CHICAGO (Reuters) - The Chicago Board of Education approved a $7.7 billion fiscal 2020 budget on Wednesday, rejecting a call to delay a vote on the spending plan by the district’s teachers union, which is eyeing a possible strike next month.
The Chicago Teachers Union (CTU), which is in contract talks with the nation’s third-largest public school system, claimed the new spending plan fails to address “dire” shortages of social workers, nurses and other staff.
School officials said the budget funds 95 additional positions that were part of a commitment by Chicago Mayor Lori Lightfoot for more than 450 new jobs over five years.
“We have a budget before us that is balanced,” said Board President Miguel del Valle, noting that the additional positions would be protected if the spending plan needs to be amended to accommodate a final contract with teachers.
Contract negotiations suffered a setback on Monday, when the CTU rejected an independent fact finder’s recommendations, saying critical bargaining issues such as classroom overcrowding and “dangerous shortages of critical frontline staff” were ignored. As a result, the union said it could go on strike as early as Sept. 25.
Lightfoot and Chicago Public Schools (CPS) accepted the recommendations, including a 16% boost in teacher salaries over five years.
CPS’s financial outlook has improved with a revenue boost starting in fiscal 2018 under a new Illinois school funding law. Escalating pension payments had pushed its general obligation credit ratings into junk due to drained reserves and debt dependency.
The spending plan won the support of Chicago-based government finance watchdog Civic Federation, which warned however, that declining enrollment and labor uncertainty could jeopardize gains in financial stability.
The school board also signed off on the issuance of tax anticipation notes, which the district expects to total around $840 million with a maximum of $1.25 billion outstanding, and as much as $1.9 billion of bonds for capital improvements.
Ahead of an upcoming $369.7 million GO refunding bond sale, Fitch Ratings and S&P Global Ratings this week upgraded the district’s ratings by one notch to the still-junk levels of BB and BB-minus respectively.
Reporting by Karen Pierog in Chicago; Editing by Matthew Lewis
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