Tax hike, cuts will plug Chicago schools budget

If approved, this will be the 11th time in 16 years the school district raises taxes to the max allowed.

August 5, 2011

(WBEZ/Bill Healy)

Sacrifice by taxpayers, teachers and students—along with hundreds of millions of dollars pulled from reserve funds—will close a $712 million budget gap at Chicago Public Schools. The district’s proposed budget, released late Friday, hikes property taxes by the maximum amount allowed, makes deep cuts to the central and regional administrative offices, and slashes $87 million from school programs, including mentoring and extra staff in schools.

As expected, the $5.91 billion total budget does not include the $100 million in raises for teachers and other CPS employees that their union contracts called for.

The tax hike will bring in $150 million in additional revenue. CPS calculates it should cost the owner of a $250,000 home about $84 more a year, but a separate levy to pay for school construction will also appear on taxpayers’ bills. The school district has not raised taxes for two years.

School officials say they tried to keep cutbacks as far from the classroom as possible, but admitted the slashed programs will affect students. Many of the programs chopped by the district save a million dollars here, two million there.

“Every one of these lines has pain in it—every line,” said Chief Operating Officer Tim Cawley. “We had to come up with $310 million in cuts.”

Those cuts include:
• Extra positions at turnaround high schools, some of the district’s most challenged schools.
• Extra teachers schools can keep as a “cushion” when enrollments dip. Now, more teachers will be yanked from classrooms even after the start of school if enrollments are low.
• Police officers at high schools; principals will now choose whether they want one of the officers or $25,000 to come up with an alternative security solution.
• Extra funds for 54 schools that don’t get anti-poverty money
• Cuts to a dual language pilot program

More than 400 positions could be lost; Cawley said it’s possible principals could restore some programs with discretionary funds or money earned through private fundraising.

The district says another $107 million in savings will come from the restructuring of central and regional administrative offices, where Cawley said departments are “stepping on each other” because multiple units are responsible for the same tasks. Cawley said the district still does not know how many people will be laid off in the massive reorganization still underway.

This is the first Chicago Public Schools budget released since Mayor Rahm Emanuel’s handpicked team took over the schools.

In sharp contrast to last year, when school officials cut sports teams and scared parents with threats that class sizes would hit 37, this year’s budget crisis hasn’t felt as much like a crisis. Officials immediately said they would not touch class sizes. Language programs, preschool, and popular Culture of Calm anti-violence programs were preserved. The district even committed to increased funding for kindergarten and magnet schools.

Cawley said those things would have been threatened without a tax hike.

The Civic Federation, a nonpartisan budget watchdog group, was supportive of the proposed tax increase, saying the district made “difficult but reasonable” choices. Vice president Lise Valentine applauded CPS for eliminating teachers’ raises given the financial situation, but she called the schools’ long-term fiscal situation “unsustainable.”

“Drastic changes will have to be made, both to expenditures and to revenues, and a major part of that will have to be the pension system,” said Valentine, who warned the district may not be able to pay pensions for its retired teachers if it doesn’t address the issue.

The district is increasing funding for the Academy for Urban School Leadership, a nonprofit that runs 19 schools in the district and trains teachers. Funding for charter schools will remain level— a decision immediately blasted by the Chicago Teachers Union.

“Charter funding remains stable… neighborhood school programs are being cut, so it’s increasing the gap between the haves and the have-nots in the system,” said union leader Jackson Potter. Potter said if the district went after TIF funds diverted from schools, CPS could “easily” pay for teachers raises.

Despite all the cuts, the district was still unable to balance the budget. For a second year, CPS will dip into reserve funds to close the gap, drawing $241 million from the fund.

The total proposed budget, which includes capital outlays and service on the district’s debt, is $5.91 billion, with an operating budget of $5.11 billion. Hearings on the budget begin next week.

Updated at: 10:30pm on 8/5/11