The news keeps getting worse both for Chicago Public School students and city residents. According to Lauren Fitzpatrick and Mitch Dudek of the Chicago Sun-Times, the latest solution announced by administrators for the district's persistent financial woes is to raise property tax rates to their maximum level and continue with big cuts to spending in the classroom.
The plan for the 2013-14 academic year includes $68 million in spending cuts, although this will make but a small dent in the $1 billion operating budget gap. CPS Chief Operating Officer Tim Cawley says that rest of the money will come from central office cuts to the tune of $100 million along with a $700 million withdrawal from the district's one-time reserve funds.
"Even with all that," Cawley said, "we still had to make cuts to schools, which is always painful for us."
Under its new budgeting system, CPS has changed the way it allots money to schools, now basing it on a set amount per student. Because of that, CPS says net cuts across the district were lower than last year.
But whether that's good news depends on your school.
Some schools, including many receiving kids from closed schools, gained money since their enrollments went up, but many lost money as enrollments went down. High schools, which have the largest budgets to begin with, took most of the biggest hits.
The Cook County Clerk's Office estimates that for homeowners with properties worth about $200,000, taxes will go up by $32 a year. The hike will result in $42 million in additional revenues for the district.
The district already saw revenue increases of more than $92 million over last year, but the gains were eaten up by a drastic increase in pension costs over the same period.
The total district budget for 2014 will be $5.6 billion — nearly half-a-billion dollar increase over last year.
Not all programs funded by the district will see cuts. There will be additional money for efforts targeting students who drop out of school before graduation and for pre-schools.
This school year is already starting with 48 schools shuttered and nearly 3,000 staffers — 1,456 of them teachers — laid off. The 2015 school year might not be any better. It could see an additional $914 million deficit if the pension problem is not resolved.
Adding to the dim picture Wednesday, Moody's Investors Service, a key Wall Street agency, lowered the Board of Education's credit rating, pointing to the school district's pension obligations and $6.3 billion in debt. The downgrade from A2 to A3 is also partially due to the city of Chicago's parallel financial problems and comes a week after Moody's issued a "triple-downgrade" of the city's bond rating from Aa3 to A3, the first drop in the city's rating since Mayor Rahm Emanuel took office.