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Lawmakers question CPS on budget

CEO Jean-Claude Brizard and Budget Director Ginger Ostro detailed the district’s budget woes before an Illinois General Assembly committee today at a hearing on the Illinois State Board of Education budget.

Committee members asked the CPS officials to appear as part of an examination of whether to shift CPS from a block-grant funding system – where the district is guaranteed a certain percentage of some state funds – to a system where CPS would have to account for each dollar of state money it spends, as other districts do.

It’s not clear whether the idea will gain traction, but committee chair Rep. William Davis (East Hazel Crest) said at the hearing’s close that “there’s been a lot of concern from members” that funding may need to be adjusted as enrollment in CPS has declined. In recent years, other large districts in the state have advocated that they, too, be allowed a set percentage of state block grant funding.

The district responded to questions about the projected financial impact of an end to block-grant funding by saying that “given the significant fiscal challenges that CPS is facing now and in the next three years because of our pension costs, any change that would impact the amount of funding we receive from the state, as block grants or reimbursement could mean deep cuts in the classroom.”

“We believe that block grants improve outcomes by providing flexibility and give decision- making authority to local districts and schools to better meet the unique needs of their students,” the statement said. (As for the coming year, the district says that school-level budgets will be released sometime before the month is up.)

Skepticism about the size of CPS budget deficits is widespread among the district’s critics, but Ostro made the case that ballooning pension costs – which will eventually include larger-than-normal required contributions because a three-year “pension holiday” declared by the legislature is expiring – spell indisputable trouble for the district.

 “Even if we eliminated the entire central office three times over, we couldn’t close the budget gap,” she said. Central administration spending is just $120 million.

By fiscal year 2014, she said, pension expenses alone will be 10 percent of the district’s operating budget.

“This is a significant fiscal pressure we’re facing, and one we look forward to discussing and working with you to address,” Ostro told the legislators. She also pointed out that Chicago is the only city in the state, and one of the only urban districts in the country, that funds its own teacher pension system.

Davis questioned Ostro sharply over the district’s use of roughly one-fifth of its general state aid funding to pay debt service fees. “We would hope that was money that would be going to the classroom,” Davis said.

Ostro responded that the practice had been occurring for over 10 years and that she didn’t know if it was typical among other districts. Earlier in the presentation, she had pledged that CPS would mend its ways. She noted that the district will release its capital plan on May 1st and is clamping down on capital spending. From now on, she said, capital projects will generally be limited to those required for the health and life safety of students.

However, Ostro noted, even as capital spending decreases dramatically, debt service costs will keep going up.

This year, Ostro said, CPS used about $240 million in reserves to balance its budget. When questioned, she noted the district expects to have $289 million in unrestricted reserves left at the end of the 2011-12 fiscal year.

Another committee member lectured CPS on the importance of working with the Chicago Teachers Union, which is currently in negotiations with the district, to devise ways of saving money.

Rep. Edward Acevedo (Chicago) questioned why it took so long for the district to make capital improvements in buildings that were listed in the line-item capital budget, citing complaints from constituents but declining to mention the names of specific schools. He also asked Ostro to look into food handling procedures, claiming he heard from a produce company that their vegetables spoiled rapidly in CPS kitchens because they are stored next to hot food.

“Clearly we would not want to be wasting fresh fruit. That’s a very important part of what we’re trying to bring into the system,” Ostro said.

3 comments

Anonymous wrote 2 years 31 weeks ago

EASY FIX

Repeal the "500,000" citoy of chicago clauses!! This would show CPS teachers legislatures give a rats adress about the CTU memebers!! I dont get why CPS doesnt lose it's autonomy immediately?????????

George N. Schmidt wrote 2 years 31 weeks ago

Capital spending will go down, but debt service "up"? WTF?

I was hoping that Catalyst would devote some time to learning a bit of elementary school math, but I guess that's too much to ask. Any publication whose publisher (a year ago, on WBEZ) could talk about how CPS had a "deficit" of "zillions" is going to continue to be clueless in the face of facts.

But at least the following could have been elucidated. Above, you report:

"[CPS budget director Ginger] Ostro responded that the practice [of repaying debt out of state funds supposedly going to kids' education] had been occurring for over 10 years and that she didn’t know if it was typical among other districts. Earlier in the presentation, she had pledged that CPS would mend its ways. She noted that the district will release its capital plan on May 1st and is clamping down on capital spending. From now on, she said, capital projects will generally be limited to those required for the health and life safety of students.

"However, Ostro noted, even as capital spending decreases dramatically, debt service costs will keep going up."

I'm sorry I missed that hearing, but...

WTF?!!!?

Apparently, what CPS is saying is that it's going to spend its capital money where it pleases, while saying it's not. Anyone who believes that should walk down the block at 606 S. State St. (the newest new new Jones) and ask how long that project has been going on and what the total cost has already been. (Hint: The conversion of Jones Commercial to "Jones College Prep" began in 1998 and has cost hundreds of millions of dollars, a part of which it being spent right now on that "new" building, which is supposed to be followed by the demolition of the -- recently remodeled -- "old" building).

Ever since the former mayor decided to put the "Region Three" college prep high school at the eastern edge of the "region" (remember: the college prep high schools were supposed to be "one per region", but somehow three of them — Payton, Jones, and King — got plucked down within a mile of Lake Michigan...), the Jones project has been creating a huge sucking sound as money gets sucked away on the newest latest or most recent project to create the Jones of the future. Since this Jonesing began, CPS has graduated four generations of high school kids though Jones, and it's still going on.

Of course, there could have been other examples. Why did CPS have to rape and murder Carpenter elementary to create a nonsensical "Ogden High School" (while stripping down and completely rehabbing the Gold Coast's favorite elementary school) when CPS has an empty building (Near North Career Magnet) right there, unused?

It's good that the legislators are asking serious questions. One of the questions that needs to be asked, however, is how many people in the current budget, finance and capital offices at CPS have been there more than 18 months. Like all the rest of Rahm Emanuel's version of leadership people, the budget people are basically FNGs, no matter how seriously they try to answer questions that would require a bit of institutional memory. Of course, one of the people who might have answered some of those questions used to be involved in CPS budget work, and was probably sitting in the hearing quietly taking notes. But Beth Swanson is no longer at CPS, having been recycled through the Pritzker charities and most recently having been deployed to work as Rahm's liaison with the public schools. Next time maybe a senator or rep can ask here some of the questions that the newest new staff people can't remember the answers to because (a) there are no real institutional records, just vacuous Power Points and doctored spreadsheets and (b) nobody's been over at Clark St. long enough to know how to get from Bowen to Bogan without their GPS.

cps neighborhood hs teacher wrote 2 years 30 weeks ago

the ground level reality of capital expeditures

I teach at a SIG funded transformation CPS high school that purportedly received 2 mil for the honor of qualifying for that grant. In that SIG grant, we negotiated for 24 lcd projectors BUT they are unusable because CPS "can't" ceiling mount these ceiling-mount-only LCDs (they have no zoom function) because they don't have the capital funds. For crying out loud, why was that expenditure approved when CPS knew it wouldn't follow through to make our ISBE SIG grant expenditure functional? To repeat, we get a SIG fund of 2 mil, we lose 2 mil of school funding, we spend a part of the SIG money on LCDs that CPS has no intention of mounting on ceilings to make them usable. This is classic CPS mismanagement. Veteran teachers chime in! You know what I am talking about. Share your stories == is it CPS incompetence OR collusion to destroy neighborhood schools?

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