CHICAGO (Reuters) - The head of the Chicago Public Schools (CPS) said on Tuesday that Illinois Governor Bruce Rauner’s fiscal 2017 school funding budget would hurt the financially ailing district. Projected per-district funding levels released by the Illinois State Board of Education on Tuesday indicate CPS would receive nearly $893 million in the fiscal year that begins July 1, a drop of $74.4 million from the current fiscal year. “It makes our already grave fiscal crisis graver,” CPS CEO Forrest Claypool told reporters. “That’s why his budget must be defeated.” He added that state funding for the nation’s third-largest public school system was cut by $106 million in fiscal 2016. CPS is struggling with a $1.1 billion structural budget deficit caused largely by escalating pension payments. The district, which has credit ratings in the “junk” level, has been dependent on borrowing to generate cash flow.   The Republican governor in February proposed boosting per-student funding in K-12 public schools to $6,119, the highest level in seven years. However, some districts like CPS would have a decrease in general state aid based on lower enrollment and other factors. Claypool said Illinois needs to replace its “radically discriminatory education funding formula,” claiming it short-changes Chicago’s poor and minority children. He called a new funding plan unveiled by Senate Democrats last week “a step in the right direction,” but not a complete fix. Legislation unveiled by Democratic Senator Andy Manar is aimed at providing more funding to high-need, high-poverty schools. Claypool said he was also encouraged by Democratic House Speaker Michael Madigan’s proposed amendment to the Illinois Constitution that would make public education a fundamental right, while giving the state the “preponderant” responsibility for funding schools. 