June 21, 2022
Spending plan bolstered by significant short-term federal support; Federation reiterates call for longer-term plans
CHICAGO – In an analysis released today, the Civic Federation announced it opposes the Chicago Public Schools’ proposed fiscal year 2023 budget of $9.5 billion. The District has not sufficiently justified raising its property tax levy by the maximum allowable amount of 5% under Illinois’ tax cap law, which would result in a $140 million property tax increase at a time when taxpayers already face serious economic strains and when CPS has alternative options available.
“This would be the largest property tax increase for CPS under the Property Tax Extension Limitation Law in 30 years because we are in an extraordinarily high inflation environment,” said Civic Federation President Laurence Msall. “If every taxing body in Chicago taxes to the cap, taxpayers will face substantially increased property tax burdens this year. We would urge CPS to exercise restraint with the property tax increase, especially given that the District’s finances have been recently stabilized through funding from the State of Illinois and federal COVID relief funding.”
The Federation was a strong and early supporter of the federal government providing historic financial assistance to states and local governments to mitigate the impacts of the COVID-19 pandemic. The Civic Federation calls upon CPS to utilize some of the remaining federal funds and/or reduce expenditures before taxing to the cap. The Federation’s analysis points out that it supported past property tax increases as well as the restoration of the teachers’ pension levy, which is not subject to the tax cap, because they were critical to resolve the District’s financial crisis. Said Msall, “Chicago taxpayers have shouldered a significant burden that helped restore CPS to sustainability. CPS must consider that before imposing further maximum annual increases.”
The Federation is well aware that CPS is facing difficult choices ahead as federal funds run out and that it must find recurring sources to close future gaps. The District still needs to address long-term issues to support personnel and spending increases, including underfunded teachers’ pensions, while enrollment continues to decline. No public long-term financial plan outlining strategies for these and other challenges has been presented.
The Federation’s analysis points to several positive aspects of the budget that it supports, including a much improved level of reserves as well as improved cash position.
“If CPS were to significantly reduce the increase to its education fund levy for the next fiscal year, the Federation could support this budget proposal because there are many positive elements that improve its overall financial outlook,” said Msall. “It bears repeating that the federal money provides some breathing room. Each of our Illinois governments would be well-served to create comprehensive plans for the future and to revisit those plans on a frequent basis.”
For more on the Civic Federation’s findings, supports, concerns and recommendations, please visit civicfed.org/CPS_FY2023.