On Thursday, July 31, The Fund’s chief public affairs officer, Nelson Gerew, was invited to testify at the Illinois House Executive Committee subject-matter hearing on HB4017. This bill would potentially reestablish the Chicago School Finance Authority (SFA) to oversee and support the financial integrity of Chicago Public Schools (CPS). Identifying that HB4017 is one approach and that there are many other perspectives on possible solutions to find financial stability in CPS in both the short and long term, the House Executive Committee invited a variety of stakeholders to discuss:
- The current financial challenges facing CPS
- The fiscal relationship between the city of Chicago and the State of Illinois regarding CPS
- Potential strategies to ensure responsible, equitable, and sustainable funding for Chicago students
- Governance of CPS via the new (hybrid) Chicago Board of Education (CBOE) and the impact on fiscal issues
Others provided testimony at the hearing, including:
- Kia Banks, president of the Chicago Principals and Administrators Association
- Michilla Blaise, CBOE member
- Jennifer Custer, CBOE member
- Joe Ferguson, president of the Civic Federation
- Kurt Hilgendorf, legislative coordinator of the Chicago Teachers Union
- Dr. Maquline King, CPS interim superintendent
- Debby Pope, CBOE member
- Ellen Rosenfeld, CBOE member
Edited audio of Nelson’s testimony is below, followed by an edited transcript.
Testimony to the Illinois House Executive Committee Regarding HB4017 on July 31, 2025
Good morning. I’m Nelson Gerew from the Chicago Public Education Fund. The Chicago Public Education Fund is a nonprofit organization. It’s been around for 25 years, focused on improving Chicago’s public schools by supporting the talented educators who work in them, especially around school leadership. Over time, we’ve supported over 300 CPS school leaders per year through our programming and engage on a variety of topics as well that are critical to school leadership and ultimately to strong public schools.
Leader Williams and leader Tarver, members of the committee, thank you for your time today.
I’m Nelson Gerew, as I mentioned, chief public affairs officer at The Chicago Public Education Fund, a proud parent of two CPS elementary school students, and the husband of a CPS teacher. In my remarks, I wanted to provide some brief context on how CPS finances have changed over time and how we’ve gotten to the current situation since the landmark funding reform effort that so many of you spent so much time championing back in 2017.
First, for those of you who have been in the system for a while, you know that financial challenges and crises are unfortunately not new to Chicago Public Schools. Since 2008, we’ve seen CPS swing from balanced budgets to severe deficits and back as external circumstances change. And as Dr. King and the team just mentioned, CPS is vulnerable to these changing external circumstances because of a couple of fundamental truths about the CPS budget. First, the majority of CPS spending is dedicated to personnel. That’s over 70% of last year’s operating budget. Of that personnel, over 96% are directly working with students in schools. As a result, it is always extremely difficult for CPS to make any cuts that do not directly impact the student experience in some way.
Second, as the team reminded us, CPS has a very limited ability to raise revenue on its own. Sixty percent of their revenue comes from property taxes, and — like many other districts in the state — they can only increase that by the rate of inflation, or 5%. And they have done so consistently as they’ve had the opportunity to do so.
And we’ve seen these dynamics playing out consistently over the last several years. If we go way back to FY2010, in the midst of the Great Recession, we saw state funding for K-12 education begin to decline. By the time we reach 2016, the state was only funding education at around 90% of its own specified foundation level. Ultimately, state funding and actual dollars for CPS by 2016 was lower than it was in 2008.
At that same time, CPS’ required pension payments had been expanding significantly as the pension funding ramp took effect and as a three-year break from those required payments stopped. CPS pension payments had increased from $200 million in FY2013 to more than $700 million by FY2016. And during this period, CPS had to implement a series of extremely painful budget cuts. These included mid-year cuts to school budgets, teacher layoffs in 2016, furlough days in both 2016 and 2017, and a consistent reduction in programming across the board. Fortunately, this started to shift by 2016.
As Mike noted, that year, the state allowed CPS to reinstate a dedicated property tax levy to support some of these teacher pension costs. That levy immediately brought in $250 million for 2017, and today, that levy provides more than $550 million a year. At the same time, CPS’ legacy teacher pension costs in FY26 are likely to be over $650 million, which will require CPS to divert more than $100 million from its operating budget that would otherwise serve students.
Now, things improved further in 2017, as you all know. The state passed a landmark education-finance reform. You introduced evidence-based funding and began a plan to increase state funding for education each year until districts would reach 90% of the newly created adequacy targets. You also directed more of these growing funds to the districts furthest from adequacy.
CPS gained significantly from these changes. It also benefited from a simultaneous commitment, as we mentioned, for the state to begin covering the normal costs for CPS teacher pensions. As a result of these changes, CPS state revenue surged from $1.5 billion in FY2016 to $2.2 billion by FY2018. That was a 47% increase over just two years, and the revenue has continued to grow steadily from there, reaching $2.6 billion by FY2025.
And at the same time, as the CPS team reminded us, CPS has consistently raised its property tax levy to the maximum possible amount since FY2012. Over time, that’s led to local revenue increasing from $2.2 billion in FY2012 to over $3.6 billion in FY25.
And with those two revenue trends — a commitment to steadily increasing local revenue and that significant increase from state revenue starting from 2017 — CPS’ financial situation became vastly more secure. By FY19, CPS revenue was now at 64% to adequacy as measured by that new evidence-based model — with this ratio looking to keep rising — and the district seemed on track to financial stability for the long term.
And then COVID-19 happened. As part of that federal COVID-19 response, CPS actually received more than $2.8 billion from the Elementary and Secondary School Emergency Relief Fund, commonly known as ESSER. That revenue was critical. It allowed CPS to meet the needs of the pandemic both operationally and academically. It’s what allowed for the deployment of remote learning, for the use of personalized tutoring — and critically, it allowed CPS to increase staffing to meet student needs. CPS total staffing increased from 38,000 full-time positions in June 2019 to 47,000 by June 2025. The number of regular teachers increased from 12,800 to 14,000. And as Dr. King noted and as leader Tarver referred to, the number of special education classroom assistants increased from just under 4,000 to just under 7,800.
What I want to emphasize is that this resource investment led to real gains for students. CPS has defied the national trend in eighth-grade literacy. CPS eighth-grade scores on the National Assessment of Education Progress, the gold standard for education assessment, now exceed pre-pandemic levels. That is not the case for the state’s average nor for the national average. And there are other achievements to keep in mind as well. A higher share of CPS eighth graders complete Algebra 1 than in the state overall, and that result holds across each racial demographic group. The four-year graduation rate reached 84% in 2024, up from 80% in 2019, with over half of those graduates earning college credit. And in 2024, 26% of CPS graduates earned a three or higher on at least one Advanced Placement exam, beating the national average of only 23%.
As we know, those COVID-19 funds have now expired. The last ones were spent in FY2025. The question is how to keep that successful investment going and how to maintain this elevated level of investment. We see that the district is committed to raising its property tax levy to the maximum amount each year. At the same time, that leaves it with significant deficits stretching out into the future.
I know that won’t be easy, but our experience shows us that it is indeed possible. After all, look at the progress that’s been made. In 2018, CPS’ adequacy rate was 63%. By 2022, 68%. By 2025, 79%. Getting to 100% of the support our students deserve and ensuring those supports result in even stronger academic outcomes is certainly in our collective best interest as a district, city, and state.