CHICAGO — Chicago Public Schools will scale back its planned borrowing in fiscal 2012 and trim administrative costs to shave $75 million off an estimated $720 million gap in its next budget, new schools chief Jean-Claude Brizard and Mayor Rahm Emanuel announced Thursday.
The district expects to save $44 million on debt service next year by lowering the amount of new issuance, though officials did not say how much new debt was being planned. The district typically sells between $200 million to $400 million annually to support its $5 billion capital program.
CPS also will cut some central office positions through attrition and limited layoffs to save $16 million, privatize custodial services to save $7.3 million, and downsize its vehicle fleet to save $5 million, with various other measures making up the remaining savings.
“This plan will reduce the central office budget and scale back on planned spending, keeping cuts as far away from the classroom as possible,” Emanuel said in a statement.
CPS is facing a $720 million deficit in its next $6.5 billion budget to cover the growing costs of teacher salaries and debt service amid chronic delays in state aid payments and expiring federal stimulus funds.
Fitch Ratings last year downgraded the district’s $5 billion of debt to A-plus due to mounting fiscal challenges. CPS has ratings of AA-minus from Standard & Poor’s and Aa2 from Moody’s Investors Service. Both assign negative outlooks to the credit.