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Examining the CPS budget

by karen lewis - ctu president  |  07/26/2017

The proposed 2017-2018 Chicago Public Schools budget categorizes cuts to school communities that have happened over time. Due to strong member advocacy, there are some major wins for us, such as clerk positions being protected and an end to the commingling of special education and general education budgets. But while the district has trumpeted some positive changes, the changes on a whole still fail to stem the tide of under-funding that continues to slash programs and resources, and causes student enrollment to decline in district schools.

Where is the Revenue?

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.

Even after accounting for additional funding CPS hopes to get from the state via SB1the budget will still have a hole of more than $200 million.

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.

The devil is in the details

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
Black communities lose again under Rahm

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%
BURNSIDE 3019526 2739132 -280394 -9.3%
DOUGLAS 36874280 34366071 -2508209 -6.8%
CALUMET HEIGHTS 10323157 9758154 -565003 -5.5%
ROSELAND 44462759 42590188 -1872571 -4.2%
ENGLEWOOD 51056543 49000918 -2055625 -4.0%
AUSTIN 76489030 73517778 -2971252 -3.9%
WASHINGTON HEIGHTS 41748295 40172134 -1576161 -3.8%
UPTOWN 30387550 29350956 -1036594 -3.4%
WEST PULLMAN 22756848 22041315 -715534 -3.1%

* denotes totals in dollars

High schools lose the most

District high schools are again taking the brunt of the impact. High schools will lose nearly $15 million, or a 2.3 percent cut.
 
District schools stand to lose a total of 1 percent, or more than $18 million in funding from their final FY2017 budgets, but this masks the steep declines that are happening across many schools.
 
Especially hard hit are South Side schools. Schools covering the South Side and Far South Side communities in Networks 12 and 13 will experience budget reductions of $6.8 million from their final FY2017 budgets. The 10 high schools in those networks are losing $3.4 million overall.
 
Other high schools throughout the city are also suffering devastating cuts. Kelly High School stands to lose more than $1.6 million or 9 percent of its budget. A couple miles east, Dunbar will lose $1.4 million or more than 21 percent of its budget.

Special education

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.
 
That process led to discriminatory funding last year, with a disproportionate number of appeals being granted to schools in wealthier neighborhoods, while schools serving Black and Latino schools were turned down.

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
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Chicago Teachers Union