CHICAGO – Chicago Public Schools officials are begging for a bailout from the state to help address a $1.1 billion budget deficit projected for next year.
“I hate to keep repeating myself, but that’s the harsh reality: We definitely need Springfield to step up and do its part in light of a projected $1.1 billion budget deficit,” Jesse Ruiz, interim CEO for CPS told reporters in a conference call, according to the Chicago Tribune.
“It is a bleak picture. That’s the reality of the situation,” he said. “I hope all the citizens of Illinois acknowledge this, that we need to step up as Illinoisans and particularly as Chicagoans.”
Ruiz’s statements come as the district unveiled a $160 million capital improvement budget that supposedly covers only “the most pressing repairs and maintenance issues” for CPS schools, the news site reports.
“Our financial limitations have forced us to shift the focus of our five-year capital plan from the balanced plans of previous years to more urgent structural and safety concerns for buildings that are, on average, more than 75 years old,” Ruiz said, according to Chicago Tonight.
The capital budget is significantly less than last year, when CPS officials approved $509 million in capital improvements. The $160 million budget for fiscal year 2015 would include $113 million from CPS and $47 million from the city and other sources.
“Previous commitments made for multi-year projects will be met and the district will prioritize roof and chimney repairs, as well as other basic building needs,” Chicago Tonight reports. “But the proposal includes limited plans to relieve overcrowding or make technology upgrades where needed.”
CPS Chief Financial Officer Ginger Ostro told the media CPS will fund its portion of the plan by issuing new bonds.
Those types of bonds are exactly what’s bogging down CPS’ finances, which now includes a more than $6 billion debt load from “decades of ambitious borrowing for capital projects,” the Tribune reports.
The district is currently trying to avoid a $228 million penalty for that outstanding debt tied to a clause in the district’s agreement with its lenders that allows them to demand repayment once its debt rating hits BBB-minus. That happened in March.
“The downgrade reflects the limited progress the Chicago Public Schools has made in addressing a structural budget gap approximating 20% of spending for the upcoming fiscal year,” credit rating firm Fitch Ratings wrote when it dropped CPS to “the lowest investment grade rung,” Business Wire reported at the time.
The predicament convinced CPS officials to hold off on signing a one-year contract extension with the Chicago Teachers Union that would add $105 million to the budget to fund a minimum 3 percent raise, the Tribune reports.
Negotiations with CPS’ lenders is ongoing.
CPS’ budget is due by August’s end, but Ostro told the Tribune the district is waiting on word from state lawmakers for help.
“Ruiz and Ostro emphasized the need for support from the state, and they say that an operating budget won’t be unveiled until the district has a better idea of what relief, if any, they can get from state lawmakers in Springfield,” according to Chicago Tonight.
Maybe they can send this lady to Springfield to make the case: