PI Original Ellyn Fortino Wednesday August 24th, 2016, 3:00pm

Chicago Board Of Ed Approves $5.4 Billion Budget As Calls Grow For TIF Surplus Ordinance

Progress Illinois provides highlights from Wednesday's Chicago Board of Education meeting, during which the school district's $5.4 billion budget was approved and TIF surplus supporters spoke out.

The Chicago Board of Education approved the district's $5.4 billion operating budget Wednesday and heard from many supporters of a proposed TIF, or tax increment financing, surplus ordinance. 

Chicago homeowners will take a hit under the district's fiscal year 2017 budget, which depends on $250 million in new property taxes plus $215 million in state aid to cover teacher pensions. The property tax increase works out to be a $245 hike for the average homeowner.

"We're very grateful to our Chicago taxpayers for shouldering this additional load and for our leaders in Springfield for acknowledging that we must improve education funding for children living in poverty," Chicago Public Schools CEO Forrest Claypool said at the top of the board meeting.

CPS, which has junk credit ratings, also secured approval for a $1.5 billion short-term loan to pay bills and $945 million in long-term borrowing for capital improvements.

Claypool said the 2017 budget represents a "huge step towards securing long-term financial stability" for the district.

"A year ago," Claypool said, "we were looking at a much worse situation and [a] desperate fiscal crisis. Today, however, we're presenting a balanced operating budget that reduces spending by $232 million from last year while continuing to make the investments our students need."

The budget includes $338 million in capital improvements, including $173 million for "overcrowding relief." The fiscal plan also relies partly on "anticipated" labor savings similar to those contained in the district's four-year contract offer presented to the Chicago Teachers Union in January. The union's Big Bargaining Team has already rejected the deal.

"Our hope now is to reach a final agreement with the CTU so that once school begins, our children can remain in the classroom where they belong," Claypool said.

CTU members attended the board meeting and protested beforehand with their allies. Outside in the pouring rain, teachers and their supporters picketed with signs that read: "We Will Strike to Stop CPS Cuts!" and "Teachers And Students Have Already Sacrificed Too Much."

Individual schools will see collective budget cuts in the amount of $140 million for the upcoming academic year. Nearly 1,000 CPS teachers and staffers have also been laid off, though they can apply for open positions within the district.

"Our students have sacrificed. Our teachers have sacrificed. What is the mayor gonna do?" CTU Financial Secretary Maria Moreno asked the board.

CTU and allied groups urged school board members to support a recently introduced Chicago TIF surplus ordinance that proponents say would provide CPS with approximately $150 million in new revenue.

"We don't need to have more cuts," Moreno said. "That's it. We've had it."

A majority of council members support the TIF surplus ordinance, which was introduced last month by Alds. Susan Sadlowski Garza (10th), a former CPS counselor, and George Cardenas (12th).

A visibly emotional Garza addressed the board, saying the schools in her ward have lost $21 million this year despite the district's claim "there would not be any cuts to classrooms."

"CPS has created a culture of distrust, and parents and teachers and students don't believe a word that comes out of your mouth anymore," she said.

Chicago Board of Education President Frank Clark responded, "I agree there's a credibility gap that we're attempting to close."

The city's total TIF balance was $1.38 billion last year, but only $140 million of that amount was unencumbered, according to CPS. Of the $140 million in non-committed TIF funds, $113 million was surplused and CPS got $60 million, said CPS Senior Vice President of Finance Ronald DeNard. In 2017, the school district expects to receive $32 million in TIF funds for the budget and $54 million for capital projects, he added.

Clark sought clarification on why supporters of the TIF surplus ordinance claim there is at least $150 million in TIF funds that could be released to CPS.

"Some of the numbers we've heard throughout our public [budget] hearings are old TIF surplus numbers," DeNard said.

Andrea Calhoun with Parents 4 Teachers asked Clark if he would support the TIF surplus ordinance.

"I support that we continue our aggressive effort to getting TIF dollars that are truly available," Clark responded.

"That's a no?" another Parents 4 Teachers member asked.

"It's an answer," Clark replied.

Clark noted that TIF is a "one-time" revenue option.

"We need to solve our problems on a permanent basis," he stressed. "I welcome any help that we get, but we need permanent solutions. And one-time solutions don't really work."

The school board also heard concerns over the district's contracting practices. The CTU released a report this week claiming the school system's "rampant and unaccountable outsourcing is impoverishing and undermining Chicago Public Schools."

"Contracts should not be considered without close scrutiny and a full accounting of precisely how the company will deliver better services for less money," CTU researcher Sarah Hainds told the board. "Please read the report and the recommendations. Keep all of this in mind as you ask the teachers to give up $30 million to plug your budget deficit while you lay off teachers and cut special ed services."

After the board adjourned into its executive session, TIF surplus supporters left the room shouting "No TIFs for the rich!" and "TIF for schools!

Comments

The education industry is the department which is in the more dire need of finance reviews. There are so many things going on in the debt and the requirements of the schools across the state that need immediate attention otherwise the kids will be affected by the lack of resources and support!

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