Blaming a decline in state aid and a “broken” pension system, Chicago Public Schools announced Wednesday that it would cut $200 million in spending for the coming school year by eliminating 1,400 positions, leaving special education vacancies open and cutting stipends for elementary school sports coaches, among other reductions.
Mayor Rahm Emanuel said the cuts wouldn’t increase class sizes or prevent school from starting on time, but cautioned they would affect how schools are run.
“These reductions are necessary to minimize cuts to the classroom as much as possible, but the classroom will be affected,” said Jesse Ruiz, CPS’s interim CEO.
Ruiz said the 1,400 job cuts — which include 350 vacant positions — would be spread across central office, special education support services and other programs. “Very few,” he said, are teachers.
CPS began issuing layoffs to central office staff Wednesday, but school-based staff won’t be informed until school budgets are released later this summer.
Jesse Sharkey, the vice president of the Chicago Teachers Union, said while much remains unclear about the cuts, what has been announced would do “real damage” to schools and affect the “most vulnerable learners.” He said the union was concerned about any cuts to special education and that it was “too early to tell” how many CTU members would be affected by the layoffs.
Laundry list of cuts
CPS said it planned to overhaul special education services and staffing after conducting an 18-month review. The review found that CPS “currently exceeds the state’s standards for special education staffing,” which the district said was due to “mismatches between shifting enrollment and staff hiring.” CPS said the special education overhaul would save $42.3 million, including $14 million from not filling 200 vacant positions.
The district said it would preserve extra funding for students with severe intellectual disabilities and medical needs.
CPS plans to eliminate 5,300 stipends for elementary school sports team coaches, a cut of $3.2 million. If principals wanted to continue their programs, they’d have to use discretionary funding.
CPS said it would cut network office spending by $17.4 million, impacting teacher development programs and start-up funding for new turnaround schools. Another $11.6 million would be cut from professional development for turnaround schools.
The district said it would eliminate $15.8 million in start-up funding for newly approved charters, contract schools and alternative learning option schools, as well as reduce the facility repair and maintenance budget by $11.1 million.
By consolidating pick-up stops for magnet school students, the district estimated it could save $2.3 million. By pushing back high school start times an average of 45 minutes, the district said it could save $9.2 million in transportation costs. CPS said the change wouldn’t cut into high school instruction time.
Other cuts that didn’t have price tags included reducing funding for software licensing, freshman orientation, attendance grants and academic competitions.
Emanuel: Everybody should give something
Emanuel issued a proposal Wednesday that he said could help solve CPS’s financial woes. He suggested either creating one state pension system for Chicago teachers and those across Illinois or a series of changes he dubbed the “grand bargain.”
That compromise would include the state increasing education funding and picking up the annual cost of Chicago teacher pensions — known as the “normal cost.” In exchange, Chicago would again levy taxes to put toward its teacher pensions, as it did prior to 1995. That .26-percent tax would amount to about $175 million, Emanuel said.
Emanuel also proposed eliminating CPS’s pick-up of 7 percent of teachers’ pension costs, leaving them with a 9-percent contribution. Right now teachers pay 2 percent. The 7 percent pickup began decades ago in lieu of salary raises one year.
“Everybody would have to give up something,” Emanuel said.
Sharkey said eliminating the pension pick-up was “troubling” to the teachers union because it appeared CPS was “backsliding” on a commitment it had made previously at the bargaining table. He said cutting the pension pick-up amounted to a salary decrease.
“That’s just not going to be acceptable,” he said. “The union wouldn’t back down from that.”
Last month, both the union and CPS were looking at a one-year contract deal that kept the pension pick-up and preserved teachers’ steps and lanes, without giving them a salary increase.
Sharkey said the two sides were bargaining as recently as Monday, after hitting an impasse last week over issues such as teacher evaluations and grading policies. Sharkey said a one-year contract was still on the table.
Buying more time with pension deal
Earlier Wednesday, CPS leaders met with the board of trustees at the Chicago Teachers’ Pension Fund, where they made a pitch to change how the district makes its pension contributions — just one day after completing a $634 million pension payment for the 2014-15 school year.
Ruiz said the district had to borrow money to make that payment on time — though he didn’t specify where the loans came from — and was now facing a $1.1 billion operating deficit for the coming school year.
CPS asked to make monthly pension contributions starting in January 2016, instead of one lump-sum payment at the end of June when the budget year ends.
The deal would let CPS pay $180 million in monthly installments in the coming school year and then push off $496 million in pension costs into the 2016-17 school year.
CPS would have to pay 7.75 percent interest on the deferred payment — a sum that totals $9.6 million — in addition to the full payment for the 2016-17 school year. The grand total would come to nearly $1.2 billion for that school year.
CPS said it would need help from Springfield to become more financially stable.
“Without the help of lawmakers, we will continue to face tough decisions year after year of paying our pension obligation or operating our schools,” Ruiz said.
In a letter to its members, the Chicago Teachers’ Pension Fund said its board had voted to generally support CPS’s pension payment proposal and a subcommittee will continue to look at it. The subcommittee is expected to make a recommendation to the full board before its next meeting on July 16.