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Extra, Extra! The Curious Tale of the CPS’ “Press Release” Budget

by CTU President Karen GJ Lewis, NBCT  |  01/28/2013

CHICAGO - The audit of the Chicago Public Schools (CPS) financial results, the Comprehensive Annual Financial Report (CAFR) for the year ending June 30, 2012 was quietly released at midnight on Wednesday of last week. With more than $500 million surplus heading into the new fiscal year, this stealth document effectively blows a hole into CPS’ unchecked claim of a growing “billion dollar deficit.”

The Chicago Teachers Union has long maintained that CPS has an authentic budget and then there’s the “press release budget.” The latter is used to score endless headlines screaming for immediate and drastic action in order to stop the fiscal bleeding.   When the city’s teachers, paraprofessionals and school clinicians took to the streets last year during a labor strike, the voluminous “billion dollar deficit” claim helped the district construct a public triage unit so it could effectively explain why educators couldn’t be paid for working longer hours and why our students couldn’t receive the critical wraparound services, textbooks, art, music and world language classes they so desperately needed.

As the district plans to close schools and displace thousands of its students, Chicago taxpayers and the parents deserve answers. CPS’ financial position continues to improve year after year, but in FY 2011-2012, as the district spent less on textbooks, school supplies and teacher salaries, it continued to push a crisis myth of a struggling school district approaching a fiscal doomsday.

CPS is a public enterprise that has an annual budget in excess of $5 billion, employs over 30,000 and is responsible for the education of more than 400,000 children of the city of Chicago. The audit report received little if any news coverage by the major broadcast and print media. The CAFR is traditionally released in December but was delayed for an unknown reason until January 23. Why? Could it be that there was bad news in the report?

You would think that such an important document would at least glean a bit of scrutiny during this period where there is a constant drone of dire financial predictions up and down the entire governmental spectrum from the federal level to the smallest municipalities.

Locally, the taxpayers are under the impression that the system has lost thousands of students. They hear there is an excess of empty seats in a vast sea of underutilized schools, another myth created by the district to justify its draconian school closing policies. The cost of supporting these schools is undoubtedly causing a flood of red ink. Why else would closures and consolidations be one of the hottest news topics of the day? Students and parents worry that their neighborhood school will be the next to feel the heartless decries from Clark Street.

Let’s see how CPS did in the 2011-2012 school year. Well, during the difficult budget process for this particular year the Board approved a budget that had a deficit of $241 million. Not too good but a lot better than was expected when first reviewed. It will be a struggle to lose just $200 million. Now let us see where the year actually ended--with a surplus for the year of $328 million. This must be a tremendous turnaround orchestrated by savvy bureaucrats. Instead of losing $241 million, CPS made $328 million for an improvement of $569 million. Where’s the press release? 

Could Fiscal Year 2011-2012 been an anomaly? Let’s review a few previous years: In Fiscal Year 2010-2011, CPS budgeted for a loss of $245 million but came in at a surplus of $316 million, an improvement of $561 million, almost as good as 2011-2012. 

For Fiscal Year 2009-2010, the budget was for a net loss of $106 million and the actual number was a net loss of $102 million. In Fiscal Year 2008-2009 it was budgeted for a loss of $145 million but actually end with a loss of $143 million.

Looking back to the four fiscal years starting with 2005 up to and including 2008, the cumulative net budgets approved by the Board, had a combined loss of $290 million. In actuality, these four years produced a combined surplus of $521 million. This was an impressive $811 million positive variance to the official budget approved by the Board of Education.

The combined budgeted losses from fiscal years 2005 through 2012 was $1,027,000,000. But the combined actual net surpluses were $920,000,000. CPS out performed its budget by a whopping $1.9 billion. This should be front page news.

For the start of fiscal year 2012-2013, the net assets of CPS were $1.1 billion. It’s there, just look at the CAFR. But be warned, as another budget season is underway, a deficit of $1 billion is just over the horizon. Perhaps it is time to have an honest budget discussion before any schools are closed, school communities are torn apart and children are dislodged from familiar surroundings. 

Karen Lewis is the president of the Chicago Teachers Union and a national board certified teacher.

 

Chicago Teachers Union