Wednesday, July 11, 2012

CPS FY 2013 budget quick look


Understanding the budget:
So you’ve just had the 212 page Chicago Public Schools budget dumped on you and you want to do your civic duty in understanding and commenting on it in the 3 hours before the horribly scheduled public hearings! You can find the budget here:
http://www.cps.edu/About_CPS/Financial_information/Pages/Financialinformation.aspx

Why is this important?
Due to poor management of taxpayer dollars, CPS manufactures its own budget crisis every year. This results in worse educational supports for the vast majority of students while privatizing options continue to be increasingly supported. There is no scientific justification for these priorities; rather it is a strategy for manufactured crisis to force policy rather than the best interests of students driving policy and resource allocation. My hope is that this work will motivate the development of a people’s budget movement in Chicago Public Schools to oppose the current corporate structure.
9 quick things about the current budget and then some explanations:
1.       The district is taking in $5.3 billion in revenue from local (47.6% of the total), state (34.7%), and national (17.6%) support. There is an additional .8 % coming from interest income.
2.       Only $4.7 billion (88.8%) of the $5.3 billion even makes it to the General Operating Fund while 9.3% goes to debt service, much of it going to clouted banks (assigned by a School Board appointed with bankers and business people). An additional 1.9% goes to the capital fund for building and maintaining school facilities.
3.       Both the percentage of the budget devoted to teacher salaries and combined teacher salaries + pensions have declined significantly since FY2004 (Salaries 48.43%-->37.65%, combined 56.3%-->44.30%). This year’s projected decline is the highest on record. The growth has been in charter school tuition (which accounts for a portion, but not the balance of the decline in teacher salaries), and “other fixed charges” (p. 126-127). In accounts, Contracts, Equipment, Transportation, and Contingencies are rising this year (p15)
4.       The pension payments have stayed steady or declined while obligations have ballooned. This is natural with any debt that is not responsibility repaid. The vast majority of the pension “crisis” is caused by CPS and to a lesser degree, the state, diverting pension funding toward failed programs like High School Transformation. Accounting for the simple refusal to pay, they do not make up a major portion of the financial crisis on their own.
5.       Despite the discussion of $120 million in additional funds for school level budgeting, the actual outlay to schools has declined this year (-0.3%). Instead, the Chief Education Officer (15.3%), Chief Administrative Officer (22.8%), Portfolio (1368.0%) , Talent (35.5%), Law (10.1%) and Network (31.6%) offices have grown (p13 of the budget)
6.       Some of the above is explained by the shifting of responsibilities, but that still represents a shifting of funds away from school and LSC based oversight to central office oversight.
7.       The Talent Office is still completely unable to develop a navigatable staffing framework and that results in less competitive hiring by CPS and improper/inadequate staffing that severely damages students. So they received more money to oversee.
8.       The grouping of family and community engagement, LSC relations and governmental affairs suggests a priority on attempting to lobby and attain buy-in from communities rather than truly collaborative efforts that are respectful to parent voice.
9.       The deficit is at least in some part real, but should be viewed in the context of a CPS finance department that has been hundreds of millions of dollars off in their deficit projections every single year.

What is the budget?
The budget is a document that CPS is mandated to release each fiscal year to lay out the expected revenue and planned expenditures for public consumption. It is then voted on by the CPS Board of Education. Since the Board of Education is non-elected, neither the board nor central office is required to actually listen to any of public input. Nevertheless, CPS is legally required release a draft budget in June, hold public hearings and then the board must pass a final version at the following board meeting.  
If they aren’t integrated into the process, why have the hearings at all? Why testify at hearings where people running the system aren’t listening?
CPS is required by law to have the hearings. They also use the opportunity to “sell” their budget to the public. I have presented several years at the hearings. The point is not to move CPS, it’s to build community knowledge and confidence that we can build our own budget. Two years ago, I received my termination notice from my teaching position at Julian High School due to my work supporting student organizing. Even though it was very difficult, I testified through my tears to ensure the story was told.
How is the budget prepared and organized?
The process for preparing the budget, despite public outcry, remains almost completely opaque. In examining what is produced in the draft, it appears that the previous years’ budgets are used as a template with all of their underlying assumptions. Then new budget priorities are integrated and a narrative that decries a huge deficit, praises central office for cutting expenditures, and blames teachers for wanting their promised retirement contract honored is produced regardless of the current status of the budget. This results in a budget with the following portions:
·         Letter from the CEO
·         General overview that puts the current FY budget in comparison with the previous years
·         Rvenue explanation (the money the system is taking in)
·         School based budget breakdown (The money at the school level)
·         Departmental breakdown
·         Pension blaming section
·         Capital budget
·         Debt Management
·         Organizational overview/chart
·         Explanation of the various funds
·         Miscellaneous Appendices


6 comments:

  1. Best resource on understanding subject of Budget in the real world scenario.

    Thanks a lot!
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    ReplyDelete