Monday, 22 December 2014 / TRUTH-OUT.ORG

Fuzzy Math: The Chicago Public Schools Budget Crisis

Sunday, 10 February 2013 10:47 By Curtis Black, Newstips | News Analysis

Parents and students wait outside Walt Disney Magnet School after the Chicago teacher's union ended a weeklong walkout in Chicago, Sept. 19, 2012. (Photo: Nathan Weber / The New York Times) Parents and students wait outside Walt Disney Magnet School after the Chicago teacher's union ended a weeklong walkout in Chicago, Sept. 19, 2012. (Photo: Nathan Weber / The New York Times) As citywide opposition to Mayor Emanuel’s massive school closing program comes into sharper focus every day, the rationale for the plan gets fuzzier and fuzzier.

Take the question of money.

When CPS chief Barbara Byrd Bennett accepted her utilization commission’s call for taking high school closings off the table, the potential savings from school closings was significantly reduced, says Dwayne Truss, organizer of the Save Our Neighborhood Schools coalition on the West Side.

That’s because high schools are a lot bigger and costlier to operate than elementary schools.  Closing elementary schools saves you less.

Publicly, CPS has projected annual savings of $500,000 to $800,000 for each school closed.  Privately, their estimates are lower – as low as $140,000 per school.  And they estimate that upfront closing costs, including severance pay, security, and moving costs, could be as high as $4.5 million per school, potentially wiping out any savings for many years.

With only elementary school closings, we’d be smart to expect the savings to come in on the lower end — if at all.

Truss points to an additional cost that he insists must be taken into account – the loss of hundreds, maybe thousands of good jobs for African American teachers, principals, lunchroom workers and engineers.

Under a city administration hellbent on eliminating public service jobs that form the backbone of the black middle class – where black unemployment rates are more than double the rate for whites — and in a district facing civil rights compliants for targeting black teachers, he sees layoffs resulting from school closings as another drag on the economic vitality of the neighborhoods.

The sky is falling!

Then there’s the billion-dollar deficit, which we’re told time and again means we have to close schools.

Last week CTU blew the whistle on CPS’s budget manipulations, showing that instead of a deficit requiring the district to drain its reserve fund and deny teachers compensation for the longer day, the final audited budget showed a surplus of $344 million.

“Perhaps it’s time to have an honest budget discussion, before any schools are closed,” union president Karen Lewis said.

CPS responded that the additional $344 million came from early payments from the county and state, the Sun Times reported.

There’s more to it than that, according to union budget analyst Kurt Hilgendorf, a high school teacher on leave.  In addition to underestimating revenue in its official budget, CPS also ended up spending $221 million less than it had budgeted.

Did that reduced spending result from “efficiencies”?  The two biggest items where actual spending was below budget were teachers salaries and, after that, textbook purchases.

Perhaps cutting teaching positions to save $70 million is an “efficiency.”  Perhaps budgeting $86 million for textbooks and then spending only $49 million is an “efficiency.” Hilgendorf suggests it might better be understood as “lying with math.”

The boy who cried wolf

The practice of “overestimating expenses by a huge amount, and underestimating revenues by a huge amount” is a longstanding pattern, he said.

The previous year, CPS projected a $245 million deficit and ended up with a $316 surplus.   That’s a half-billion-dollar difference.

In the four years between FY 2005 and FY 2008, CPS’s total deficit projections totaled more than $1 billion.  The reality in those four years was a total surplus of $920 million.

To get the full effect of this “Chicken Little” approach to budgeting, Hilgendorf has compiled the numbers that CPS officials issued in press statements in the months before the annual budgets were presented and approved.

In 2005, CPS was discussing a $200 million deficit; the approved budget had a $29 million deficit, and at the end of the year there was an $83 million surplus.

In 2006 and 2007, press statements foretold deficits of $175 million and $328 million; approved budgets had deficits of $45 million and $105 million; at the end of the year, there were surpluses of $104 million and $138 million.

In 2009 and 2010, actual deficits were slightly smaller than the approved budget.  Earlier statements to the media, however, predicted deficits that were two to four times the actual shortfalls.

In the early discussions of last year’s budget, CPS claimed they faced a $700 million deficit.  That turned into a $316 million surplus.

Now they’re headed for a $1 billion deficit.  Or so they say.

At the huge CPS hearing on the West Side last week, Valerie Leonard of the Lawndale Alliance pointed out that the district took a hit to its bond rating when it drained its reserves to fill its supposed budget gap last year.

But release of the audited numbers– which normally happens in December – was postponed, and for some reason the surplus wasn’t even reported in the course of last December’s bond issue, she said.

Lost and found

“This crisis was manufactured, and decisions are being made based on incorrect and incomplete financial, enrollment, and utilization data,” Leonard said, pointing to the newly disclosed budget surplus – and the revelation that CPS enrollment actually increased by 1,000 students this year.

She pointed out that CPS spends over $400 million on outside lawyers and other professional services, and that while the state cut its education spending by $200 million, CPS stood silent as UNO sought a $35 million earmark for new schools.

Leonard called – as many sensible people have – for a moratorium on school closings until CPS completes a facilities master plan.

Jitu Brown of the Kenwood Oakland Community Organization puts it succinctly: “CPS doesn’t have a budget crisis, it has a priorities crisis.”

He singles out $350 million budgeted last year for the Office of New Schools, dedicated to developing new charter and contract schools.

This year there’s $71 million in the budget specifically dedicated to developing new charter schools.

As long as CPS is spending $71 million to open new charters, it’s going to have a hard time arguing that it has no choice but to close 100 neighborhood schools, in order to save $50 million, or $25 million, or whatever.

Indeed, as long as CPS is committed to opening charters, it’s going to have a hard time arguing that utilization issues are what’s driving school closings.

Which may not matter.  The real bottom line may be that this is Mayor Emanuel’s agenda, the facts don’t matter, and we have very little say in the decision.

That’s not keeping people away from the hearings, by any means.  But it does seem to be making a lot of people angry.

This piece was reprinted by Truthout with permission or license. It may not be reproduced in any form without permission or license from the source.

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Fuzzy Math: The Chicago Public Schools Budget Crisis

Sunday, 10 February 2013 10:47 By Curtis Black, Newstips | News Analysis

Parents and students wait outside Walt Disney Magnet School after the Chicago teacher's union ended a weeklong walkout in Chicago, Sept. 19, 2012. (Photo: Nathan Weber / The New York Times) Parents and students wait outside Walt Disney Magnet School after the Chicago teacher's union ended a weeklong walkout in Chicago, Sept. 19, 2012. (Photo: Nathan Weber / The New York Times) As citywide opposition to Mayor Emanuel’s massive school closing program comes into sharper focus every day, the rationale for the plan gets fuzzier and fuzzier.

Take the question of money.

When CPS chief Barbara Byrd Bennett accepted her utilization commission’s call for taking high school closings off the table, the potential savings from school closings was significantly reduced, says Dwayne Truss, organizer of the Save Our Neighborhood Schools coalition on the West Side.

That’s because high schools are a lot bigger and costlier to operate than elementary schools.  Closing elementary schools saves you less.

Publicly, CPS has projected annual savings of $500,000 to $800,000 for each school closed.  Privately, their estimates are lower – as low as $140,000 per school.  And they estimate that upfront closing costs, including severance pay, security, and moving costs, could be as high as $4.5 million per school, potentially wiping out any savings for many years.

With only elementary school closings, we’d be smart to expect the savings to come in on the lower end — if at all.

Truss points to an additional cost that he insists must be taken into account – the loss of hundreds, maybe thousands of good jobs for African American teachers, principals, lunchroom workers and engineers.

Under a city administration hellbent on eliminating public service jobs that form the backbone of the black middle class – where black unemployment rates are more than double the rate for whites — and in a district facing civil rights compliants for targeting black teachers, he sees layoffs resulting from school closings as another drag on the economic vitality of the neighborhoods.

The sky is falling!

Then there’s the billion-dollar deficit, which we’re told time and again means we have to close schools.

Last week CTU blew the whistle on CPS’s budget manipulations, showing that instead of a deficit requiring the district to drain its reserve fund and deny teachers compensation for the longer day, the final audited budget showed a surplus of $344 million.

“Perhaps it’s time to have an honest budget discussion, before any schools are closed,” union president Karen Lewis said.

CPS responded that the additional $344 million came from early payments from the county and state, the Sun Times reported.

There’s more to it than that, according to union budget analyst Kurt Hilgendorf, a high school teacher on leave.  In addition to underestimating revenue in its official budget, CPS also ended up spending $221 million less than it had budgeted.

Did that reduced spending result from “efficiencies”?  The two biggest items where actual spending was below budget were teachers salaries and, after that, textbook purchases.

Perhaps cutting teaching positions to save $70 million is an “efficiency.”  Perhaps budgeting $86 million for textbooks and then spending only $49 million is an “efficiency.” Hilgendorf suggests it might better be understood as “lying with math.”

The boy who cried wolf

The practice of “overestimating expenses by a huge amount, and underestimating revenues by a huge amount” is a longstanding pattern, he said.

The previous year, CPS projected a $245 million deficit and ended up with a $316 surplus.   That’s a half-billion-dollar difference.

In the four years between FY 2005 and FY 2008, CPS’s total deficit projections totaled more than $1 billion.  The reality in those four years was a total surplus of $920 million.

To get the full effect of this “Chicken Little” approach to budgeting, Hilgendorf has compiled the numbers that CPS officials issued in press statements in the months before the annual budgets were presented and approved.

In 2005, CPS was discussing a $200 million deficit; the approved budget had a $29 million deficit, and at the end of the year there was an $83 million surplus.

In 2006 and 2007, press statements foretold deficits of $175 million and $328 million; approved budgets had deficits of $45 million and $105 million; at the end of the year, there were surpluses of $104 million and $138 million.

In 2009 and 2010, actual deficits were slightly smaller than the approved budget.  Earlier statements to the media, however, predicted deficits that were two to four times the actual shortfalls.

In the early discussions of last year’s budget, CPS claimed they faced a $700 million deficit.  That turned into a $316 million surplus.

Now they’re headed for a $1 billion deficit.  Or so they say.

At the huge CPS hearing on the West Side last week, Valerie Leonard of the Lawndale Alliance pointed out that the district took a hit to its bond rating when it drained its reserves to fill its supposed budget gap last year.

But release of the audited numbers– which normally happens in December – was postponed, and for some reason the surplus wasn’t even reported in the course of last December’s bond issue, she said.

Lost and found

“This crisis was manufactured, and decisions are being made based on incorrect and incomplete financial, enrollment, and utilization data,” Leonard said, pointing to the newly disclosed budget surplus – and the revelation that CPS enrollment actually increased by 1,000 students this year.

She pointed out that CPS spends over $400 million on outside lawyers and other professional services, and that while the state cut its education spending by $200 million, CPS stood silent as UNO sought a $35 million earmark for new schools.

Leonard called – as many sensible people have – for a moratorium on school closings until CPS completes a facilities master plan.

Jitu Brown of the Kenwood Oakland Community Organization puts it succinctly: “CPS doesn’t have a budget crisis, it has a priorities crisis.”

He singles out $350 million budgeted last year for the Office of New Schools, dedicated to developing new charter and contract schools.

This year there’s $71 million in the budget specifically dedicated to developing new charter schools.

As long as CPS is spending $71 million to open new charters, it’s going to have a hard time arguing that it has no choice but to close 100 neighborhood schools, in order to save $50 million, or $25 million, or whatever.

Indeed, as long as CPS is committed to opening charters, it’s going to have a hard time arguing that utilization issues are what’s driving school closings.

Which may not matter.  The real bottom line may be that this is Mayor Emanuel’s agenda, the facts don’t matter, and we have very little say in the decision.

That’s not keeping people away from the hearings, by any means.  But it does seem to be making a lot of people angry.

This piece was reprinted by Truthout with permission or license. It may not be reproduced in any form without permission or license from the source.

Hide Comments

blog comments powered by Disqus