What do the Chicago Teachers Union, Occupy Chicago, the Chicago Tribune editorial page, the Chicago Civic Federation, and Moody’s credit rating agency all have in common? They have each slammed the Chicago Public Schools for proposing a budget that drains the system’s entire $349 million rainy day fund.
The widespread disapproval raises the question of whether the Board of Education, which is appointed by Mayor Rahm Emanuel and typically rubber stamps any CPS proposal, might suggest changes to the new budget at its July 26 meeting.
“There is no support for this,” says Rod Estevan of Access Living, who specializes in CPS budget issues. “I would not be surprised if they came forward with another budget.”
Complicating any budget is that CPS is negotiating a new collective bargaining deal with CTU. A fact finder is supposed to present his recommendations Monday to both sides on central bargaining issues including raises, health benefits and performance evaluation procedures.
The $5.16 billion budget CPS proposed for the 2012-13 school year includes a two percent teacher raise, as well as two percent pay hikes for administration positions. However, CTU wants a 29 percent raise over the next two years, partly as compensation for a seven-hour school day CPS plans to implement next year.
“The budget could change enormously,” Estevan says. “An arbitrator could easily say, ‘fair is fair boys’ if you are changing work rules, you need a bigger raise.”
CPS spokeswoman Robyn Ziegler says that such budget changes are “not known at this time as we are still negotiating with CTU.”
Following a fiscal crisis before the 1979-80 school year, the state government created the Illinois School Finance Authority that set up a reserve fund for CPS. If the budget stays as is, it would mark the first time in the ensuing three decades that CPS enters a school year with no reserve funds.
“CPS has proposed to draw down its reserves in the past, but last minute, one-time federal and state revenues prevented it from having to do so,” Ziegler says.
Any help from the cash-strapped federal or state governments this time appears unlikely.
Meanwhile, Moody’s Investor Services downgraded CPS’s bond rating following the budget proposal – so it will cost more for the district to borrow money.
Fiscal moderates and conservatives like the Chicago Civic Federation and Tribune editorial page note the CPS budget does not take into account future pension payments for teachers. These payments are scheduled to increase in the 2013-14 school year.
Those sympathetic with CTU view the budget as a cynical attempt for CPS to cry poverty. "A lot of people are very skeptical as to the legitimacy of ending the reserve fund,” says Matthew McLoughlin of Occupy Chicago, who is part of the newly-formed Chicago Teacher Solidarity Campaign. “It just seems like they are setting the schools up for disaster.”