS CEO Martinez, with the union targeting Martinez three times in a week over the budget and the pace of labor negotiations.

  • With schools opening in six weeks and no resolution on the FY25 budget, it's unclear which school-based positions will remain and which will be cut.


Zoom In: The district's FY25 operating budget deficit stands at $503 million, but a leaked memo projects it could increase by an additional $128 million to $631 million due to costs stemming from labor contracts still being negotiated with the CTU and Chicago’s new principals' union.

  • The district budget also does not include a $175 million pension payment to the Municipal Employees’ Annuity and Benefit Fund, despite Mayor Johnson's push for CPS to cover it.
    • Johnson worked for the CTU when they accused former Mayor Lightfoot of "ripping off CPS" and "robbing students" by shifting the pension burden to CPS, a responsibility Johnson and the union argued was the city's.

    • To the Mayor's apparent surprise, CPS shifted the payment responsibility back onto the city.

  • If the payment is moved back to CPS, the district's deficit would rise to $678 million.
    • Add the projected costs of the new CTU and principals' union agreements and the district’s FY25 deficit could grow to a staggering $806 million.

  • Worse yet, after the district exhausts the final $233 million of COVID-19 relief funds this school year, the FY26 budget deficit could approach close to $1 billion, factoring in the new CTU and principal contract costs and if the city forces CPS to take on the $175 million pension payment.


Behind the Curtain: Mayor Johnson has proposed CPS take a $300 million loan this year to cover the pension payment, prevent staff cuts, and fund the CTU contract costs.

  • Chalkbeat reported that Johnson is personally lobbying CPS board members to approve the loan plan, but the board “is remaining firm in their pushback.”

  • In a leaked memo, CPS staff also balked at the idea, calling the loan a “fictional or phantom revenue source.”
    • “This could be thought of as putting your credit card payments that you can no longer afford on your mortgage payments,” the memo said. “It allows cash to be freed up for other expenses, but it seeds a costly legacy of future amounts of larger debt to be paid back and it does not solve the issue of being fiscally responsible.”

  • The CTU supports the Mayor’s loan plan, with VP Potter suggesting that there are better loan options available than those used by previous CPS administrations.

  • However, opposition against the loan proposal has emerged from Alderperson Jeanette Taylor, Chair of the City Council’s Education Committee, the Chicago Principals & Administrators Association, and the Civic Federation.
    • Civic Federation President Joe Ferguson likened the Mayor’s loan proposal to a “payday loan” due to the excessively high interest rates.


Reality Check: Mayor Johnson has yet to specify which position cuts he opposes in the district’s budget.

  • Last month, CPS faced backlash from the CTU over the layoffs of around 330 staff members, including teaching assistants and restorative justice coordinators.
    • In response, CPS announced "layoff prevention pools" to reassign displaced employees to vacant positions and ensure their pay through the next school year.

    • CPS is also adding more than 500 new teachers and 300 new school support staff as part of this year’s budget.

  • The district’s budget does propose reducing bus monitors and lunchroom staff, as well as closing several early childhood classrooms due to “excess capacity,” which would decrease the number of school-based positions.

  • The budget includes some assumptions that may be challenging for the district to realize.
    • This includes a $70 million increase in “vacancy savings”—unused salary funds from unfilled positions—compared to last year.


The Big Picture: In a statement last Friday, the Mayor’s office described this as a "bridge year" focused on building on students' gains while securing "long-term fiscal stability."

  • Mayor Johnson is gambling that he can compel CPS to use a loan to cover a substantial portion of its budget deficit while he persuades Springfield to boost funding to the district, likely through increased appropriations to the Evidence-Based Funding (EBF) formula and greater state contributions to cover CPS teacher pensions.
    • However, the state faces its own fiscal challenges and has shown little interest in securing new revenue that would disproportionately benefit CPS.

  • The future tenure of CPS CEO Pedro Martinez is also now in doubt as the CTU has grown increasingly hostile, labeling him a "Lightfoot Leftover”—exemplifying the rapid deterioration of their once-cordial relationship.
    • Two of Martinez’s closest senior advisors have quietly departed in the past month.

  • Martinez’s contract runs through June 2026, and he is entitled to a 180-day notice for a without-cause termination; during that time, Martinez would have to continue working and transition his duties to a new CEO.


K1C’s Take: CPS delayed releasing its budget by a month, claiming it needed more time for additional stakeholder engagement.

  • However, the only engagement during the intervening period has been continued negotiations between City Hall and CPS, which apparently resolved nothing.

  • Now, families and school communities are caught in the middle and left in limbo with less than six weeks until school starts.

  • Instead of negotiating solely in the Mayor’s 5th-floor conference room and through the media, the Mayor and the Board of Education should engage in open, honest, and transparent conversations about balancing the district’s budget.

  • Kids First Chicago will release a set of revenue options for the district later this month, all of which will require collaboration between the district, the city, the state, and taxpayers to implement.

  • One thing is clear: no CPS family wants Chicago to become another San Francisco, where financial mismanagement has led to the state taking control of the school district's budget.

What Comes Next

The district will hold public hearings on the FY25 budget at 4 pm on Tuesday, July 16, and 6 pm on Wednesday, July 17, at Jones College Prep High School. The budget is slated to be considered at the July 25th CPS Board meeting.

  • If the impasse between the city and CPS continues, the budget could be deferred to next month’s August 29th Board meeting – four days after the school year begins.

  • An amended FY25 CPS budget, reflecting eventual agreements with the CTU and the principals' union, is likely to be voted on later this fall.

  • The Mayor will submit his own FY25 budget to the City Council on or before October 15th, which may or may not include the contested $175 million pension payment.

Read more about CPS's Proposed FY25 Budget
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