Schools budget balanced without higher taxes
For the first time since Mayor Daley’s 1995 school takeover, the Chicago Board of Education will balance its budget without raising property taxes.
Instead of increasing the burden on tax-weary homeowners and businesses, the board will dip $50 million deeper into a reserve fund that will now be reduced to $380 million. That’s about as low as it can go without jeopardizing the school bond rating that determines borrowing costs.
Chicago Public Schools will also put off until next summer its annual bond issue for capital programs. That will save $35 million in borrowing costs. Another $12 million will be generated by cutting the system’s once-bloated central office yet again and by reducing transportation costs.
“Does this plan mean that we are able to expand all the programs we’d like to next year? No. Like every student and parent, I had hoped we’d be able to do more next year,” Daley told a City Hall news conference.
“But Chicago taxpayers have been generous and supported our school improvements and they deserve a break.”
Schools CEO Arne Duncan added, “People are hurting. They’re having a hard time making ends meet. And we refuse to add to that burden…We will not raise taxes. It would have been the wrong thing to do at this time.”
But Duncan made no bones about it: Academic programs that deserve to be expanded will not be able to grow without an influx of new revenue.
“My biggest frustration is that we can’t take to scale what works. We had 200 schools open on Saturdays last year. We should have 600 schools open Saturdays. We had 150 schools open after school…We have 650. Less than 25 percent of our kids have access to what we need,” Duncan said.
Eleven times in the last 13 years, Daley has given the Board of Education the green light to raise property taxes to the maximum allowed by a state-imposed property tax cap. The increase was $55 million in each of the last two years. This year, the cap allowed for a $40 million increase based on a consumer-price-index of 2.5 percent last year.
Daley’s 2008 budget was balanced with $276.5 million in taxes, fines and fees, including an $83.4 million property tax increase, the largest in Chicago history. The City Council also approved a 40 percent increase in the city’s real estate transfer tax tied to the CTA bailout.
The County Board added to the tax misery with a 1 percent increase that took effect July 1. It gave Chicago the highest sales tax in the nation — at 10.25 percent. On downtown restaurants, it’s 11.25 percent.
After all of that and the layoffs that continue to dominate the headlines, Daley decided that taxpayers have had enough.
In fact, he pledged to hold the line on the city’s property tax levy, even though his preliminary 2009 budget due out next week is expected to include one of the biggest shortfalls in recent memory.
The mayor was asked what finally convinced him that taxpayers were at the breaking point?
“When I saw layoffs at Tribune. When you start seeing layoffs in the newspaper industry, that’s a big sign….That says a lot.…This economy is getting more and more challenging. It’s gonna be much deeper and much longer” than anybody thought, Daley said.
