Some old habits die hard.
When Chicago Public Schools unveiled its $5.8 billion proposed budget for 2015 on Wednesday, the cash-strapped district revealed more of the same: It would plug a huge hole in the deficit (in this case, $876 million) with a one-time revenue fix, repeating a book-balancing strategy adopted in the past few years amid rising pension costs.
In a maneuver of accounting, CPS this year will shift an extra $650 million in property tax revenue from fiscal 2016 through expanding its "revenue recognition period" another two months. It's risky business since those millions won't be accessible as a lifeline for next year's budget.
"We must make these investments under serious financial constraints," said CPS boss Barbara Byrd-Bennett, defending the move. "A change in the way in which we recognize revenue enables the Fiscal Year 15 budget, but it's a one-time fix, and our financial challenges continue to loom over us. This one-time action is not going to address our structural deficit. We've got to receive pension reform from Springfield."
Previously the district had relied upon federal stimulus money, cash reserves and bonds to patch up its deficit problem.
The preliminary spending plan -- up for a vote by the Board of Education on July 23 -- is three percent higher than that of 2014, with a majority expense going to teacher salaries and benefits. It includes a record $634 million allotted for pension contributions. Meanwhile, $55 million in budget cuts to administration-related items will help pay for an extra $70 million in per-pupil funding as well as the hiring of 168 arts and physical education teachers, among other expenditures.
Last month, CPS laid off 1,100 staffers including 550 teachers.
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The reaction among Chicago's media critics was a collective sigh.
Says Crain's Chicago Business' Greg Hinz: "In (transferring $650 million in one-time revenues), CPS is running a risk. If the county were to return to its old ways some year, CPS would have a big, big budget hole. And by now permanently borrowing each year from the future year, the district effectively is using up a cash flow reserve to pay current accounts."
A Chicago Sun-Times editorial laments the lack of funding for neighborhood schools' severely overcrowded classrooms and key resources like computers and social workers.
"This was supposed to be the year for CPS pension reform, but city efforts to reform its other employee pensions took precedence and negotiations with the Chicago Teachers Union didn’t bear fruit," said the paper, adding: "Pension reform will not solve all of CPS’ woes, and it’s a bitter pill for teachers to swallow. But it’s an essential reform for the long-term financial health of the school system and the pension fund itself."
The 2015 budget rules out another controversial round of school closures -- the kind that wreaked havoc upon Mayor Rahm Emanuel's reputation here in the Windy City when he shuttered close to 50 schools last year. With Emanuel's mayoral future at stake -- he's up for re-election next February -- the city can't afford to go that route, either.
