As debt service continues to devour an already unsustainable budget, do not expect student learning outcomes to improve.
On August 28, 2025, Chicago Public Schools (CPS), the fourth-largest school district in the US,passed a $10.2 billion budget and is facing a $743 million deficit. Prior to the budget passage, the big three credit rating agencies each rated CPS General Obligation (GO) Bonds “non-investment grade speculative,” also known by the more pejorative title “junk bonds.” CPS bonds receiveda Ba1 rating from Moody’s and a BB+ rating from both S&P Global and Fitch Ratings.
The name “junk” refers to the risk that investors face that CPS will not make interest payments or repay the principal when the bond fully matures. To offset this risk, junk bonds offer high interest rates to attract investors. This is especially significant because GO bonds are backed by “the full faith and credit” of CPS, meaning the district promises to use all existing revenue to pay back the debt and, if necessary, raise new taxes to pay the debt.
Unfortunately, these ratings are justified. Research from the Illinois Policy Institute found that CPS suffers from chronic budget deficits as well as billions of dollars in debt and unfunded pension liabilities despite record-high operating revenue. The problem is persistent overspending. As my colleague Corey DeAngelis wrote, CPS officials and staff “put their own desires before the needs of children.”
The situation at CPS, however, will not be contained within Chicago. The budget stress could put additional stress on the state of Illinois, which is already teetering on the edge of the fiscal cliff.
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Madison taxpayers have long supported far above average (now > $25,000 per student) K-12 tax & spending practices. This, despite long term, disastrous reading results.
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The data clearly indicate that being able to read is not a requirement for graduation at (Madison) East, especially if you are black or Hispanic”
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