5 Things To Know About Chicago’s $7.5B Public School Budget
As he heads into an election year, Chicago Mayor Rahm Emanuel is proposing big school spending and he’s painting a rosy picture of the school system’s financial outlook.
The Chicago Board of Education is set to vote Wednesday on a budget that increases total spending 8 percent to $7.5 billion, including a $989 million budget to repair, upgrade, and build new schools.
Emanuel said the school district can afford the increase after winning more money from the state last year in a new education funding law.
But here are five things that taxpayers, school staff, and parents should know about the budget before it is set in stone:
1. An open-ended fund?
There’s a huge pot of unallocated money baked into the budget that Emanuel and school district officials can apparently use any way they want. In fact, they are already using it.
Every year, the school district sets aside a couple of hundred million dollars for contingencies. In the past, the contingency fund has been used for such things as providing more money to schools that get more than the projected number of students or to pay for insurance claims or for unexpected interest payments.
This year, the school district is proposing to set aside $370 million — up $70 million from last year. And Emanuel and district leaders are already planning on using $26 million of that to pay for 160 social workers and 94 case managers. School district officials announced the positions last week. CPS leaders say they are using the contingency fund for those positions because the plans weren’t finalized until after the budget was officially proposed on July 6.
Bobby Otter, budget director for the nonpartisan Center on Budget and Tax Accountability, said it is prudent for a public school system as big as Chicago’s to have a contingency fund, but questions why it is so large. Further, he notes that in budget documents, there is no way to track how leaders plan to spend it or how it was spent in previous years.
2. Additional social workers and case managers may be an empty promise
It is unclear if there is real money to fund the contingency budget. District officials said the contingency budget is allocated “when revenue materializes throughout the year.” But they said the revenue for the additional social worker and case manager positions is “assured.” When asked to prove it in the budget, officials didn’t respond.
Pavlyn Jankov, who is an education policy analyst for the Chicago Teachers Union, said that funding these positions through contingency adds to the union’s suspicion that this is “just a PR headline without any affirmative funding lined up for it.”
Chris Yun, education policy analyst for the disability rights group Access Living, said she is concerned that CPS knows it won’t be able to fill these positions anyway. CPS is not only promising the extra social workers and case managers, but also an additional 160 special education teachers and 170 special education teacher assistants.
In Illinois, there is a shortage of special education teachers and clinicians, such as social workers. Yun notes that the district announced in January 2018 that it was going to hire 65 additional special education positions, but that by May had only hired 25. In Access Living’s analysis of the budget released Monday, it called that announcement “another hollow plan.”
Access Living goes on to urge the school district to establish “an affirmative recruitment plan” based on the current number of available special education teachers and clinicians, rather than “passively opening special education jobs.”
3. Another question mark in the budget
The school district does not have firm plans set out in the budget for how it is going to get the money needed to complete all the promised building, renovation, and repairs. Mayor Rahm Emanuel announced a massive plan earlier this month, committing to build three new schools, four additions, fix or provide new boilers and roofs for dozens of schools, and upgrade technology and science labs.
According to the CPS budget, the school district plans to spend $989 million on these projects but only has $446 million in revenue to support the plan. That leaves a $543 million deficit. CPS officials said that additional money is available from a prior year’s bond refinancing. Also, they said they are prepared to borrow $305 million more when it is needed.
But both the Civic Federation and the Center for Tax and Budget Accountability said the lack of clear plans for borrowing is shaky. “This raises the question of whether it will all be done,” said Bobby Otter, budget director for the nonpartisan Center on Budget and Tax Accountability. “It is far from a guarantee.”
Something else worth noting: many of the projects have “To Be Determined” start dates.
4. Deficit spending, debt, and pensions still burden the budget
In order to balance the $5.9 billion day-to-day operating budget this year, the school district plans to use $62 million from reserves. That means it is dipping into its already depleted savings account. Otter said this is the seventh year in a row that the school district is spending more than it is bringing in.
The school district has $8.2 billion of outstanding debt. This year, it will make $606,000 in debt payments. That is $1,600 per student going to debt payments, rather than additional teachers and other staff. And CPS is projecting that debt payments will go up in future years.
Pension payments made by CPS are also projected to increase by about $20 million a year. In the budget book, the school district notes that it is greatly helped by the state providing more money to CPS and a new pension levy. Yet the school district predicts that it will be nearly 20 years before it won’t have pay into the pension fund with money that could otherwise pay for education.
5. Fewer students, but increased spending
Despite the looming budget problems, almost every department in Chicago Public Schools is getting more money and positions. The school district is also creating two new departments, one to focus on equity and the other to investigate and handle sexual harassment and bullying between students.
Meanwhile, the school district’s enrollment continues to go down. Last year, the school district had about 10,000 fewer students than the year before. And over the past five years, it is down more than 30,000 students.
Civic Federation president Laurence Msall said he is puzzled that a school district losing students is planning on adding positions and spending nearly a billion dollars on buildings. In the Civic Federation budget analysis, it notes that the number of administrator positions has gone up by 6.6 percent since 2015. Msall said this is an ongoing problem that the school district has to deal with. Additional spending “needs to be tied to a long-term plan about which schools the school district is planning to keep open,” he said.
But others note that even with the extra positions, the school district is understaffed. Class sizes are bigger than state averages and bigger than recommended. Further, even with additional clinicians, there are too few psychologists, social workers, and nurses, according to experts.