Mayor Johnson proposing loan to avoid CTU cuts, close Chicago Public Schools budget gap: memo

Chicago Public Schools is in a financial fight.

A proposal to fix a $500 million budget gap is up for a crucial vote next week.

ABC7 Chicago is now streaming 24/7. Click here to watch

But, some say Mayor Brandon Johnson's solution is a bad strategy to save money.

To operate one of largest school systems in the country, Chicago Public Schools officials say it will cost close to $10 billion, and that does not include a teachers contract currently under negotiation.

"Everybody is expecting that it will add to operating costs, but nobody knows how much more will be added," said Joe Ferguson, with The Civic Federation.

A school board vote on this year's CPS budget is scheduled next week. CPS is proposing to close a $500 million budget gap with central office cuts, restructuring debt and eliminating 300 Chicago Teachers Union positions.

To save the CTU jobs and pay for a new contract, which includes raises, Mayor Johnson is proposing a long-term high-interest loan, according to an internal memo ABC7 Chicago has obtained.

"As someone who relies on Chicago Public Schools and the first mayor who sends their children to Chicago Public Schools, I'm not going to tolerate cuts for our children," Johnson said.

However, the mayor would not answer whether or not a high-interest loan is still in play.

SEE ALSO: CPS budget to cut staff from 150 schools, add staff to low-enrollment schools: Chalkbeat analysis

"There are a number of considerations that we have to make to ensure our children get what they deserve," Johnson said.

Ferguson calls a long-term loan a terrible solution. He says it is equivalent to a payday loan without a paycheck behind it.

"This is a teenager with a credit card, assuming that it is linked to mom and dad, and mom and dad are not going to pay," Ferguson said.

In addition, Ferguson said because CPS is at junk status, the interest rate would be even higher. CPS says it has no plans to use a loan to balance its budget.

"What nobody expected was the mayor would be at odds with his own hand-picked school board, which, credit to them, to the extent that they are standing firm on the issue of the savings," Ferguson said.

The Civic Federation plans to issue its own analysis of the CPS budget prior to next week's school board vote.

CPS will hold a budget meeting Wednesday at Jones College Prep. It will also be streamed.