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Next Up in Ginormous Budget Shortfalls: Chicago Public Schools

By Marcus Gilmer in News on Mar 12, 2009 4:25PM

Maybe we shouldn't be surprised, given their willingness to spend like crazy on cappuccino machines, but it seems the Chicago Public Schools is the next entity that is facing one helluva budget shortfall for the 2009-2010 school year: $475 million, to be exact. And how does the CPS propose to close the budget hole? Why, with a property tax hike, of course. CPS used $100 million in reserve funds last year to avoid a tax hike and, coincidentally, last year was also the first time since Mayor Daley took over the schools (in 1995) that a property tax hike to benefit schools wasn't put on taxpayers.

Of the tax hike, newly minted Chicago Board of Education president Michael Scott said, "I can say with some degree of certainty that the revenue will have to come from some place, and I suspect that's where it will come from, at least some of it." The schools are slated to get about $190 million from the recently passed federal stimulus package, but only about $50 million would be available to apply towards the budget hole. New CPS CEO Ron Huberman said, "We are preserving core education and we're preserving classroom size. We're not laying off teachers." Huberman added that there would not be any cuts made to school safety, either. Scott added, though, "We're going to reduce our staffing in the president's office by better than 10 percent."

Per the Trib:

...Huberman said leaders will not consider increasing class sizes or cutting core educational programs or security for students. Instead leaders will look at reducing administrative staff at district headquarters and other cost-saving initiatives.

Huberman said the major cost driving the deficit is $145 million more for teachers' salaries. A five-year deal hammered out before his tenure in 2007 guarantees teachers a 4 percent raise each year.

He also said the district has to pay $130 million more toward pensions because of a payment schedule spelled out in state law. He said with the downturn in the financial markets the district lost money that could have been used to offset the increased payment this year.

Crain's Greg Hinz reports CPS officials claimed that unless some sort of action was taken, the shortfall would balloon to $913 million for 2010-2011 and $1.16 billion for 2011-2012. [Trib, WBBM, Crain's]