In his second year as CEO, Arne Duncan will face stiff challenges that his predecessor, Paul Vallas, never had to deal with: declining state revenues, a sweeping new federal education law and a feisty Chicago Teachers Union led by officers elected to shake things up.

Here are details of the hurdles the Duncan administration must clear in year two.

Declining revenues

State legislators are expected to continue haggling over the budget until the session ends in early June, but CPS is almost certain to lose some funding. In early April, estimates of the damage ran as high as $90 million. Some proposals being discussed in Springfield could cost Chicago even more.

Although $90 million is a small portion of the system’s $3.6 billion operating budget, even a financial loss that small would be enough to wipe out several of the district’s signature projects. Based on this year’s budget, CPS could cut Summer Bridge ($32 million), the Chicago Reading Initiative ($31 million) and its main after-school program ($20 million) and still have to trim another $7 million.

CPS anticipates getting an extra $57 million in property taxes next year, according to Budget Director John Maiorca, but teachers’ pay hikes under the union contract will take most if not all of that amount, according a CATALYST analysis.

CPS stands to gain an additional $45 million in federal Title I funds next year under the No Child Left Behind Act, Maiorca says. But the law’s school choice provisions, which require districts to provide transportation for transfer students, could cost them up to $42 million, he notes.

Civic and community groups have rallied to help Duncan persuade legislators to soften the blow. When he and his team traveled to Springfield to make the rounds on April 4, they were accompanied by representatives from the Chicagoland Chamber of Commerce, the United Neighborhood Organization, the Chicago Urban League and a cross-section of Black and Latino churches.

Duncan says he met with all four legislative leaders, including House Speaker Michael Madigan (D- Chicago) and Senate President James “Pate” Philip (R- Wood Dale), who each “pledged to be as supportive as they possibly can,” but did not make specific assurances.

Unlike Vallas, who had an established network downstate from his years as a legislative staffer, Duncan is new to the state political scene. With legislators focused on getting re-elected this year, Duncan and his team have “a proving year,” when they can solidify their relationships with legislators, says Mary Sue Barrett, director of the Metropolitan Planning Council. Board President Michael Scott, a political veteran with established relationships, gives them a running start, she notes.

No Child Left Behind

To complicate things further, the clock has already begun ticking for CPS to meet some of the new obligations of the No Child Left Behind Act. For instance, students at some 300 schools will be eligible to request transfers to better-performing schools, and the district will be required to provide busing.

So far, the district has moved swiftly to stay on top of the vast new law—compiling a manual of requirements and mapping out timetables that need to be met. But many of the law’s provisions require action by the Illinois State Board of Education, a bureaucracy that has been mired in chaos for nearly a year.

Since Duncan was appointed last summer, ISBE has cycled through two superintendents. A third, Respicio Vazquez, was installed as interim in February. “Those people couldn’t organize a one-car funeral, and here comes this federal law [that] is completely dependent on states having their act together,” says John Ayers of Leadership for Quality Education.

Meanwhile, the board is lobbying for a new state law that would limit the number of schools open to students transferring from low-performing schools. Excluded would be all magnet schools, selective enrollment schools and overcrowded schools at 80 percent capacity or more.

CTU contract

Duncan spent a fair amount of energy this year cultivating a relationship with Chicago Teachers Union President Deborah Lynch. But a day after Duncan’s decision to close schools, a furious Lynch was quoted in published reports: “All bets are off.” (See story, page 8.)

Whatever the state of their partnership next year, the board and the union have plenty to negotiate. Members will be looking for raises, and the board will still be reeling from this year’s budget shortfalls.

Long-term labor peace may be elusive as well. Vallas hammered out two multi-year contracts with the union; Duncan likely won’t get that stability. CTU membership is holding out to regain the bargaining rights the state took away in 1995, like class size and rules for layoffs. Duncan and the board oppose such a measure.

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