Chicago 'deficit' claims were lies... 2006 Special Ed cuts were not necessary!

One year ago, schools across Chicago were reeling from budget cuts which eliminated more than 700 special education positions, most of them assistants to teacher who provided basic services to disabled children such as diapering and transportation. According to CPS Chief Executive Officer Arne Duncan, the cuts were necessitated by a massive “deficit” that the school system faced. Between January and June 2006, Duncan claimed that the deficit was in excess of $300 million, and that the special education cuts could be made without depriving disabled children of the services to which they were entitled. Despite warnings from special education advocates that Duncan’s claims were untrue, the cuts went through, special education children were deprived of services across the city. Attorneys for CPS spent the first semester of the 2006-2007 in federal court claiming that the cuts hadn’t harmed any children and were not in violation of the “Corey H” federal consent decree. U.S. District Judge Robert Gettleman deferred to the claims of CPS that the “deficit” had been real and that the cuts were necessary, stzating repeatedly that he was not going to second guess CPS budget projections.

But while the impact of the cuts was being felt in hundreds of classrooms across the city and by hundreds — if not thousands — of the city’s most needy children, a different story was beginning to appear in the CPS budget offices.

At the time the cuts were proposed in June 2006 and when the Board of Eduation voted on its budgets (two were approved, one for operations and one for capital), officially CPS was “balancing” its budget(s) by cutting $26.5 million from special education and drawing down its reserves by more than $70 million. At the time the draw down of the reserves was proposed, CPS offiicals, including Arne Duncan, warned that drawing the reserves down further would be fiscally irresponsible and might jeopardize the school system’s bond rating. By late 2006 — by Christmas vacation at the latest — it was clear to CPS officials that the increases in all revenues (federal, state, and local) had been more than CPS had claimed. As a result, as 2006 ended and 2007 began, the reserves in the CPS coffers hit all time highs and stayed there.

Not once was this fact reported in public at themonthly meetings of the Chicago Board of Education. The fact only came out in July 2007, when Arne Duncan fielded a specifc question about the average reserves over the previous 12 months to Pedro Martinez, who had been promoted to Chief Financial Officer after the 2006 budget hearings. Martinez stated that over the previous 12 months the reserves had averaged $380 million, at least $100 million more than they should have had the reserves been tapped to cover the “deficit” Duncan had claimed in early 2006.

By July 2007, however, two of the most important independent budget research organizations had been forced out of business by the foundations that support such activities. On February 1, 2007, both the Cross City Campaign for Urban School Reform and the Neighborhood Capital Budget Group were shut down after the foundations refused to continue their funding. The story didn’t exist. 


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