Cross City Campaign for Urban School Reform’s analysts have monitored the Chicago Public Schools budget for more than 20 years. Our goal is to dig beneath the rhetoric to understand what lies behind the numbers and share this information with the public. We advocate for equity so that every student in every school gets his or her fair share of funding, and for CPS to push as many dollars as possible to the school level, giving principals and local school councils authority over those dollars. We do this because we believe that budgets are about students, program priorities and support for good teaching and learning.

Our analysis of the budget finds that CPS is losing credibility, that the best interests of children are not represented in budget decisions and that disadvantaged children are bearing the brunt of budget cuts.

One year ago, Cross City Campaign reported on a crisis of confidence in the system’s ability to manage its finances. Our analysis of the FY2006 budget found numerous mistakes. Regrettably, the FY2007 budget is just as murky, with numbers that change from day to day. For example:

* Shortfall projections are unreliable and unsubstantiated.

* $626 million for capital projects is missing from the budget.

* Enrollment projections used to justify special education cuts changed three times in one week.

* Central office cuts do not equal the $25 million reported.

* CPS hides additional central office positions in school-based units.

* CPS for the first time reported that central office staff totals do not include more than 600 consultants.

Our analysis also finds that when there are choices to be made, students and school staff must get in line after mayoral political interests. CPS has made deliberate decisions that jeopardize future revenues and the long-term stability of the system by:

Encouraging the creation of Tax Increment Financing districts (TIFs) that siphon money away from classrooms. TIFs are a policy tool intended to jump-start development in blighted areas of a city. A legal loophole allows Chicago, like many cities, to create TIFs in areas already experiencing growth in property values. The city captures the increased property tax revenues and then channels them to developers. This, in turn, takes the revenue increases away from local taxing bodies. While property taxpayers in those areas appear to be paying taxes for schools, parks and city services, millions of their tax dollars are really going into TIFs.

CPS has lost hundreds of millions of dollars in revenue over the years, funds that could be used to pay for day-to-day costs like classroom teachers, supplies and special education services. Rather than discouraging the creation of TIFs, CPS board members have encouraged parents to lobby for new TIFs.

Supporting the plan to sell the Illinois lottery even though funds will dry up after four years. The CPS Board of Education endorsed Gov. Rod Blagojevich’s plan to sell the Illinois Lottery, although CPS itself admits that after the initial proceeds are spent, there will be no additional revenue.

Negotiating balloon payments that will cost $80 million a year. In 2010, CPS’ debt payments will increase by nearly $80 million a year. This increased cost may have gone unnoticed because it will occur at the same time the School Finance Authority’s debt obligations expire. (The finance authority is now defunct.)

CPS could have let the finance authority’s debt be paid off and lightened the burden on individual property taxpayers, or put that money into the classroom. Instead of having an additional $80 million dollars each year to pay for programs, CPS chose to take on more debt.

These are just three examples of how CPS is willing to jeopardize future resources for the sake of short-term gains. In the end, children lose. That brings us to the most disturbing fact in this budget: Disadvantaged children bear the brunt of budget cuts.

CPS claims to have cut 200 special education teachers and 700 special education aides partially because of enrollment declines. However, CPS presented three different special education enrollment figures during the course of one week, and their projections for next year were actually higher than current special education enrollment, thus undercutting their rationale for cuts.

CPS has also been siphoning money away from the poorest schools for decades by changing the federal Title I formula, forcing schools to use supplemental general state aid (formerly called state Chapter 1) and federal Title I dollars to buy basic programs.

Supplemental general state aid I and federal Title I dollars provide supplementary programs for low-income children. CPS uses formulas to distribute those dollars to schools. While CPS gets more funds each year, it rarely puts any of those new dollars into the formula.

In 1998, CPS received $170 million from federal Title I. In 2006, CPS received $297 million. Yet CPS chose to distribute to local schools only $17 million of the $127 million increase

Over the last several years, CPS has also changed the federal Title I formula to decrease the amount of money going to schools with the highest poverty rates. In FY2006, schools in the lowest poverty range received $480 per student, up from $200 per student the previous year. At the same time, CPS took $180 per child away from schools with the highest poverty.

Likewise, while CPS received $400 million more a year in general state aid than it did in 1998, not a single dollar has gone into the state Chapter I formula to be distributed to schools. As the purchasing power for those dollars decreases each year, the poorest schools have less and less to provide supplementary programs to their students. Meanwhile, CPS gets more and more state and federal poverty funds to spend as the district chooses.

At the same time, schools have been forced to use their dwindling dollars to replace basic services.

Over the years, CPS has cut truant officers, security guards, elementary school assistant principals, and teacher aides, among other positions. When CPS cuts those jobs, schools must turn to their poverty dollars to pay for the services.

In addition, schools that are struggling the most academically have been given a mandate to purchase reading and math programs and coaches from central office. In a February 2005 memo, probation schools and other low-scoring schools were notified that “area instructional officers have the authority to lock 100 percent of a school’s discretionary funds until the AIO and the principal agree on a budget plan.” The memo goes on to list mandated programs with costs attached.

Meanwhile, CPS has been funneling basic dollars away from low-income schools to schools that are not poor enough to qualify for poverty funds. Under the “minimum funding program,” affluent schools have been getting up to $200,000 each year in extra basic dollars.

Cross City Campaign believes that CPS has a responsibility to provide a high-quality education to all students and to ensure that the most disadvantaged students share equitably in the resources.

CPS’ budget document is the most powerful policy tool the district creates. It should be transparent and reliable. CPS resources should be distributed equitably, and the district should serve the best interests of all the children. CPS is not meeting these standards. We believe that CPS must regain the public trust.

Christina Warden is the senior program director for school-based budgeting and district redesign at Cross City Campaign for Urban School Reform. She has 18 years of experience analyzing CPS budgets and training local school councils to understand school budgets.

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