Protests over Chicago Public School cuts continue downtown - FOX13 News, WHBQ FOX 13

CPS announces $5.6B budget as protesters march over cuts

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CHICAGO (FOX 32 News) -

The Chicago Public Schools revealed a $5.6 billion budget on Wednesday, the same day a bond rating service downgraded the district's general obligation debt because of its huge pension obligation.

The school district's budget, up from $5.1 billion last year, includes an increase of $405 million in pension payments the district must make because pension reform failed in the Illinois Legislature. Moody noted the district tapped its reserves for $700 million to deal with a $1 billion budget deficit.

The school district is raising its property tax rate to the most allowed under law in an effort to balance the budget.

Moody's says the downgrade to A3 from A2 reflects significant debt and pension obligations of overlapping governmental entities on the district's tax base. The negative outlook applies to $6.3 billion of the school district's general obligation debt.

Last week, Moody's downgraded the city's debt rating, pointing to Chicago's $19 billion unfunded pension liability. Illinois has a $97 billion pension shortfall.

Earlier this month, the district dismissed about 2,100 teachers and support staff. That is in addition to the approximately 850 teachers and support staff laid off in June, which the district attributed to its planned closures of about 50 schools that it considered underutilized.

"We clearly don't have a sustainable budget," CPS Chief Administrative Officer Tim Cawley said. He noted the district is spending $1,000 per pupil just to cover the increased pension obligations. Officials say they expect 405,000 students to enroll in the coming school year.

"Imagine what schools could do with an extra $1,000 per pupil," Cawley said.

As the school district introduced its budget, Chicago teachers staged a demonstration that temporarily halted traffic in the Loop, outside school board headquarters.

Teachers, parents and students marched from the Board of Education headquarters up Clark Street to the Thompson Center to protest thousands of layoffs, school closings and budget cuts.

The Chicago Teachers Union blames Mayor Emanuel for the current budget crisis, saying he finds innovative ways to fund other city projects but turns his back on the schools. Teachers said students everywhere will suffer if the board goes ahead with the budget cuts.

"The board doesn't listen to us," CTU Financial Secretary Kristine Mayle said. "We have to march on the street to get people to hear. This is a crisis and it has to change."

CPS issued a statement saying an historic $1 billion deficit is driven by a $400 million increase in pension payments - and only pension reform can change it.

The $68 million cut was included in a $5.6 billion budget introduced Wednesday by district officials. The budget includes an increase of $405 million in pension payments the district must make because pension reform failed in the Illinois Legislature.

CPS Chief Administrative Officer Tim Cawley says the district's deficit has forced it to tap into one-time revenue and use $700 million in reserves.

Last week, the district dismissed about 2,100 teachers and support staff. That is in addition to the approximately 850 teachers and support staff laid off in June.

Cawley noted the district is spending $1,000 per pupil just to cover the increased pension obligation.

The Associated Press contributed to this report.

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