Why is CPS collecting most property tax revenue in years despite plummeting enrollment?
CHICAGO (CBS) -- The sticker shock is still settling in for many in Cook County as property tax bills have been arriving in recent days.
For Chicagoans, the biggest piece of the tax pie is funding the Chicago Public Schools. CPS is maxing out their ask this tax year, despite enrollment hitting 10-year lows.
CBS 2's Chris Tye on Thursday sorted through what would have to happen for that trend to reverse. One thing CPS cannot do is close schools that have a plummeting enrollment - due to state regulations that force them to wait three years to do so.
So in the meantime, costs to taxpayers remain high.
In the end, loud teachers' strikes – the most recent in the fall of 2019 – secured better pay for teachers. But that in turn raised district costs.
Also in the end, classrooms that were quiet and empty amid the height of the COVID-19 pandemic - and that were later reengineered for virus safety – also raised district costs.
But there is something else at play that is leading to a trend. Every year, Chicago property taxpayers are paying tens of millions of dollars more than the year before to pay for CPS. The total tax revenue that went to CPS was up $146 million this year over last year.
At the very same time, CPS student enrollment has been plummeting every single year. There are 60,000 fewer CPS students than there were just six years ago.
"We're seeing more students moving to the suburbs. We're also seeing lower birth rates," CPS Chief Executive Officer Pedro Martinez said in October. "So we're seeing less children coming into the elementary schools, and we are seeing more children moving out of the city."
If you think fewer kids mean fewer costs, you're wrong. And if you're getting a City of Chicago property tax bill this year, you know it.
"The Chicago Public Schools chose to increase their prop tax levy by 5 percent, which is the maximum under state law – and is the largest in decades," said Civic Federation President Laurence Msasll.
The Civic Federation's study of CPS spending examines the trend that leaves many scratching their heads.
"Its expenses are going up while its enrollment is going down," Msall said. "That's a big challenge. They need to reverse that trend."
The trend, Msall says, won't change until the CPS CEO's handcuffs come off.
"The handcuffs are - he can't close any schools. He can't make the district really more efficient until this new school board – which is not going to be seated, the 21-member school board, for two more years - he can't close any schools," Msall said. "We have unnecessary sunken expenses."
These expenses are keeping languishing schools open - and property taxes high.
"The solve is better administration and a better plan of school system," Msall said. "We just can't keep continuing to go to the property taxpayers."
One factor that is not in play with the CPS budget is inflation. This year's costs are a reflection of last year's budgeting, which did not factor in inflation.
All this being said, there is hope.
"We've seen some very positive things from the school district in the last two years," Msall said. "Their financial condition has improved."
In a statement late Thursday, CPS said in part:
"Chicago Public Schools (CPS) aims to promote financial stability across our system with strong financial practices and operational excellence....the General Assembly passed in 2017 - what is called the Evidence-Based Funding (EBF) Formula for education but the formula has never been fully funded. In FY23, CPS received 74 percent of what that funding formula says is needed to 'adequately' fund the District - meaning a shortfall of about $1.4 billion per year."
Msall gives new CEO Martinez, who inherited much of the financial problem at CPS, high marks. He says the district is borrowing less money, and has far more in the reserves than in recent memory.
