‘The amount of money we’re talking about involves a deficit of well north of $750 million, may be as much as a billion dollars’

CHICAGO (WLS) — The nation’s fourth-largest school system is perched on a financial cliff, and will fall if something is not done soon, according to the Civic Federation.

The budget watchdog group released a comprehensive report detailing the dire financial situation Chicago Public Schools faces, especially next year.

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“The amount of money we’re talking about involves a deficit of well north of $750 million, may be as much as a billion dollars,” Civic Federation President Joe Ferguson said.

Ferguson says the report is a reality check for CPS’ new hybrid-elected school board: 21 members will be sworn in on Wednesday. Ferguson warns the board the financial situation is so serious, a state financial takeover is a possibility as a last resort.

“If you put guardrails on the system fiscally, I think that opens the door to the state saying, ‘OK, let’s reexamine some of the inequitable kind of funding practices from the state,'” Ferguson said.

SEE ALSO: CPS Inspector General investigated 300 cases, including sports fraud, annual report says

Ferguson says CPS cannot afford even the minimum cost of a new teachers contract. He says revenue ideas from the Chicago Teachers Union, like a short term loan or using reserve funds, would result in downgrades and tip the district into insolvency. Besides the state fully funding CPS, Ferguson calls for more revenue sources through taxes and spending cuts.

“We hired when we didn’t have money; we expanded when we didn’t have money,” Ferguson said.

While student enrollment went down, budgets increased by 50% during the past decade. CTU argues more spending was necessary.

“The level of spending at CPS is finally starting to catch up to the level of need of their students; we still have a long way to go,” CTU Director of Research Pavlon Jankov said. Read More at ABC 7 Chicago!