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Editorial: CPS budget puts off hard financial decisions

Chicago Public Schools CEO Jean-Claude Brizard (left) Mayor Rahm Emanuel attend meeting last December.  |  Rich Hein~Sun-Times

Chicago Public Schools CEO Jean-Claude Brizard (left) and Mayor Rahm Emanuel attend a meeting last December. | Rich Hein~Sun-Times

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Updated: August 10, 2012 6:15AM

Talk about a patched together budget.

The Chicago Public Schools released its proposed budget on Friday, a $5.16 billion behemoth that makes ends meet by draining nearly $400 million from its reserves, emptying the fund, and does little to deal with the school system’s underlying fiscal crisis.

And, making matters worse, the budget assumes only a 2 percent raise for teachers. It is highly unlikely that the Chicago Teachers Union, which is in contract negotiations with CPS, will accept that raise in a year when teachers will be working a longer day. This year’s deficit, reflecting yet another year of declining revenues, is $665 million.

And next year, when a partial teacher pension holiday expires, CPS is anticipating a $1 billion deficit.

The bottom line: CPS lacks the revenues to support the school system it wants and its children deserve.

We understand why CPS opted for this budget, which faces a vote on July 25. Schools CEO Jean-Claude Brizard and Mayor Rahm Emanuel have a strong vision for the schools and refuse to let a budget deficit get in their way. They are pushing ahead with a longer school day, maintaining funding for early childhood education and high-quality high school options and investing in charter schools.

These are priorities we support, but given CPS’ shaky finances the investments this year will be modest — clearly not enough, for example, to fill the longer day with the kind of enrichment parents and teachers crave. CPS has reallocated $130 million to schools to help enhance the school day, resulting in 512 teacher hires, according to CPS. This is a promising start, and we like the new discretion for principals, but it’s merely a start.

And, crucially, these are investments that will leave CPS without a dime of reserves. CPS policy calls for a rainy day fund of $250 million, a cushion in case revenues fall short.

CPS’ Chief Administrative Officer Tim Cawley acknowledges that draining reserves puts the system’s bond rating at risk and could increase borrowing costs by $1 to $2 million. But he said CPS weighed those extra costs against making roughly $200 million in cuts.

“You could do other things besides clean out the piggy bank but they all have pain,” Cawley said. “It doesn’t feel right to inflict that pain while we’re sitting on so much in reserves.”

For that reason, CPS may get away with this budget — which earns high marks for cutting costs and waste and for transparency (check out for tons of budget info). But as the Civic Federation’s Laurence Msall put it, “This isn’t even a short-term solution. It’s a partial fix with a short-term perspective.”

A year from now, CPS is looking at a $1 billion deficit and an empty piggy bank. This means the hard decision cannot be put off one minute longer.

* Chicago simply cannot afford its pension bills. Next year, the cost to CPS jumps from $196 million to $534 million. However painful, Brizard must get out there with Emanuel and begin pushing for pension reform that reduces those expenses.

* CPS can longer put off closing schools that are massively under-enrolled. According to a new CPS building formula, half of the schools are underutilized. Even if that amount is slightly off, there is no question that CPS is wasting millions each year running dozens of half-full schools. A long-term plan for annual closures has been on the agenda for years but is continually put off. It’s time to finally face up to that painful and difficult task.

* Lastly, CPS must make new finding new revenues a top priority. Money alone doesn’t guarantee quality education but major underfunding makes it that much harder.

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