After forecasting a deficit hovering near $1 billion less than a year ago, Chicago Public Schools CEO Forrest Claypool expressed optimism last week in pitching a $5.4 billion operating budget in which forecasted expenditures align to the decimal point with anticipated revenue.Public hearings on the district's operating and capital spending proposals get underway this week prior to an Aug. 24 school board vote. Still, CPS budget documents make it clear the system's finances are deeply troubled.
The district has a huge and growing credit card bill and its junk-level bond ratings will continue to make borrowing expensive. To cover operating expenses, CPS again must borrow against future property tax revenue, which is expected to result in roughly $35 million in interest costs. The district also has proposed issuing up to $945 million in new debt for capital construction projects.
Having burned through cash reserves to cover past deficits, CPS anticipates a negative balance at the end of the fiscal year of nearly $180 million in a fund designated for emergencies.
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