Budgets given to principals, Chicago Public Schools tap ‘reserves’

By: Sarah Karp / June 05, 2013

Last summer in the midst of teacher contract negotiations and as they prepared to undertake massive school closings, CPS leaders said they were using one-time reserves to fill a budget deficit and were completely out of money.

But on Wednesday, district officials said they will once again use one-time reserves to fill a budget deficit projected to be close to $1 billion. District officials made this announcement as they were releasing school budgets to principals.

CPS is facing a substantial budget deficit because it must contribute $612 million to pension funds, a $400 million increase from last year. Officials were hoping to spread those payments over a longer period of time, but last week state legislators didn’t approve a bill that would have given the district a pension holiday.

CPS spokeswoman Becky Carroll said that the new reserves will be created by the county making property tax payments on time again this year. Carroll said the district also might garner some savings from the state keeping current with payments.

However, identifying the county payments as extra money is a direct contradiction to earlier statements. The annual audit, released in January, showed a fund balance of $329 million—a fact critics immediately jumped on accusing CPS of being dishonest by crying poverty and then ending up with money in the bank.

At the time, CPS officials said last year’s one-time county property tax payment was not extra money, but had just been received earlier than expected and was already allocated. Carroll said the reason this year’s on time payments are considered reserves has to do with timing.

“We now expect to get the next round of county dollars by the end of FY13 – since we did not plan for those dollars in our FY13 budget as passed by the Board, they will be counted as reserves. Next year, they will actually be counted in that budget,” she said.

These new reserves are unlikely to make up the entire shortfall faced by the district. This predicament had principals nervous about their school budgets as they waited an unusually long time to receive them. School budgets are usually released in April or May so that principals can get a handle on how many teachers they can hire or how many they must lay off.

In announcing that principals were finally getting their budgets, CPS officials said they were doing their best to prevent students from feeling the impact of budget problems.

“The District is continuing to identify reductions in central office, operations and administrative spending in order to keep cuts as far away from the classroom as possible,” according to a press release.

But getting a handle on whether schools will feel the impact of the district’s deficit in their budgets is difficult. For the first time this year, CPS moved to per-student funding, rather than giving schools money for positions, which was done historically.

CPS officials say they are doing this to give principals more autonomy over their budgets. However, some worry that it is a way to cut school budgets without having to explicitly reduce the number of teachers and raise class sizes. Also, it could incentivize laying off veteran, more expensive teachers and replacing them with less expensive ones.

Principals were summoned to late afternoon meetings Wednesday to receive their budgets so they have yet to report whether they will be getting more or less this year than last year. Carroll said she does not yet have any overall information on how many schools saw increase and decreases in their overall budget.

Carroll said schools are getting $4,429 for every kindergarten through third grader and $4,140 for every four every fourth through eighth grader. High schools are getting $5,029 for each student. Schools will still get the additional money for low-income, special education and bilingual students based on the complicated formula that has always been used.

Up until last year, CPS ran a per pupil budgeting pilot program. At the time, the per-pupil rate was based on the student population of the school. Schools with less than 300 students got $6,969 per pupil, whereas those with between 451 and 900 students got $5,077. The per student rates this year are similar to the old rates for larger schools.


Districts Report Bad News on Finances

(From Christina A. Samuels’ District Dossier blog, published at edweek.org. Click here for the main page of her blog.)

By Christina Samuels on June 29, 2011 7:41 AM 

School districts are facing a grim financial future, and the situation won’t get better any time soon, according to a survey of more than 400 districts conducted by the Washington-based Center on Education Policy.

The American Recovery and Reinvestment Act pushed off the inevitable for many districts, but those funds are disappearing, while state and local revenue continues to plunge. About 84 percent of the districts surveyed anticipate funding cuts in school year 2011-12, and the cuts are being seen in all types of districts: urban, rural and suburban.

“School people are just running out of ways to limit spending,” said Jack Jennings, the organization’s president and chief executive officer, in an interview. “They’re just at their wits’ end.”

Released today, the nationally representative survey of school districts was conducted between February and May of 2011. Surveys were sent to 955 districts and 457 districts responded. Because the sample was random and survey results were weighted, the findings can be generalized to school districts across the country.

Mr. Jennings said the center was anticipating about 400 responses, so was surprised that more than 50 more district leaders responded to the survey. “School districts want the public to understand what’s going on,” he said.

About 70 percent of districts received less money in 2010-11 than they had the year before. For the 2011-12 school year, 84 percent of districts anticipate funding cuts, the survey found. And federal stimulus funds are no longer a cushion for districts. States and districts are required to spend their stimulus money by Sept. 30, 2011.

Looking back to the last school year, about 85 percent of districts with funding decreases in 2010-11 made some type of staff cuts. Those districts represented about 53 percent of all districts in the country.

Districts tried to tilt staff reductions toward teachers of noncore academic subjects: 68 percent of the districts making cuts did so in those areas, while 54 percent made staff reductions in core areas. Districts also furloughed teachers and reduced benefits to save money.

Looking to the upcoming school year, about 57 percent of the districts anticipating funding reductions plan to specifically cut teaching jobs; 50 percent plan to cut administrative staff.

The closest parallel to today’s weak economy is the recession of the early 1980s, which was marked by high inflation and President Reagan’s cut in federal education spending. But this recession is deeper and broader, Jennings said. Plus, “far more is being asked of the schools, and they’re getting less money.” Districts should start working on sharing cost-cutting ideas with each other, because the downward trend is expected to continue for the near future, he said.

The survey did note that school officials tended to appreciate the federal stimulus, Eighty-nine percent said their district was better off for having received the money, even though the funds may have just delayed inevitable staff reductions for two years.

“But two years ago, people were concerned about going into a depression,” Jennings said. “The stimulus helped. Unfortunately, the federal government isn’t coming to the aid of school districts anymore.”

Forget “Mayoral Control”, WA governor has begun her own efforts for a takeover of public education

It is hard to miss headlines documenting enormously powerful mayoral offices “iron-fisting” the public education system in our nation’s largest cities.  Bloomberg in New York, Daley in Chicago, and Villaraigosa in Los Angeles are only a few that immediately come to mind.  These men have rewritten city constitutions, previously requiring school board members and city superintendents to run for open election, in order to hand pick the friends and business executives they see most fit for the job to manage public schools (See Ryan’s posts from November illustrating this point in the Cathleen Black case).

However, this trend hardly seems to stop at the doors of city hall.  2010 saw several state capitol CEOs (a.k.a. “democratically” elected governors) advocating for changes to state constitutions that would essentially eliminate the need for public elections of state superintendents.  Currently, only 14 states have direct elections  for state superintendent positions.

Washington state governor, Christine Gregoire is one such official pushing for the development of a new Department of Education with a secretary she would appoint reporting directly to her.  Current State Superintendent Randy Dorn and Gov. Gregoire have been known to disagree on issues of K-12 education when it comes to testing methods, teacher evaluation, and funding, and this change would mean that the previously independent position of state superintendent would fall under the purview of the governor.

The Seattle Times began covering the topic this morning.  Below is the excerpt from their website.

OLYMPIA — Gov. Chris Gregoire is proposing a new state Department of Education that would take over duties handled by the voter-elected state school superintendent and other agencies.

Gregoire announced the plan Wednesday, part of her efforts to streamline government during the economic downturn. The Democratic governor said consolidating Washington’s education efforts — “from preschool to the Ph.D.” — would save time, money, and improve outcomes for students.

“Today in our state, we do not have an education system,” Gregoire said. “We have a collection of agencies that deal with the subject of education.”

Under her plan, a new Department of Education would absorb responsibilities currently held by a wide array of officials, including State Superintendent of Public Instruction Randy Dorn, who oversees public K-12 education in the state, but has little power beyond the bully pulpit.

(Read more)