Chicago School Board expected to pass new budget

While officials acknowledged the potential pitfalls of using a one-time accounting maneuver to cover a gaping deficit, Chicago’s Board of Education Wednesday unanimously approved a $5.8 billion operating budget and another $1 billion in spending on capital projects and debt payments.

The budget for the 2014-15 fiscal year has been roundly criticized for making cuts to neighborhood schools and increased spending for privately run charters, as well as for the tactic of adding two months to the fiscal year to to help cover an $862 million shortfall.

Calling the budget a “stop-gap budget,” board member Henry Bienen said the accounting maneuver could hurt the district’s bond rating and lead to higher interest rates for future CPS-issued bonds.

“It’s a budget which could very possibly lead to a downgrading of bonds in the future, which would mean higher cost of financing on the interest rate,” Bienen said. “That’s very worrisome.”

Under questioning from board member Andrea Zopp, Chief Financial Officer Ginger Ostro acknowledged the decision to add two months of revenue to balance the budget could lead to cash flow problems later in the fiscal year.

Board members seemed miffed over criticism about increased spending from two watchdog groups, the Civic Federation and Access Living. The budget is 3 percent higher than last year’s, despite the ballooning deficit.

The Civic Federation said Wednesday it could not support the spending plan, which it called “shortsighted” for not addressing the fiscal crisis with long-term solutions and increasing spending by $400 million.

Access Living, a disability rights group, said that while the district increased funds for special education programs, it failed to develop a plan to address the structural deficit

The district blames its ballooning deficit on rising pension costs and inadequate state funding. Board president David Vitale said absent state pension reform the district has little choice but to employ a one-time fix.

“We do recognize the challenges and the structural deficit that the district faces. It is not an easy decision to look past at least for one more year the true fiscal challenges that this district faces,” Vitale said. “The alternatives would be significant if we were to try to balance this on the back of teachers and kids this year.”

The budget cuts funding to traditional schools by $72 million while increasing spending by the same amount for privately run charter and contract schools. CPS officials said neighborhood schools lost money because of enrollment declines while charters saw added funds largely because of more seats.

“All schools should have investments but money should definitely follow the child,” Illinois Network of Charter Schools President Andrew Broy said at Wednesday’s meeting in defending the plan. “I’ve never quite understood the counter argument, perhaps it might be that district schools or any schools that lose its students should retain funding for students they no longer educate.”

But teachers and parents told board members how a per-pupil funding formula put into effect last year has hurt district-run schools.. At Murphy Elementary in Irving Park, a $600,000 budget cut last year led to 2 1/2 full-time positions eliminated. They were not restored this year, said Local School Council chair Roberta Salas. “I reject the new norm,” she said.

At Roosevelt High School in Albany Park, two years of budget cuts totaled $1.8 million , even though the school’s enrollment dropped by only 99 students over that time, said teacher Timothy Meegan.

The district, which provided an additional $78 million to schools that took in students from the closing of nearly 50 schools last year, also reduced budget allocations to the “welcoming schools” by 5 percent, or about $13 million in the coming year.

The budget increases the district’s share of the property tax to the maximum amount allowed with residents expected to pay an average $34 more next year on a $250,000 home.

In another matter, parents and education advocates called on the board to turn down a plan by charter operator Concept Schools to open two schools in the fall. Concept, which is based in Des Plaines and operates schools across the Midwest, is under a federal investigation involving a grants program. Concept has a new location in Chatham for one of its new schools. The board will vote on the matter in August.

Concept officials acknowledged the investigation but that “it will not affect the academic or extracurricular operations of our schools. We have been asked to provide information and are cooperating with the government in this matter.”

nahmed@tribune.com