Examining the CPS budget
by karen lewis - ctu president | 07/26/2017
Even with all the school-level cuts embedded in this proposed budget, and with prior rounds of cuts remaining unaddressed, the budget still relies on more than $500 million in phantom revenue.
This fragile budget is also patched together by unsustainable short-term borrowing.
In FY2015, CPS had a $700 million credit line.
In FY 2016, CPS had a $1 billion credit line.
In FY 2016, CPS spent $35 million just to pay the interest expense on maintaining their credit lines.
In FY 2017, CPS had a $1.5 billion credit line.
In FY 2017, CPS spent $35 million just to pay the interest expense on maintaining its credit lines.
In FY 2018, CPS plans to rely on a $1.5 billion credit line.
The district is already relying on short-term borrowing to open the school year, with $400 million in borrowing to cover delayed state grants from the last fiscal year.
Lenders like JP Morgan Chase are happy to strike deals with CPS because they earn substantially more money in interest. Chase earns more than 6 percent on the “payday loan” deals it makes with CPS instead of the typical borrowing at 1 percent.
At these rates, CPS will waste tens of millions more on interest this year than last year. Without a commitment to sustainable revenue and a Marshall Plan to shore up resources and programming in schools that have suffered from years of disinvestment, the district will continue to fall into further indebtedness to banks.
CPS did plug some more money into the student-based budgeting (SBB) formula, but tempering Mayor Rahm Emanuel and his handpicked CPS CEO Forrest Claypool's claim of putting more money into schools are the deep inadequacies of the district’s spending plan and its actual impact on individual school budgets. Continued reliance on SBB, which punishes schools for enrollment declines, has added up to another unsustainable budget for our schools.
In addition, the multiple rounds of budget cuts by Emanuel and Gov. Bruce Rauner, coupled with the most recent cuts by the Trump Administration, have caused:
- A $40 million decline in poverty grant funding from the federal government
- Schools to lose valuable educators, social workers, counselors and teacher aides
- Instability that has driven a loss in student population
Budget cuts are hitting schools throughout the entire city, but communities on the South and West sides devastated by the mayor's 50 school closings, unprecedented violence and Great Depression-era levels of unemployment continue to lose the most.
|Top Neighborhoods With Cuts||FY17 Budget*||FY18 Budget*||Change*||% Change|
|WEST GARFIELD PARK||16525504||14763771||-1761733||-10.7%|
* denotes totals in dollars
District high schools are again taking the brunt of the impact. High schools will lose nearly $15 million, or a 2.3 percent cut.
In special education, it is clear that Forrest Claypool has walked back his foolish experiment of withholding funds and granting essential special education resources to schools only after staff have jumped through hoops during the appeals process.
Although CPS has stated its commitment to funding special education and keeping those funds from being commingled with other general education funds, it is clear that the level of funding remains woefully short of what’s necessary to meet student needs. District schools coping with cuts to special education will face a total of $23 million in reduced diverse learner funds.
Progress? Some, but we have much work left to do for the schools our students deserve. Stay tuned