CPS to cut classroom spending, max out on property tax rate
BY LAUREN FITZPATRICK AND MITCH DUDEK Staff Reporters July 24, 2013 9:21AM
Schools CEO Barbara Byrd-Bennett, left, and CTU President Karen Lewis, right, talk before a CPS board meeting on Wednesday. July 24, 2013. | Alex Wroblewski~Sun-Times
Updated: August 26, 2013 3:21PM
Homeowners, prepare to dig deeper. Schoolchildren — especially high schoolers — prepare to get less.
That was the basic thrust of the spending plan Chicago Public Schools officials laid out Wednesday for the coming school year.
CPS plans to slash total classroom spending by $68 million. It’s small piece of their plan to close a $1 billion deficit, mostly from skyrocketing pension obligations.
To fill the rest of that giant hole this year, the district plans to raise property taxes to the maximum allowed, cut central spending by $112 million and tap into another $700 million in one-time reserves, including county and state money that came in early, said CPS Chief Administrative Officer Tim Cawley.
“Even with all that,” Cawley said, “we still had to make cuts to schools, which is always painful for us.”
Under its new budgeting system, CPS has changed the way it allots money to schools, now basing it on a set amount per student. Because of that, CPS says net cuts across the district were lower than last year.
But whether that’s good news depends on your school.
Some schools, including many receiving kids from closed schools, gained money since their enrollments went up, but many lost money as enrollments went down. High schools, which have the largest budgets to begin with, took most of the biggest hits.
For taxpayers, the property tax increases, totaling an additional $42 million for CPS, will cost the owner of a $200,000 home an extra $32 a year, according to the Cook County Clerk’s office.
Ironically, total CPS revenues were up by $93 million — but it was still not enough to offset the pension costs.
The district’s fiscal year 2014 budget nearly tops $5.6 billion, compared with $5.1 billion last year, and increases spending on programs for dropouts and preschool children, and provides more help for 22 specific struggling neighborhood schools to bring them up to snuff. It also funds another $93 million in salary increases laid out in the Chicago Teachers Union contract.
This school year is already starting with 48 schools shuttered and nearly 3,000 staffers — 1,456 of them teachers — laid off. The 2015 school year might not be any better. It could see an additional $914 million deficit if the pension problem is not resolved.
Adding to the dim picture Wednesday, Moody’s Investors Service, a key Wall Street agency, lowered the Board of Education’s credit rating, pointing to the school district’s pension obligations and $6.3 billion in debt. The downgrade from A2 to A3 is also partially due to the city of Chicago’s parallel financial problems and comes a week after Moody’s issued a “triple-downgrade” of the city’s bond rating from Aa3 to A3, the first drop in the city’s rating since Mayor Rahm Emanuel took office.
The report warns that the board’s credit could be damaged if changes in the budget gap aren’t made in a timely manner and the pension system is not reformed.
CPS said in a statement that the downgrade shows its “financial situation is real and must be handled now. ... Today’s downgrade means that there will be an even higher cost to our students, teachers and taxpayers. As a result of Springfield’s inaction, we will need to spend more money paying interest and less on our classrooms and children.”
CPS’ budget is simply not sustainable, said Sarah Wetmore, vice president of the Chicago Civic Federation. She suggested the city explore reallocating any tax increment financing surpluses to further reduce classroom cuts.
“They released a one-year budget to put them through another year in the hope of getting pension reform. That’s really a problem,” she said. “It’s hard to see how they’re going to be able to put the budget on a more sustainable path without pension reform.”
CPS’ three-year pension holiday came to an end, so the district of about 405,000 students is on the hook for an extra $405 million in pension payments for a total of $613 million.
“We’re spending $1,000 per pupil just to cover the increase in our pension obligations,” Cawley said. “Imagine what schools could do with an extra $1,000” per student.
Illinois has the 48th lowest per pupil funding nationwide, allotting about $5,720 per student, an amount CEO Barbara Byrd-Bennett called an “erroneous structural failure.”
“It’s different costs for different children to educate a child, and we know the demographics in Chicago,” she said. “Our children have different needs and based on the per capita money from the state, we can’t meet all those needs,” she told reporters, calling on parents and others to put pressure on the General Assembly. “Unless our elected officials hear from all of us in some sort of unified voice, I don’t think we’ll get it.”
Chicago Teachers Union President Karen Lewis said she’s willing to lobby legislators for pension reform but also for new revenue.
“We’re ready to work with you on that so that we can actually go to Springfield — but we also need to go to Springfield to get rid of this regressive flat tax, we need a progressive income tax,” she said.
“Let’s try to figure out how to structurally change how schools are funded so that every year we do not have to go through this really, really sick, dysfunctional dance,” Lewis said.
Several Local School Councils have been loudly denouncing cuts expected under the new budgeting system, with at least seven voting to reject or rescind the money the district offered them. Raise Your Hand, a parent group, tallied cuts from more than 160 schools it said totaled more than $98 million.
Byrd-Bennett decided earlier this month to hand out a total of $36 million in state money intended for poor children instead of waiting for fall when the district normally doles it out.
And CPS gave 135 district schools throughout the city extra budget money from its reserves in $35,000, $70,000 and $100,000 chunks, and another $40 for every high school student.
Teachers and parents came out by the hundreds Wednesday to protest staff layoffs and proposed cuts to individual schools before district officials presented to the Board of Education, who will vote on the budget in August two days after the first day of class.
CPS parent and Raise Your Hand leader Jennie Biggs said at a rally inside City Hall that many schools still can’t function with the budgets given to them that are smaller than last year.
“There weren’t basic standards for all CPS students to begin with, and now parents are contacting us and reporting the fallout of the budget cuts at their child’s school: Art and music classes — lost. P.E. time — reduced. Foreign language classes — gone. Teacher assistants — laid off. Social studies — no longer. English language learner positions — gone. Lack of full supervision for recess and lunch. Many, many qualified, certified teachers who were critical to the success of our students — let go.”
Outside CPS headquarters in the Loop, Craig Cleve joined the 250 chanting teachers clad in red, calling the cuts to his Southwest Side school, Columbia Explorers Academy, “appalling.”
“Most of our after school and before school programs are gone,” he said. “Why run on a campaign promise that you’re going to lengthen a day and make it better and slash us to the bone this year?”
Inside board chambers, some 40 current and former CPS students were removed after locking arms and chanting loudly. But first Diana Angulo, 18, who recently graduated from Whitney Young High School and is deaf, addressed the school board in sign language as a former classmate interpreted.
“You have made many cuts from many programs that help disabled students in Chicago,” she said.
“Why are you making our future harder by taking resources that we need? Maybe you think deaf and special people cannot be an important part of the city.”
In finishing her address, Angulo put her hands by her side and mouthed several inaudible high pitched words softly into the microphone.
Her friend interpreted again: “Can you hear me now?”
Contributing: Nausheen Husain, Tina Sfondeles