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New Chicago school budget relies on state pension

New Chicago school budget relies on state pension

The upcoming budget for the Chicago Public Schools will rely on $500 million in yet-to-be-enacted pension savings by Illinois, school officials said. The third-largest U.S. public school system is projecting a $1.1 billion deficit in its fiscal 2016 budget, largely because of an approximately $675 million pension payment. If the $500 million in pension relief does not materialize, officials said, the school district would turn to « unsustainable borrowing and additional cuts » to balance the budget nearly halfway through the fiscal year.

« The fact is much of the pain in this year’s budget is due to a broken pension system that forces CPS to choose between making pension payments and investing in our classrooms, » interim Chief Executive Officer Jesse Ruiz told reporters.

A complete fiscal 2016 budget, which will include a $61 million property tax increase and must be in place by the end of August, will be released later this summer. The school system tapped borrowed money to make a $634 million, state-mandated fiscal 2015 payment to the Chicago Teachers’ Pension Fund by a June 30 deadline. It also announced $200 million in spending cuts last month that include the elimination of 1,400 jobs. Chicago Mayor Rahm Emanuel, who controls the district, called on the state legislature to either create a uniform pension system for all Illinois teachers or pay a bigger chunk of the city’s teacher pensions. The Chicago Teachers’ Pension Fund said it received just $62.1 million in fiscal 2015 state appropriations, compared with $3.5 billion for the statewide Teachers Retirement System. District officials said the upcoming budget would incorporate a $106 million cut in state funding. Still, per-pupil funding will remain at current amounts of $4,390 to $5,444, depending on the grade level.

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