Posted August 6, 2007–Chicago Public Schools today released a $5.8 billion “keep afloat” budget that includes an additional $98 million in expected state aid and a 3-percent raise for teachers.

School officials also plan to raise property taxes to the limit, generating about $55 million, and to use about $73 million in reserve funds, to fill a deficit of $165 million and increase educational programs by $60 million, according to Finance Chief Pedro Martinez.

With legislators still at an impasse over the state budget, it’s unclear how much state funding CPS will receive. Consequently, the district based its budget on the more conservative of two state spending proposals, pushed by House Speaker Michael Madigan. Budget planners decided not to bank on an alternative plan from Senate President Emil Jones Jr., which would have netted Chicago between $180 million to $190 million.

Madigan’s bill provides for increases in state aid that mirror what Chicago received in recent years.

The School Board must, by law, approve a budget by Aug. 31. Required public hearings will be held on Aug. 14 at Lane Tech, Aug. 15 at Juarez Community Academy and Aug. 16 at Morgan Park Academy. All meetings start at 7pm. Officials plan to present a final budget to Board members on Aug. 22.

If state funding falls short of the district’s projected $98 million, CPS officials say they will first cut back on $60 million it now plans to spend on enhancing education programs. [SEE SIDEBAR]

Tax hike in the works?

Advocates for school funding reform could still win a significant boost in state funding. A recent move by three powerful unions just might provide the necessary support.

The Illinois Education Association, the Illinois AFL-CIO and the Illinois Federation of Teachers (the Chicago Teachers Union belongs to the IFT) last week called for a ¼-percentage-point hike in the income tax to fund schools and other priorities. That would raise nearly $800 million extra for schools, they estimate.

The labor groups may be able to persuade the Democratic legislative leaders to give their support. Madigan recently said that the state should consider an income tax hike, and Jones said he was open to the idea.

But time is of the essence. Even if more money comes to Chicago, the district and schools will need time to figure out how best to spend it.

“One of the most frustrating things that I’ve had in my six years in this job is that every year we come to Springfield, hat in hand, looking for what our resources are going to be the next year,” CEO Arne Duncan said during a recent visit to testify to legislators. “There’s no ability to plan long term.”

3-percent raises

Meanwhile, contract negotiations and the prospect of a teachers’ strike are looming over the district.

Teachers are negotiating a contract for the first time since 2003 and want beefed-up benefits and job protections to go along with raises. They got 4-percent raises in each of the last four years, compared to the 3-percent “placeholder” raises the district planned for while crafting its new budget. (Martinez says ongoing negotiations with CPS’ other employee unions factored into the 3-percent figure.)

Joey McDermott, a union delegate and social studies teacher at Crane Tech, says he and other teachers expect a 4-percent raise at a minimum.

“We’re not thinking about the [state budget crisis] at all,” he says. “Right now teachers are talking strike.”

Mike Vaughn, a CPS spokesman, describes the 3-percent raise as “a very soft number” that is subject to negotiation. An additional 1 percent would cost the district nearly $25 million, he says.

The district may have some wiggle room for negotiation. Cash reserves are currently hovering around $300 million, nearly $50 million above rating agencies’ expectations, according to officials.

Springfield correspondent Aaron Chambers contributed to this report.

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