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CPS LIES: Another year, another 'billion dollar deficit',... And another bunch of 'Magic Numbers' from CPS (and, as usual, the Chicago Tribune)... But this time, they assure us, 'It's the truth... honest it is! Honest!'...

George N. Schmidt - April 23, 2015

Heard the one about the 'Billion Dollar Deficit'? Right on schedule, nearly three months before the Board will even be presenting its Proposed Budget for public review, the Chicago Public Schools has presented the public with another huge "Deficit." This year's 'Billion Dollar Deficit', once again, is on the front page of the Chicago Tribune, which assures the world is really really true. Just like it has been doing for the past 22 or 23 years. So if you want to hold on for nearly two years, I've got a hundred dollar bet with you (not being Mitt Romney, I can't make one of those Bruce Rauner size bets, but you do what you can). Here's the bet: By the time the actual audited financial report on this year's April "deficit" claims have been published (which won't be until December 2016, and probably kept from the public until January 2017) we will learn, once again, that CPS (and the Tribune) have lied to us by publishing what we at Substance have been reporting as their "Magic Numbers" for more than two decades.

The Chicago Board of Education's "interim Chief Executive Officer" Jesse Ruiz deftly dodged most serious questions at the press conference held by a reluctant CPS following the Board's April 22, 2015 meeting. Ruiz had been part of the unanimous votes that approved all the contracts the Board had been giving away for four years. That was during its orgy of privatization and its attacks on the city's real public schools following their appointment by Mayor Rahm Emanuel in May and June 2011. As of April 2015, the SUPES contract, a no-bid deal for $20.5 million to a controversial north suburban pair of "edupreneurs" was the focus of a federal investigation. But many parents, teachers and other observers now view the SUPES deal as the tip of a corrupt iceberg that may be unprecedented even in the history of the nation's third largest school system. Substance photo by David Vance. How's that? They say it every year, some time between Februry and March. That "huge deficit" story that was on the front page of the April 22, 2015 Chicago Tribune Just as that story has been since CPS began presenting what a former Board secretary told me, almost ten years ago, the Board called "Magic Numbers." The "Magic Number" was the number CPS officials made up for the front page of the Tribune, at least as far back as 1992. That year, Manford Byrd was "superintendent" of Chicago's public schools. Or maybe it was Ted Kimbrough. Or maybe it was that woman from Brooklyn (the first one). The main thing was that the Magic Number be big enough to scare everyone and credible enough to pass at least one rather easy exam.

And then the editorial people at the Chicago Tribune decided it was "true" enough to go up on the front page. So in those days, the headline read, "Schools face $300 million deficit!" Etc.

The Magic Number improved over the year. By the time an ex-cop named Ron Huberman was Chief Executive Officer of CPS (by then, CPS didn't have a "superintendent" any longer) the Magic Number had increased to a billion dollars a year. So, for the past five years, school officials, backed by the Chicago Tribune's front page, have assured the world that Chicago's public schools are facing a "deficit" of a billion dollars, and therefore...

The therefore the past few years has been "pension reform." For years, it was no money for union raises (or lower class size, or anything like that).

But where did the number come from?

Easy.

Today, in April 2015, all CPS has is a "projected deficit." Nobody has shared any real numbers with anyone, and legally CPS isn't required to share its projected numbers with the public until June. That's when CPS is required by law to hold its annual budget hearings, after, also required by law, CPS has presented a "Proposed Budget" to the public.

The "deficit" between now and then is done by the simplest sleight of hand, the kind of card trick you can begin learning on You Tube:

STEP ONE. Overestimate your expenses.

STEP TWO: Underestimate your revenues.

STEP THREE -- THE MAGIC NUMBER!

The way it works in practice, for the past two decades, has been that Board officials make up the Magic Number (the one big enough to scream austerity out of the Tribune's front pages) and then work backwards through Step Two and One from there.

Before mayoral control began in 1995, CPS had the "Chicago School Finance Authority," which had the power to reject any CPS budget that wasn't only "balanced" going into the upcoming fiscal year -- but also reasonably balanced going forward for three full years. Under the SFA, the Magic Number was set by adjusting what they called the "Restriction Calculation." That was the number of dollars that CPS was required to hold in "reserve". When the SFA was abolished (once Richard M. Daley was awarded mayoral control by the Republicans in Springfield in 1995), the Magic Numbers were set by school officials, rather than by the experts in the SFA. I was first told about them nearly ten years ago by Tom Corcoran, who had been secretary of the board (like Estela Beltran is today) for years and years. After his retirement, Tom told me about how they made up the magic numbers, and why they got away with them year after year thanks to the cooperation of the north suburban men (and a few women) who ran (and mostly still run) the Chicago Tribune.

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