Approaching Chicago Public Schools' budget deadline, interim chief shows reluctance towards a contentious $300 million loan
Interim CEO Macquline King Rejects Controversial $300 Million Loan for Chicago Public Schools' Budget
In a move that could reshape the financial future of Chicago Public Schools (CPS), interim CEO Macquline King has announced that her proposed budget for the 2025-26 school year does not include a $300 million high-interest short-term loan. This decision comes after months of heated debates and controversies surrounding the loan, which was previously advocated by Mayor Brandon Johnson's office.
The proposed budget, totalling nearly $10.2 billion, aims to address a staggering $734 million deficit without relying on the high-interest loan. Instead, the plan focuses on reducing costs and exploring alternative revenue sources.
Among the cost-cutting measures are reductions in non-classroom staff, such as meal prep workers, crossing guards, janitors, and central office staff. The budget also assumes revenue from uncertain sources like surplus Tax Increment Financing (TIF) dollars, up to $379-404 million, but without guaranteed pension reimbursements to the city.
The $734 million deficit is a result of both reduced state and local revenue assumptions and additional costs, including a $175 million pension payment for non-teaching CPS employees to the Municipal Employees Annuity Benefit Fund (MEABF). The budget would cover this payment only if new revenue appears.
Interim CEO King's decision to reject the loan is significant, as it was a component suggested in previous discussions but is explicitly not included in her proposal. This move is in line with the current school board majority's stance on the issue[2][3][4][5].
The budget must now be approved by the Chicago Board of Education by August 30, 2025. Discussions continue amid significant financial challenges and tensions between CPS and the city administration[1][2][3]. The fate of the $300 million loan remains uncertain, but for now, it seems that Chicago Public Schools will be moving forward without it.
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