CPS finance chief warns of $700M+ shortfall; board urged to approve budget and short‑term borrowing by July 30

Chicago Public Schools on June 25 received a detailed FY27 finance briefing that framed the district’s imminent budget choices as urgent and structural.

Acting Chief Budget Officer Emily Zoko (presented in the transcript as Emily Zoko) told the board that the district faces a projected FY27 deficit "upwards of $700 million," describing revenue as roughly 61% local (property tax), 29% state and about 10% federal. She said district leaders have already identified about $272 million in FY26 reductions and are targeting at least $105 million in further central/citywide reductions for FY27, while preserving core school resources where possible.

Acting Chief Financial Officer Wally Stock presented the debt and cash‑flow picture: CPS carries more than $9 billion in long‑term debt and faces roughly $900 million in debt service obligations in FY27, Stock said. He warned that the district has relied on short‑term borrowing to bridge delays in property‑tax receipts and that recent county delays and prior drawdown of federal relief funds have strained cash reserves. Stock said CPS projected a negative cash position at points in the year (a figure of negative about $582 million was cited during the presentation) and described scenarios in which the board’s timely approval of the FY27 budget, the tax levy and authorization for tax anticipation notes (TANs) would be needed in July to enable banks to provide short‑term liquidity.

"Nearly $700 million of the $900 million [debt service obligation] is money that, frankly, if we didn't have the footprint — if we didn't have the debt — we could be using that in the classroom," Stock said, underlining the tradeoffs produced by long‑term capital financing.

Administrators said the FY27 approach prioritizes student safety and core instructional resources while asking departments to find reductions that least affect day‑to‑day student experience. They listed several school‑level protections — needs‑based funding, targeted Title I allocations, additional special‑education teachers, classroom assistants and plans to open 60 new cluster classrooms — but said the aggregate shortfall remained large.

Board members used the budget briefing time to press for transparency and school‑level detail: they asked for earlier access to department and school budget documents, cash‑flow projections that run 12–18 months, and a clear accounting of appeals and the number of schools affected by changes to assistant principal thresholds (staff noted about 138 schools fell under a 250‑student threshold initially and that after cluster classroom adjustments approximately 121 schools remained below threshold, with roughly 40 schools using discretionary funds to retain AP positions).

Administration said the full proposed FY27 budget and required public hearings will be released in mid‑July with a board vote targeted for July 30; officials said simultaneous approval of the budget, the tax levy and TANs authorization is the practical path banks expect in order to underwrite short‑term borrowing ahead of the fall tax receipts.

The board did not vote on the budget at the June 25 meeting; members emphasized the need for more granular school‑level information and asked for continued engagement through the district's upcoming community budget roundtables.