School Finance

Compact model of school finance plan still in the shop

A stripped-down version of last year’s school finance overhaul may soon join the growing line of bills that hope to tap a one-time surplus of K-12 funding.

But that proposal may face resistance from groups that want to increase basic school funding, not pay for new programs, and it may conflict with plans to save some surplus funds for the future.

Sen. Mike Johnston’s Senate Bill 13-213 didn’t go into effect because voters subsequently defeated Amendment 66, the ballot measure that would have paid for it. So the Denver Democrat now is scavenging parts of that plan to build a smaller model he hopes to sell to the 2014 legislature.

Johnston said last week that the bill could be introduced within a few weeks, but the timetable likely depends on how much support Johnston can gather. The bill’s contents are a moving target, and some influential interest groups that have kicked the tires aren’t impressed. Negotiations are continuing.

On the other hand, taking the bill public soon may be necessary to give Johnston’s ideas visibility in the discussion over how to use what could be as much as $1 billion available in the State Education Fund (SEF), an account that’s dedicated to K-12 spending.

“We need to make our case in the midst of all the other education debate,” said Johnston, who is working on the bill with Rep. Millie Hamner, D-Dillon, and Rep. Carole Murray, R-Castle Rock.

Six bills with a combined draw on the SEF of $40 million already have been introduced. Another 10 bills without specific price tags also are in the mix, including potentially expensive plans to expand full-day kindergarten and broaden services for English language learners.

The 2013 coalition is fraying

Johnston’s SB 13-213 and A66 were a big political compromise intended to unite various education interests, from reform groups to school districts, because the $1 billion in new income tax revenue would have paid for some initiatives reformers wanted and for partial restoration of recent years’ budget cuts, something districts wanted. (Refresh your memory on the details in this story from the Chalkbeat Colorado archives.)

Since there’s now no new money for anybody, jockeying for what funding is available has intensified competition among interest groups, and all eyes are focused on the SEF.

The fund is more flush than it’s been in years, primarily because a 2012 law put $1.1 billion in state surpluses into the SEF. Legislative economists project the SEF will contain about $2 billion when the 2014-15 budget year starts next July 1. Some $850 million already is scheduled to be spent, leaving a balance of just under $1.2 billion when the 2014-15 year ends.

Executive branch economists in the Office of State Planning and Budgeting take a more conservative view, estimating there will be $1.6 billion in the SEF at start of 2014-15, $887 million in planned spending and a $712 million ending balance.

Whatever the number, it’s a tempting target for lawmakers, even it’s one-time money, unlike the $1 billion-plus that A66 would have generated for schools every year.

Johnston-Hamner bill would combine key initiatives

While other legislators are proposing individual dips into that pot, Johnston is working to assemble a plan that would combine several spending programs in a single bill.

Those ideas are downsized versions of some programs and spending proposed in SB 13-213, leading some statehouse observers to dub the new measure “Son of 213.” Its reported formal working title is the Student Success Act.

“We have some concepts out there,” Johnston said, without going into details. He noted he’s looking for Republican support for the bill. (Republican lawmakers, Johnston allies on previous education bills, abandoned him last year over SB 13-213 because they opposed the tax increase.)

According to several people familiar with the discussions, the following elements are being considered for inclusion in the bill. The cost is estimated at $230 to $250 million, about half in one-time spending and half in recurring annual costs. As with the elements, the cost is a moving target.

  • Increased kindergarten funding – The bill may include $100 million to increase state reimbursement for kindergarten students as an incentive to expand full-day programs. (Kindergarten reportedly has replaced increased preschool funding as a priority in an effort to gain GOP support.)
  • Reform implementation – Also under consideration is $100 million for districts to help them pay for implementation of new standards, tests and educator evaluations.
  • Early literacy – Districts also could receive $20 million to help fund implementation of the 2012 READ, which requires students to be reading at grade level by the time they enter fourth grade.
  • English language learners – The measure may include $15 million for expansion of services to these students.
  • Enrollment counting – Conversion to the average daily membership method of counting enrollment could get $10 million for technology costs.
  • Financial transparency – Districts also could receive $5 million for the costs of improved spending reporting to the public.
  • Charter school construction – Also under consideration is providing an additional $20-$25 million to charter schools for facilities needs.

Republican lawmakers already have introduced individual bills related to kindergarten funding, English language learners, enrollment counting, financial transparency and charter construction needs. While those bills are unlikely to pass on their own in the Democratic-majority General Assembly, including those issues in his bill could give Johnston a lever to gain some GOP support.

Districts push back on earmarked funding

Plans to dip into the SEF face two big hurdles.

The first is the push by the Colorado Association of School Boards, the Colorado Association of School Executives and the Colorado Education Association to reduce the “negative factor,” the formula used by the legislature to reduce annual school funding from how the state funding formula otherwise would have calculated it. It’s a device used to balance the overall state budget.

Wish list for SEFVarious bills propose to tap the fund to pay for such things as:
  • Data upgrades
  • ECE quality improvement
  • Charter facilities
  • Teacher bonuses
  • Gifted & talented
  • Financial transparency
  • Full-day kindergarten
  • School meals
  • Enrollment count system
  • ELL program expansion

Gov. John Hickenlooper’s revised 2014-15 budget proposal calls for $5.7 billion in K-12 spending, including $3.78 billion in state funds. That would be a $241.1 million increase over this school year. On top of that districts would receive $276.7 million in what’s called categorical funding, money that’s earmarked for ELL students, special education, transportation and certain other costs.

The current negative factor is estimated at $1.004 billion. The governor’s budget would take it to about $1.002 billion next year.

In the wake of A66’s defeat, district interests are pushing hard to use any extra money to “buy down” the negative factor and not to fund new programs like Johnston is proposing.

The school boards group is pushing for a buy down of at least $100 million, and the Denver Area Superintendents Council is suggesting a $275 million increase in school spending, most of it to reduce the negative factor and some of it to increase support for at-risk students. A newly formed group of high-poverty districts also may push for additional at-risk funding.

Without some movement on the negative factor, key education interest groups are highly skeptical about Johnston’s bill-in-progress. District lobbyists say they aren’t getting much sympathy about the negative factor from Democratic leaders, at least in the House.

Spend now or spend later?

The second hurdle to big raids on the SEF is the desire by the Hickenlooper administration and legislative budget writers to maintain a healthy balance in the fund as a cushion against education spending needs in future years, especially if the economy takes a downturn.

K-12 schools are funded by a combination of money from the SEF and the state’s main General Fund. If the schools spending base is increased, even if that initially comes from the education fund, the General Fund bears most of the burden in future budget years. That’s because the state constitution requires base funding to increase by enrollment and inflation every year.

SEF primer

The administration would like to leave a balance of about $700 million in the SEF at the end of 2014-15, letting it decline to $400 million at the end of 2017-18. (In addition to the one-time infusion of cash, the SEF receives an annual share of income tax revenues totaling more than $500 million a year.) Keeping a healthy balance in the education fund allows budget writers to reduce the pressure of K-12 spending on the General Fund.

So lawmakers face a three competing interests when they consider school funding this session – new programs, reducing the negative factor and saving for future education costs.

The riddle likely won’t be answered until April, after new state revenue forecasts are issued in late March, after the main state budget bill firms up and after legislative leaders choose the winners from among all the new spending bills proposed by lawmakers, both for education and other state programs.

Future of Schools

CPS $1 billion capital budget hearings: Questions, demands, and mixed feelings

PHOTO: Elaine Chen
Community members gave passionate testimonies at a public hearing at Malcolm X College for the proposed capital budget.

Chicago Public Schools surprised many when it dropped its biggest facility spending plan a few weeks ago with a big “B”—that stands for billion—in the headline.

Considering that the district had planned to spend less than $200 million on capital needs for the 2018-2019 school year, this plan represents a five-fold increase. It relies largely on bonds to pay for building improvements and introduces new schools amid steadily shrinking enrollment, mostly in areas around gentrifying neighborhoods.

Divergent opinions surrounding the capital budget emerged at three concurrent community meetings CPS held Thursday night at City Colleges sites around Chicago: Malcolm X, Harry S. Truman, and Kennedy-King. The Chicago Board of Education is scheduled to vote on the district’s $7.58 billion budget, including the capital plan, on July 25.

At the Malcolm X meeting, CPS Senior Policy Advisor Cameron Mock presented a map showing capital budget projects distributed evenly throughout the city, but, as CPS Chief Financial Officer Jennie Bennett acknowledged, “not all projects are equal.”

Bennett explained that “the allocation of these projects were really in large part due to feedback about need.”

Chalkbeat mapped out the costliest capital projects, and found that the West side, particularly the Southwest side, received the smallest concentration of large investments.

The map shows investments in facility needs over $5 million, all programmatic investments, all investments in overcrowding relief, investments in site improvements over $500,000, as well as sites of the two new classical schools. The map does not show the two new schools in Belmont Cragin and the Near West Side, because the district has not yet specified exact locations. The district also has not yet identified schools for many of its capital projects, such as technology and facility upgrades. See the full plan here.

At Thursday’s hearings, parents from schools that did receive significant funding, such as Christopher Elementary School in Gage Park and Hancock High School in West Elsdon, expressed thanks. But others asked for for more investment.

Residents questioned the plan to build a new $70 million high school on the Near West Side. Lori Edwards, a Local School Council member at Crane Medical Prep on the Near West Side, said that Crane desperately needed air conditioning and heating, doors with windows, and security cameras.

“I’m surprised that we can’t just get basic things instead of building a new high school,” she said.

Questions also surrounded the $44 million assigned for a new elementary school in Belmont Cragin on the Northwest Side to address overcrowding. A sophomore at Prosser High School in Belmont Cragin asked for investment in her school instead. At Prosser, she said, “there needs to be reconstruction in the classrooms, the paint on the walls is falling off.”

Leticia Neri, a mother of two students at Camras Elementary School in Belmont Cragin, was wary of adding a school to the neighborhood. Her children used to attend Burbank Elementary, which is also in Belmont Cragin. When Acero Roberto Clemente, a charter school, opened just two blocks down in 2013, she said that Burbank lost pupils.

However, Mock said the proposed new school was a response to demand in Belmont Cragin. And in fact, several miles north in Uptown, where CPS’s Chief Operating Officer Arnie Rivera and other officials led a meeting Thursday, a handful of Belmont Cragin residents argued in favor of the school.

Parent Mariela Estrada said Belmont Cragin Elementary, which her 9-year-old attends,  is overcrowded. While the district’s formula doesn’t label any Belmont Cragin school overcrowded, the numbers paint a different picture. Belmont Cragin Elementary’s 414 students share a building with Northwest Middle School’s 545 pupils.

“I am really, really grateful right now for what we are getting,” she said.

The North Side, as the map above shows, will receive the most capital funding. Several attendees expressed gratitude for investments in area schools, especially a new ADA compliant gym at McCutcheon Elementary in Uptown, and an expanded test-in Decatur Classical School program in West Ridge, that will add seventh and eighth grades. Students have to test into the city’s five highly competitive classical schools, and hundreds are turned away every year.

Even so, not all North Side residents felt their schools would receive what they need, and many questioned CPS’ process for planning improvements.

A mother of a student at Schurz High School, in Old Irving Park, thanked CPS for a plans to install a new athletic field, but mentioned the school’s leaky roof, faulty heating system, green and black mold under carpets, and peeling paint in the auditorium. “It’s gross,” she said.

Parent Dawne Moon, said Kilmer Elementary School in Rogers Park is “not currently a safe environment.” Moon, a Local School Council member,  complained of rusted lockers, “bathrooms that smell like urine, even after they are cleaned,” temporary covers over holes in the roof that keeps water from pouring into classrooms, and of bricks falling from the ceiling in the school’s gym.  

“We can hope that the next brick doesn’t fall on a kid,” she said.

Betsy Vandercook, co-chair of the education committee at Network 49, a progressive neighborhood group based in Rogers Park, said schools in her neighborhood would get less than what adjacent communities like Edgewater and West Rogers Park would receive.

“Rogers Park is not, for whatever reason getting the same resources that many other North Side communities are getting,” she said about the capital budget proposal. “Take this back, look at it again, look at what is and isn’t needed.”

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.