Who Is In Charge

Hidden bummer factors abound for education

The headline from the June state revenue forecasts is bad enough – Colorado state government faces a cumulative general fund revenue shortfall of $838 million through the middle of 2012, meaning no respite from budget cutting and fund shifting.

But, while higher education actually may be somewhat shielded from further cuts, the fine print of the forecasts contains some disheartening news for K-12 schools.

Legislative and executive branch economists gave their quarterly revenue forecasts to the Joint Budget Committee and other legislators during a standing-room-only packed with executive branch officials and lobbyists.

Revenues are $249 million short to fund the current 2008-09 budget, which closes June 30. However, mechanisms approved by the 2009 legislature will allow Gov. Bill Ritter to balance that budget without the need for additional legislative action. Total state spending from all sources is about $18 billion. The tax-supported general fund provides about $7.5 billion of that.

“We will be able to hold 2008-09 solvent … so we will not have to have a special session,” concluded Sen. Moe Keller, D-Wheat Ridge and chair of the Joint Budget Committee.

However, the $249 million gap will roll into the 2009-10 budget, which along with additional projected shortfalls will bring the total to $873 million through the 2010-11 fiscal year, declining slightly to $838 million by the end of fiscal 2011-12. (The 2009 legislature previously had to cut or replace $1.4 billion in the 2008-09 and 2009-10 budgets.)

While the forecast appears to mean the 2010 legislature will have to look hard for budget cuts and fund transfers, it may be difficult to get serious money out of higher education or K-12 spending.

State colleges and universities traditionally have been the budget-cutting victims in past downturns because higher ed has no dedicated or protected sources of revenue.

But the federal stimulus – the American Recovering and Reinvestment Act – requires states to keep higher ed state spending at 2005-06 levels to be eligible for federal aid. That’s just what the 2009 legislature and Ritter did – reducing state support to those old levels and then keeping overall college spending at 2008-09 amounts with $300 million in stimulus funds. (Tuition increases of 9 percent across the higher ed system also are part of the budgetr.) The plan is to effectively freeze college spending at current amounts through 2009-10 and 2010-11, when the stimulus ends.

Additional cuts in state support would require federal waiver to avoid loss of the stimulus money.

So, “higher education is not an option because it actually is protected by the federal government,” Keller said.

K-12 is protected by Amendment 23, although it now appears doubtful that the $110 million in school aid that’s being held in “escrow” until January will be released.

There also is expected to be increased debate over whether some parts of K-12 spending – primarily the so-called factors of cost of living, at-risk and school size – are covered by Amendment 23. Earlier this year, some lawmakers urged doing that, but the escrowed $110 million was the compromise that made it out of the 2009 session. Even that step was seen as an A23 violation by some/

Deeper in the economic forecasts is additional bad news for education. The Office of State Planning and Budgeting is projecting 0 inflation in 2009, which could dramatically affect calculation of the Amendment 23 formula for the 2010-11 budget year.

“We’re showing very low levels of inflation – flat – for 2009,” said Todd Saliman, OSPB director.

Inflation in 2008 was 3.9 percent for 2009-10 budget, meaning state support of K-12 spending increased 4.9 percent, including the 1 percent sweetener required by A23. Legislative Council is predicting .4 percent in 2009 and 1.6 percent in 2010. The OSPB is predicting 0 percent in 2009 and 1.5 percent in 2010.

If OSPB is right, that could mean a 2010-11 increase of state support for K-12 of only 1 percent plus enrollment growth and whatever backfilling the state has to provide because of drops in local property tax revenues.

According to the OSPB forecast, “the budgetary increase for K-12 education in FY 2010- 11 is predominately anticipated to be a function of changes in pupil count, changes in local share from revisions to property valuations, and the mandatory 1.0 percent increase required per Amendment 23.  Because personal income growth from 2008 to 2009 is projected to equal 0.2 percent, the 5.0 percent General Fund maintenance of effort requirement for K-12 total program will be suspended for FY 2010-11.”

With so much pressure on the overall budget, many lawmakers will resist giving K-12 more than A23 requires.

Sen. Bob Bacon, D-Fort Collins and chair of the Senate Education Committee, attended Monday’s briefing, along with several other lawmakers who aren’t JBC members.

After the meeting, he predicted to EdNews that the debate over the factors will reopen and said, “K-12 is not positioned well,” given the predicted low inflation. He noted that things could be especially difficult for districts with declining enrollment – well over half of Colorado’s 178 districts. Even with the current state increase, many districts are cutting overall spending – and resisting teacher demands for raises – because overall costs are rising faster than state aid.

State personal income also is declining, which could reduce revenue flowing into both the State Education Fund and the amount of general fund money that has to be used to support the Amendment 23 formula.

The SEF receives one-third of 1 percent of income tax revenues. The Legislative Council report said that that the fund received $407.9 million in 2007-08, will get $339.9 million in 2008-09, down 16.7 percent, and $340 million in 2009-10.

Some legislators, most notably Sen. Chris Romer, D-Denver, argue that a Colorado Supreme Court decision earlier this year allows lawmakers to eliminate tax exemptions and raise revenue with voter approval. The budget pressures could make doing so attractive, but there will be countervailing political pressures in an election-year session.

House Speaker Terrance Carroll, D-Denver, said Monday, “For many lawmakers, this will be one more push to engage our constituents in a larger discussion about the role of government.”

The next revenue forecasts will be issued in late September, at about the same time the Ritter administration will begin making detailed suggestions for budget rollbacks to the JBC.

Ritter said Monday, “I will be meeting with the JBC, legislative leaders and my budget staff in the coming days to put together that balancing plan.”

The annual December forecasts tee up the budget debate for the legislative session, and then lawmakers generally wait for the March forecasts before finalizing the upcoming fiscal year’s budget.

One more higher ed note

The 2008 legislature created a Higher Education Federal Mineral Lease Revenue Fund designed to provide a revenue stream for backlogged college construction projects. The OSPB forecast estimates that those revenues will be sufficient to continue payments on existing projects but recommends that no new projects be started because of weak interest revenues in the fund.

Do your homework

For budget mavens, both reports provide a great deal of detail both about state finances and the current condition of the state and national economies. (The Legislative Council report also includes economic snapshots of various Colorado regions.) As is usually the case, legislative economists generally are more pessimistic this time than those in the executive branch. The major difference in this round of forecasts appears to be over estimates of unemployment.

Legislative Council forecast
Office of State Planning and Budgeting forecast


Boundary lines of proposed South Loop high school drive wedge between communities

PHOTO: Cassie Walker Burke
About 30 speakers weighed in on a boundary proposal for a new South Loop high school at a public meeting at IIT.

The parent, wearing an “I Love NTA” T-shirt, said it loudly and directly toward the end of the public comment section Thursday night. “It sickens me to be here today and see so many people fighting for scraps,” said Kawana Hebron, in a public meeting on the boundaries for a proposed South Loop high school on the current site of National Teachers Academy. “Every community on this map is fighting for scraps.”

The 1,200-student high school, slated to open for the 2019-2020 school year near the corner of Cermak Road and State Street, has become a wedge issue dividing communities and races on the Near South Side.

Supporters of NTA, which is a 82 percent black elementary school, say pressure from wealthy white and Chinese families is leading the district to shutter its exceptional 1-plus rated program. A lawsuit filed in Circuit Court of Cook County in June by parents and supporters contends the decision violates the Illinois Civil Rights Code. 

But residents of Chinatown and the condo-and-crane laden South Loop have lobbied for an open-enrollment high school for years and that the district is running out of places to put one.

“I worry for my younger brother,” said a 15-year-old who lives between Chinatown and Bridgeport and travels north to go to the highly selective Jones College Prep. She said that too many students compete for too few seats in the nail-biting process to get into a selective enrollment high school. Plus, she worries about the safety, and environment, of the schools near her home. “We want something close, but good.”

PHOTO: Courtesy of Chicago Public Schools
The “general attendance” boundary for the proposed South Loop high school is outlined in blue. The neighborhoods outlined in red would receive “preference,” but they would not be guaranteed seats.

One by one, residents of Chinatown or nearby spoke in favor of the high school at the meeting in Hermann Hall at the Illinois Institute of Technology. They described their long drives, their fearfulness of dropping off children in schools with few, if any, Chinese students, and their concerns about truancy and poor academics at some neighboring open-enrollment high schools.

But their comments were sandwiched by dissenting views. A member of South Loop Elementary’s Local School Council argued that Chicago Public Schools has not established a clear process when it comes to shuttering an elementary and spending $10 million to replace it with a high school. “CPS scheduled this meeting at the same time as a capital budget meeting,” she complained.

She was followed by another South Loop parent who expressed concerns about potential overcrowding, the limited $10 million budget for the conversion, and the genesis of the project. “It’s a terrible way to start a new high school – on the ashes of a good elementary school,” the parent said.

The most persistent critique Thursday night was not about the decision to close NTA, but, rather, of the boundary line that would determine who gets guaranteed access and who doesn’t. The GAP, a diverse middle-class neighborhood bordered by 31st on the north, 35th on the South, King Drive to the east and LaSalle Street to the west, sits just outside the proposed boundary. A parade of GAP residents said they’ve been waiting for decades for a good option for their children but have been locked out in this iteration of the map. Children who live in the GAP would have “preference” status but would not be guaranteed access to seats.

“By not including our children into the guaranteed access high school boundaries – they are being excluded from high-quality options,” said Claudia Silva-Hernandez, the mother of two children, ages 5 and 7. “Our children deserve the peace of mind of a guaranteed-access option just like the children of South Loop, Chinatown, and Bridgeport.”

Leonard E. McGee, the president of the GAP Community Organization, said that tens of millions in tax-increment financing dollars – that is, money that the city collects on top of property tax revenues that is intended for economic development in places that need it most – originated from the neighborhood in the 1980s and went to help fund the construction of NTA. But not many of the area’s students got seats there.

Asked how he felt about the high school pitting community groups against each other, he paused. “If we’re all fighting for scraps, it must be a good scrap we’re fighting for.”

The meeting was run by Herald “Chip” Johnson, chief officer of CPS’ Office of Family and Community Engagement. He said that detailed notes from the meeting will be handed over to the office of CEO Janice Jackson. She will make a final recommendation to the Board of Education, which will put the plan up for a vote.

budget season

New budget gives CPS CEO Janice Jackson opportunity to play offense

PHOTO: Elaine Chen
Chicago Public Schools CEO Janice Jackson announced the district's $1 billion capital plan at Lázaro Cardenas Elementary School in Little Village.

Running Chicago’s schools might be the toughest tour of duty in town for a public sector CEO. There have been eight chiefs in a decade – to be fair, two were interims – who have wrangled with mounting debt, aging buildings, and high percentages of students who live in poverty.

Then there’ve been recurring scandals, corruption, and ethics violations. Since she was officially named to the top job in January, CEO Janice Jackson has had to clean up a series of her predecessors’ lapses, from a special education crisis that revealed families were counseled out of services to a sexual abuse investigation that spotlighted a decade of system failures at every level to protect students.

But with budget season underway, the former principal finally gets the chance to go on the offensive. The first operations budget of her tenure is a $5.98 billion plan that contains some good news for a change: 5 percent more money, courtesy of the state revamp of the school funding formula and a bump from local tax revenues. CPS plans to funnel $60 million more to schools than it did last school year, for a total of $3.1 billion. Put another way, it plans to spend $4,397 per student as a base rate — a 2 percent increase from the year prior.

CPS’ total budget comes out to $7.58 billion once you factor in long-term debt and an ambitious $1 billion capital plan that is the focus of a trio of public hearings Thursday night. When it comes to debt, the district owes $8.2 billion as of June 30, or nearly $3,000 per every Chicago resident.

“The district, without a doubt, is on firmer footing than it was 18 months ago, but they’re not out of woods yet,” said Bobby Otter, budget director for the Center for Tax and Budget Accountability. “When you look at the overall picture (the $7.58 budget), they’re still running a deficit. This is now the seventh year in a row they are running a deficit, and the amount of debt the district has, combined with the lack of reserves, leaves them with little flexibility.”

Earlier this week, standing in front of an audience of executives at a City Club of Chicago luncheon, Jackson acknowledged that it had been an “eventful” seven months and said she was ready to focus on strategies for moving the district forward. “I won’t be waiting for next shoe to drop or wasting time and resources waiting for next problem. I want to design a system to educate and protect children.”

“I’m not in crisis mode,” she added.

Here’s what that looks like in her first year when you just consider the numbers. The biggest line items of any operating budget are salaries, benefits and pensions: Taken all together, they consume 66 percent of CPS’ planned spending for the 2018-2019 school year. Rounding out much of the rest are contracts with vendors ($542.6 million, or 9 percent), such as the controversial janitorial deals with Aramark and SodexoMAGIC; charter expenditures ($749 million, or 13 percent); and spending on transportation, textbooks, equipment, and the like (12 percent).

A closer look at how some of those items are allocated offers a window into Jackson’s vision. The Board of Education is scheduled to vote on the plan July 25.

Investing in choice

Earlier this month, the district announced a nearly $1 billion capital plan, funded by bonds, that would support new schools, technology upgrades, and annexes at some of the district’s most popular campuses. The operating budget, meanwhile, accounts for the people and programs driving those projects. It proposes nearly doubling the staff, from 10 to 17, in the office that manages charters, contract programs, and the creation of new schools. It reestablishes a chief portfolio officer who reports directly to the CEO. And it adds expands access to International Baccalaureate programs and Early College STEM offerings. In a letter at the beginning of the 2019 Budget Book, Jackson said such expansions “move the district closer to our goal of having 50 percent of students earn at least one college or career credential before graduating high school.” 

Advocating for students

The budget seeds at least two new departments: a four-person Office of Equity charged with diversifying the teacher pipeline, among other roles, and a 20-person Title IX office that would investigate student abuse cases, including claims of student-on-student harassment.

Leaning into high schools

Fitting for a budget designed by a former high school principal – Jackson was running a high school before age 30 – the plan leans in to high schools, establishing $2 million to fund four new networks to oversee them. (That brings the total number of networks to 17; networks are mini-administrative departments that track school progress, assist with budgeting, and ensure policy and procedures are followed.) And it earmarks $75 million across three years for new science labs at neighborhood high schools. What’s more, it supports 10 additional career counselors to help campuses wrestle with a graduation mandate – set forth by Mayor Rahm Emanuel – that seniors have a post-secondary plan to graduate starting with the Class of 2020.

Throwing a lifeline to small schools

The budget also sets forth a $10 million “Small Schools Fund” to help schools with low enrollment retain teachers and offer after-school programs. It also earmarks an additional $5 million to help schools facing precipitous changes in enrollment, which can in turn lead to dramatic budget drops.   

Supporting modest staff increases

After a round of layoffs were announced in June, the budget plan adds at least 200 teachers. But the district would not provide a clear accounting of whom to Chalkbeat by publication time. Earlier this week, it announced plans to fund additional school social workers (160) and special education case managers (94).

The district plans to add positions for the upcoming 2018-2019 year.

As Chicago Teachers Union organizer and Cook County Commissioner candidate Brandon Johnson pointed out in an impromptu press conference earlier this week in front of district HQ, the budget is still “woefully short” on school psychologists, nurses, and counselors. And it doesn’t address the calls from parents to restore librarians and instructors in such subjects as art, music, physical education — positions that have experienced dramatic cuts since 2011. “What is proposed today still leaves us short of when (Mayor Emanuel) took office,” Johnson said. “The needs of our students must be met.”

Principal Elias Estrada, who oversees two North Side schools, Alcott Elementary and Alcott High School, said he was still figuring out how the additional staffing would work. He’s getting another social worker – but he oversees two campuses that sit three miles apart, so he figures he’ll have to divide the person’s time between campuses. Estrada asked the board at Monday’s budget hearing to help him understand the criteria it uses to determine which schools get extra staff or additional programs, like IB. “I need a counselor, a clerk, and an assistant principal,” he said; currently those positions also are shared between the elementary and the high school.

After the meeting, he said that schools might have gotten slightly bigger budgets this year, but the increase was consumed by rising salaries and he wasn’t able to add any positions. What’s more, his building needs repairs, but it didn’t get picked for any of the facilities upgrades in the $1 billion capital plan that accompanied the budget.

“What is the process?” he asked. “The need is everywhere.”

At two public hearings on Monday, fewer than a dozen speakers signed up to ask questions of the board, central office administrators, or Jackson.

To see if your school is getting one of the newly announced positions or any funding from the capital plan, type it in the search box below.