July 6, 2014

Chicago Schools fix Deficit using 14-month Budget

July 6, 2014. Chicago. (ONN) Chicago City Hall announced that it had finalized its 2015 budget and somehow managed to come up with $876 million to cover a massive annual funding shortfall. Mayor Emanuel promised not to be like his predecessor by using one-time funding scams like selling five generations of parking meter tax revenue for a penny on the dollar. But the budget just released by CPS is little more than a gimmick itself.

Mayor Emanuel with CPS director Barbara Byrd-Bennett.

The Chicago Public School system and Chicago City Hall came up with a less-than-ingenious way to pay for the city’s massive education bills. They’re going to steal $650 million in property taxes from 2016. More than funding the school year and the union’s gold-plated pension plans, the creatively-rigged budget accomplishes something even more important. It delays the giant property tax increase for one more year, until after Mayor Emanuel’s and the City Council’s re-election in 2015.



Schools chief explains

As quoted by the Chicago Sun Times, CPS director Barbara Byrd-Bennett explained, “The change in the way in which we recognize revenue enables us to balance FY2015 budget, but it’s a one-time fix. Our financial challenges continue to loom over us. This one-time action is not going to address our structural deficit.” Chicago’s yearly education budget currently has an annual $876.3 million funding deficit. According to the report, $647 million of the $650 million taken from 2016 taxes will go toward teacher pensions.

The schools chief went on to say, “Despite financial challenges, we’ve got students to educate, and we remain committed to ensuring every child has access to a high-quality educational program.” Byrd-Bennett went on to tout how CPS has cut $740 million in wasteful spending from Chicago’s education budget since Mayor Emanuel took office in 2011, including cutting $55 million from the just-released 2015 budget. What taxpayers can’t understand is how three-quarters of a billion dollars was cut out, but the yearly budget keeps going up. The fact is, that quarter-million per year didn’t get refunded back to Chicagoans or put toward the city’s education needs. Nearly every penny is going straight into the pockets of the teachers.

Teachers union reacts

As usual, Chicago Teachers Union President Karen Lewis had little more than criticism for the Mayor, his CPS director and their gimmick-riddled education budget. “Every single thing that this guy does until February is going to be a re-election spin,” she told reporters after the budget was unveiled Thursday, “They’ve miraculously lengthened the year.”

Lewis went on to say, “I think there’s got to be a time where people actually sit down and do some real serious discussion about what priorities are. We have always said budgets are moral documents and they actually present your priorities. We’re still not clear what the district’s priorities are.” The new budget for next year includes 3% more spending than 2014 and dozens of additional arts and physical education teachers. It also includes $70 million, or $250 more per student, that goes directly into the teachers’ paychecks thanks to the deal signed between Lewis and Emanuel in 2012.

Budget by the numbers

The CPS 2015 budget overview was published online and will still need to be approved by the full Board of Education later this month. But it touts, ‘The FY15 budget keeps cuts from the classroom through $55 million in central office, administrative and operational reductions, totaling $740 million since 2011.’

The accompanying press release makes no mention of the fact that more and more spending is being diverted from education and students and instead into the pockets of teachers. The release quotes CPS chief Barbara Byrd-Bennett saying, “This proposed budget demonstrates that despite continued fiscal challenges, we put children, families and high-quality instruction first.” Teachers aren’t the only ones profiting. The bureaucrats in City Hall that oversee Chicago’s schools cost taxpayers $1.1 billion per year.



The CPS budget and press release admits that the 2015 school year is funded by using 14 months worth of property tax revenue. But it’s buried in the second-to-last paragraph, ‘In addition to savings achieved through Central Office cuts, CPS has been able to fill its FY15 budget gap by extending the District’s revenue recognition period to August 29 - 60 days after the end of the fiscal year - which will provide the District with several hundred million dollars of additional one-time resources.’

CPS and City Hall aren’t the only ones playing games with the numbers. Chicago’s local news outlets continue to report that a mere $50 million property tax increase will be needed to shore up the city’s various government employee pension funds. In reality, the property tax increase proposed by Mayor Emanuel in April is $750 million. It seems Chicago’s corporate news outlets are already on-board the Emanuel re-election bandwagon. There’ll be plenty of time to tell Chicago the truth after the 2015 election.

 

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