As they prepared to approve CPS’ $6 billion budget on Wednesday, board members asked district officials hard questions, many of which they didn’t yet have answers to.
In order to balance the budget, CPS officials had to close a projected $712 million deficit. They did so by proposing a budget rescinding 4 percent raises promised to unionized workers, including teachers, and saying that they were going to make deep programmatic and administrative cuts.
The budget was unanimously approved, even though negotiations over the raises are still ongoing and some of the programmatic and administrative cuts will be determined over the next month and a half.
Under the new budget, 75 percent of the district’s expenditures will be in school budgets; 3 percent will be in Central Office, and 1 percent will be in network offices, Chief Administrative Officer Tim Cawley said. The remaining 21 percent are in citywide services such as food service, transportation, and teachers that work at multiple schools.
Even with the budget cuts, the district still has a $241.1 million deficit that will be covered by its reserves.
“We felt that cutting expenses another $240 million to avoid tapping into our reserves would have been draconian,” Cawley said.
Board member Penny Pritzker asked for more details on how district officials prioritize capital projects. Cawley responded that it will depend on the results of the district’s portfolio study. On Wednesday, the board hired Oliver Sicat to be its first Chief Portfolio Officer. Sicat has been the principal at Noble Street Charter School’s UIC College Prep campus for five years and is a former math teacher. He has his masters’ degree in education from Harvard University.
He will be charged with figuring out how to make sure that each neighborhood has good schools and not too many empty seats. The district also has the Parthenon Group studying the distribution of school seats around the district in a “portfolio analysis” research project.
Cawley said the district has a shocking number of under-utilized schools. A report done last year showed that 156 CPS elementary school or 38 percent of all district-run elementary schools are half full.
But key to answering the question of which schools to close and which schools to invest in is answering the question of what kind of school district CPS will be.
“If the goal is to have children walk three blocks to school you invest differently than if 20 to 30 percent are getting on the bus to go to a magnet or charter school,” he said.
Board member Henry Bienen asked for a breakdown of where the district’s charter and contract school money went. Because of new charter schools and increased enrollment in some of them, some 5,000 more students are attending them and the amount allocated to them increased this year to $426.9 million, from $361.1 million last year, Cawley said.
“We don’t have that detail,” Cawley responded. “We pay the charters a per-pupil amount and they are free to spend that however they want… some of them share their financial performance with us.”
However, Cawley said, CPS does need to get tough on under-performing charter and contract schools.
“We are delayed with that return on investment in many charters and disappointed with it in others,” he said. “We need to turn that disappointment into action.”
Another big question looming over the budget is what will happen with the teacher’s pay raises. By not paying the 4 percent raises to unionized workers, officials have said the district will save $100 million, $80 million of which would have gone to teachers.
CTU officials said on Monday that CPS negotiators told them they couldn’t afford a raise at all. Then, on Tuesday’s “Chicago Tonight” television program, Brizard offered elementary school teachers a 2 percent raise if they would agree to lengthen the school day by 90 minutes and the school year by two weeks.
Chicago Teachers Union president Karen Lewis questioned why the raise was brought up after talks with the district had broken down, and on television instead of at the bargaining table.
“That would have been something I could have brought to our membership,” she said. On Tuesday evening, the House of Delegates met. “It would have been nice if they had given it to us during the negotiations… for some reason they decided to do it on Channel 11.”
She said she believes the district will move to a longer school day eventually, next school year, and “I’m hoping we can use that time to plan for it appropriately.”
However, she said, she is not getting a positive reaction from teachers over the offer for this year.
“They are not happy,” Lewis said. “They’re doing the math and they are coming up with $3 an hour (for the extra time). That’s what they’ll be making.”
Many supporters of a longer school day, wearing stickers that said “90 More Minutes,” rallied before the meeting and showed up to signal their support for the district’s efforts.
Rev. Marrion Johnson, Sr., the pastor at Come Alive Ministry of Faith on East 73rd Street, said a short school day is partly to blame for the district’s 300 failing schools.
“We need to have 90 minutes more, longer school days, and it needs to begin now,” he said. “(It will give students) the opportunity to become contributing members of our society, rather than menaces to our society.”
In a budget presentation, schools CEO Jean-Claude Brizard outlined his goal of creating a “leaner, more agile central office” and noted that despite this year’s cuts, the system is facing a potential fiscal disaster down the road.
“We have some pretty scary numbers coming our way in a few years,” he said, including projected deficits of $362.5 million in fiscal year 2013 and $861.7 million in fiscal year 2014, even without giving employees any raises.
Board president David Vitale said part of the problem stemmed from the state failing to contribute to the Chicago Teacher Pension Fund, which it customarily had done because Chicago taxpayers contribute to the teacher pension fund that covers the rest of the state.
Even as the number of teachers employed by the districts has decreased, salary costs are going up, including a $35 million increase for teacher step and lane increases, and a $25 million increase in health care costs. The district has lost more than 2,000 teaching positions since fiscal year 2007, but total costs have gone from $1.9 billion to more than $2 billion.
“As our number of teachers declines, the expense of investing in teachers has gone up, year after year,” said Cawley. So are the costs of paying for the district’s capital projects debt.
“I am tired and embarrassed of responding to questions about how we will close that gap with, ‘I don’t know,’” Cawley said. “We have got to develop a plan… we cannot save our way to success here.”
As for this year’s cuts, many haven’t been figured out yet. The district is relying on a forensic audit of Central Office. Preliminary results indicate that the chief education office will slash $50 million, including money spent with “vendors that we’re not really sure what we’re getting for it.”
Cawley says the district will report back the audit’s findings at the September board meeting.
“This organization has become blunt, inefficient, overcomplicated, and is allocating too much money into areas that are not delivering value for our students,” he said.
The budget for network offices has also been cut nearly in half, from $74.6 million last year to $42.6 million this year.
Violence prevention programs are losing about a quarter of their funding this year, or $9.1 million, and Cawley said CPS will try to work with other city agencies to “get some synergy” and see if they could take over any of the work. Ultimately, he said, the $31.7 million that CPS is still planning to spend is money that isn’t going toward educating students.
He also noted that some special education expenses “can be trimmed back, without having any impact on students, where we are not getting a return on our investment.”
But, he said, the district has increased expenditures on all classroom-related categories, except for a $5 million cut to textbooks and supplies. “The schools are where the money is,” he said. Magnet, early-childhood education, turnaround, and special education funding are up.