The Chicago Public Schools faces such a gaping deficit that Ron Huberman, CEO of the school district, plans to use money in reserves to help resolve.
The Chicago Public Schools faces such a gaping deficit that Ron Huberman, CEO of the school district, plans to use money in reserves to help resolve. But Chicago School Board President Mary Richardson-Lowry said she is unsure if depleting the school district’s reserve fund to balance the budget is prudent. “I have not seen the proposed budget in its entirety but whether or not depleting reserve funds is the right way to go is something I and the board will examine carefully,” she told the Defender. “These are tough economic times and without sufficient funding every thing must be considered.” She added that the board will take up the proposed $6.4 billion CPS budget its Aug. 26 meeting. There will be public meetings on the budget Aug. 17, 18 and 19. “We (the board) want to make sure that if the funds are emptied that it does not violate any board policies. That is the first thing we will look at and then go from there,” she added. Board policy does require that a minimum balance equal to 5 percent of the annual budget by kept in the fund. Huberman said while that is true the policy also allows the district to deviate from the policy due to “extreme circumstances.” Mayor Richard M. Daley told the Defender that given the fact that the state is behind on its bills Huberman must respond with what he has to present a balance budget to the board. “He is responding to what he has in front of him and as CEO he has to do what is necessary to keep things moving and balanced,” Daley said. The mayor is expected to dip further into the city’s reserves to close his anticipated budget deficit, as well. By comparison CPS’ budget is slightly larger than the city of Chicago’s anticipated 2011 budget of $6.3 billion and $400 million more than its 2010 budget. Currently CPS has $190 million in its reserve fund and last year it had $311 million. In the interim, CPS plans to implement an unspecified line of credit, which it plans to repay within a year. State law prohibits the district from using any lines of credit to balance the budget. Huberman said the fund would be replenished once the state pays the district the $236 million it is owed. “We would not have had to deplete our reserve fund and make painful cuts if the state would simply pay its bills on time,” Huberman told the Defender. “Given that fact, I am sure the state will get caught up in time for us to rebuild our reserve fund.” Proposed cuts Huberman is recommending to the school board in order to erase a $370 million deficit include eliminating 2,007 positions, such as teachers, academic coaches and administrative staff. About 1,200 employees will receive layoff notices this week, Huberman said. Thanks to the Illinois Legislature passing a pension relief bill in April CPS’ deficit was reduced by $400 million, which the district projected as high as $1 billion back in January. But the continued reduction in state funding and increases in operational spending has made balancing the budget difficult, according Huberman. “State funding has decreased by $70 million while contractual increases in compensation has gone up $169 million and $133 million in operational costs,” the public schools chief explained. “School-based cuts total $104 million and $266 million was cut from the central and citywide offices.” Those school-based cost savings translates to average high school classroom size increases from 31 to 33 and reducing charter school funding by 6 percent for a savings of $15 million. Other reductions will come from central and citywide cuts. Those cuts include a savings of $6 million from 21 furlough days and $2 million from supplemental security. Michael Shields, director of Security for CPS, said the security cuts do not constitute a reduction in its security budget either. “Supplemental security is off-duty Chicago police officers we use for some schools, so no CPS security guards will be cut or school shortchanged with security,” Shields told the Defender. Last year CPS started a safe passage program at several schools identified as having high incidents of violence. Originally it planned to spend $60 million over two years on the program but that has been slashed by $20 million to help balance the budget. Part of the district’s operating costs is salaries and teachers are scheduled to receive a 4 percent pay raise this year. Had teachers canceled their raise Huberman said high school class sizes would not have had to increase. Newly elected Chicago Teachers Union President Karen Lewis said teachers should not have to give up a long overdue raise to help balance the budget. But sacrifice is something Huberman said he is seeking from everyone. “I have proposed that principals and assistant principals take six furlough days this year,” Huberman said, who added that last year they were exempt from having to take furlough days. To avoid being in this position next fiscal year Huberman recommends that the Illinois Legislature pass a modest income tax increase to generate more revenue for public schools. Copyright 2010 Chicago Defender