Alderman Arenda Troutman Credit: John Booz

In a small, sunny library on the city’s Northwest Side, eight faces beamed relief after a month of grueling budget meetings. A rookie local school council turned veteran after approving Monroe Elementary’s tightest budget in years.

Faced with a $177,000 decrease in discretionary money—the state and federal poverty funds that councils control—new council members forced a compromise with the principal over spending priorities. When the dust cleared, three teaching positions and three school aides had been slashed from the $1.1 million discretionary budget.

“The budget is a very big responsibility,” says LSC Chairman Miguel Sotomayor. “We were really squeezed.”

Councils across the district are feeling financially squeezed this year, and those at schools on probation find themselves squeezed out entirely.

The percentage of state and federal dollars going into schools’ discretionary pots is shrinking, down 9 percentage points since 1999. And the purchasing power of those dollars ($429 million this year) has diminished significantly, a Catalyst Chicago analysis has found. (See related chart)

Adding fuel to the fire is Chicago Public Schools’ projected $87 million shortfall in general state aid next year—a figure that could soar to $175 million if plans to boost funding with gambling revenue flop. Faced with similar financial dilemmas in the early 1990s, CPS cut hundreds of aides, assistant principals and truant officers to balance its books, and many schools tapped discretionary money to rescue some of those positions.

CPS Budget Director Pedro Martinez says he hopes this time the cuts will not be as deep, but notes, “There’s just no way to cut $175 million without touching the classroom.”

Initially painful for most schools was a district decision—one that it later partially rescinded—to stop counting low-income preschool students in calculations that determine how much each school is allocated in poverty funding. Both Supplemental General State Aid and federal Title I funds are distributed to CPS schools based on the number of low-income children each enrolls. But for the first time, when schools received their preliminary budget allocations in March, some 17,000 poor preschoolers were left out, hitting 383 schools with no warning or explanation. The change would have cost Monroe nearly $100,000 in poverty funds.

The board will also drain $1.5 million from schools’ discretionary coffers by charging them a $2 monthly fee for each computer to connect to the citywide network. (Monroe will have to pay about $4,000 for its 200 computers.)

Meanwhile, the district’s tough probation policy got tougher on spending. This winter, schools on probation received letters from Chief Education Officer Barbara Eason-Watkins advising them that area instructional officers (AIOs) had the power “to lock 100 percent” of discretionary funding until they reached an agreement with principals on how it would be spent. (This year, AIOs could put a lock on 50 percent.)

G. Alfred Hess Jr., an author of the 1988 reform act that gave LSCs control of discretionary funds, says poverty grants were designed to supplement regular board-funded programs, an acknowledgement that it costs more to educate low-income children. As it is, schools with fewer poor students tend to get a bigger share of regular program funds, according to a recent Catalyst study on budget equity. (Catalyst February 2005)

Preschoolers out, back in

For years, CPS included preschoolers when calculating each school’s share of Title I and state poverty funds. But this winter, when school budgets were being prepared, it adjusted allocations for next year to include only low-income students in kindergarten through 12th grade.

After principals slated to lose money balked, district officials revisited the matter and contacted the state board of education to verify they had interpreted the regulations properly. Interim State Superintendent Randy Dunn weighed in, and in a April 6 letter to CEO Arne Duncan, ruled that preschoolers should be included in the state grant formula.

Still, preschoolers will fetch fewer dollars this year. Only poor preschoolers in all day programs will get the full per pupil share of $716. The vast majority, though, are enrolled in half-day programs and those schools will get $358 per pupil. And, Martinez says, the federal rules clearly exclude preschoolers from Title I funding. (See related story.)

Principals whose schools have early childhood programs are heaving a sigh of relief that some of the lost poverty money will be restored. Carlos Azcoitia, the principal at Spry Elementary, regained about $14,000 of the state portion his school’s projected overall poverty fund loss of $100,000. Azcoitia notes that special government grants earmarked for early childhood education pay for preschool teachers, but poverty funding picks up other schoolwide supplemental materials and programs, such as teacher training and new library books.

AIOs hold the purse strings

Regardless of shifting bottom lines, a third of Chicago’s schools have virtually no say in discretionary spending. CPS stiffened its accountability policy in February 2004, more than doubling the number of schools on probation this year to 212. The district also detailed requirements for probation schools’ discretionary spending, shifting final authority from local school councils and principals to area instructional officers.

Eason-Watkins’ letter to probation schools was attached to a menu of “options” for how discretionary money has to be spent. Among the requirements for elementary schools: hiring a second reading specialist—the salary for the first one is picked up by the board—increasing spending on professional development; reducing class size in the primary grades; upgrading math and science programs; and if space allows, providing full-day kindergarten and expanding preschool.

(Before the district restored some of the poverty funding, one principal noted the dictum to expand preschool is “ironic” considering the board’s decision to stop counting preschool students in poverty funding formulas. “No one wants to start early childhood programs anymore,” she says. “You don’t know if they’ll fully fund it.”)

High schools are required to hire one additional reading specialist and a freshman counselor, or extend the existing counselor’s availability by paying overtime. They must also implement the district’s math and science initiatives, which entails converting existing courses to Chicago Math and Science Initiative programs at either a less expensive “slow improvement” level or a pricier “fast track” pace.

Pricing for these measures ranges widely, depending on school size and the options agreed upon by AIOs and principals. For example, the “fast track” science program costs about $173,000 compared to $92,000 for “slow improvement.” Costs for more generic requirements, like professional development initiatives, vary by staffing needs and programming choices.

Xavier Botana, the accountability chief for CPS, says the new spending requirements were carefully researched. A CPS study of districtwide discretionary spending found a link between spending on the prescribed requirements and higher test scores. Botana also cites national research on the benefits of early childhood education.

Some principals, however, say the requirements are a “one size fits all” strategy that conflicts with the spirit behind discretionary funding, which was created to supplement regular programs at the LSC’s discretion.

Principal Shelby Taylor of Revere Elementary, which slipped onto probation after CPS hiked its accountability benchmarks, concedes that the district reading and math programs are doing some good at the South Shore school. But he complains that probation spending priorities cost five teacher assistants and seven parent workers who helped maintain order in classrooms and boost parent involvement.

And probation status has marginalized the LSC’s input on budget planning, says Taylor. “It is a directive from our AIO to review our budget to make sure it meets the criteria,” he explains. Probation spending requirements are more painful for elementary schools than they are for high schools, says Principal John Butterfield of Mather High School, a West Ridge school also placed on probation this year.

High schools have more wiggle room because their discretionary budgets are typically much bigger, he explains. “I pity the smaller schools where money is very tight,” he says.

Mather gets some $1.7 million in poverty funds. The hefty budget gives Butterfield enough financial latitude to take care of required probationary spending—hiring a literacy leader, three math teachers and an extra freshman counselor—and still execute a long-term plan to buy laptops for every teacher. He says the board’s new computer fee, however, sapped nearly $50,000 and will likely cost him a much-needed technical coordinator.

The authority of area instructional officers to lock all discretionary funds is largely symbolic, says Botana from the CPS accountability office. Rather, the spending guidelines are to be viewed as a “guide” for how schools should spend their discretionary dollars. Final decisions are made by AIOs in consultation with principals.

Botana notes that this year’s 50 percent lock on probation schools’ discretionary budgets redirected close to $15 million into “key programs.”

He expects even more will be rerouted in next year’s budgets. “Clearly, as a system, we stated what our priorities are,” he explains.

AIO Cynthia Barron says many of the 14 high schools she oversees on the Far South Side have not been able to hire the second reading specialist required by probation, and instead are making the most of the specialists already on staff.

Barron says AIOs understand that each probation requirement won’t work for every school, and that they seek input from principals and LSCs. Still, “by freezing the budget, there’s no misunderstanding,” she says.

Don Moore, executive director of the research and advocacy group Designs for Change, says the additional layer of central oversight has yet to prove its worth. “Really good principals say [AIOs] are not helping them at all,” he adds.

Tightening and loosening budget grip

The district is moving steadily toward a new budget system where there are three tiers of local budget authority. Schools CEO Arne Duncan envisions the worst performers will be at the bottom and will have spending priorities dictated to them by central management. At the top will be schools with solid academic and financial track records. Money will be allocated to those schools eventually on a per pupil basis, and principals and councils will have authority to draw up their own budgets. (See Catalyst February 2005)

The plan sounds reasonable to William Ouchi, professor of management at the University of California at Los Angeles, who studied CPS in 2001. But Chicago has a rather lackluster record for actually empowering principals financially, he notes.

Ouchi says CPS puts about 19 cents out of every $1 in principals’ hands. More innovative districts give principals 80 percent to 90 percent of financial decision making.

“That means less local flexibility (for Chicago), more shotgun approaches to districtwide programs and it usually means more bureaucrats deciding how to spend the money,” he says.

But Ouchi questions Chicago’s decision to give local school councils final say over budgets. He remembers one principal who struggled with a local council comprised mostly of parents with children in the band program. The council wanted to spend an inordinate amount on band equipment and uniforms.

LSC advocates, like Moore, say the financial control given to councils provides a critical check on principals’ power. An ineffective principal can hurt student achievement by spending too much on office personnel or other non-instructional expenses, he contends.

“Decision making always happens in some sort of political context. You can’t escape that,” says Moore.

Monroe council saves a popular AP

Politics certainly factored into budget planning at Monroe Elementary as leaders struggled to fill a projected $177,000 hole.

Principal James Menconi tried to protect three school aides from cuts, but the LSC had other plans. Menconi and the LSC, lead by Sotomayor, scrapped over everything from teacher supplies to a popular parent mentoring program pushed by a local community group.

In the end, popular sentiment helped Kathleen Bandolik, the new assistant principal, keep her job for a second year. This year, she started a popular Friday morning program for parents called “Café y Conversations,” where community members discuss topics ranging from student testing to healthy eating. She’s also earned a reputation for responding quickly to parents’ concerns. For instance, Bandolik made sure a special education class, where one council member’s son was assigned, was moved from the basement to regular classroom space.

The council won nearly all of its spending priorities, including a request from teachers to spend more on instructional materials, a measure the principal felt was excessive.

“Whatever we do, we have to make sure we keep the kids moving forward,” Sotomayor says.

If they fail to do so, the “discretionary” budget just might disappear.

Intern Alejandra Cerna Rios contributed to this report.

To contact John Myers, call (312) 673-3874 or send an e-mail to

Leave a comment

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.