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'Broke on Purpose' charges detailed in exposé of the lies of CPS budget claims and financial priorities under both mayors Daley and Emanuel... Chicago Teachers Union budget analysis exposes CPS officials' lies about reduction in administrative costs and other financial materials...

Issued July 1, 2015, the CTU budget analysis proves that budget claims by Rahm Emanuel and the Board of Education since May 2011 have been lies.A four-page document analyzing the massive Chicago Public Schools budget has been released by the Chicago Teachers Union. The document challenges every claim made since 2011 about the actual priorities of the city's massive public school system and reminds readers that many of the problems it exposes began prior to the administration of Mayor Rahm Emanuel (which began to impact the schools in May 2011) under the regime of Mayor Richard M. Daley.

Especially important for the future is that the analysis shows how ridiculous have been the claims by Mayor Rahm Emanuel and his allies and aides that CPS has "reduced administration" since the mayor appointed David Vitale President of the Board of Education and Jean Claude Brizard as his first "Chief Executive Officer" in May 2011.

The complete text of the CTU report follows below here. The only modification made to the original by Substance is that we placed the footnotes at the end of the analysis, rather than on individual pages.

Chicago Public Schools, BUDGET BRIEF, Prepared by the CHICAGO TEACHERS UNION

Authored by Pavlyn Jancov

Spending Away from Schools

CPS has repeatedly made the false claim that it has protected classrooms by cutting millions from Central Office and administrative support. Since 2011, the district claims to have made $740 million in administrative cuts.1 Its definition of “cuts” is non-standard: its “cuts” aren’t actual cuts in spending, but savings on discounted con¬tracts (“if the milk contract weren’t renegotiated, the district would be in the hole for $5 million more”). These “cuts” are often counter-balanced by increases in other areas.2 The reality is that there was an increase of $22 million, 17%, from 2011 to 2014, on spending for Central Office and network administrative positions.3 The budgeted amount for these positions, none of which are in¬volved in direct instructional supports to schools, was $130 million in 2011, and increased to $152 million as of December 2014. Positions paying a six-figure salary, increased in the budget by 30%, from $35 million to $45 million.

Where are the spending increases? Admin¬istrative offices change names, and departments are broken up, reorganized and aggregated back together so direct increases are impossible to dis¬cern. But we can see that despite its narrative of increasing supports and delegating control to the schools, CPS continues to invest in departments to implement its top down agenda. The Office of Strategy Management was newly created in 2012, and was budgeted for just under a $1 million this fiscal year. Combined with other rearranged departments involved in standardized-testing (Department of Assessment), expanding school choice (Innovation and Incubation) and test-based management of schools (Accountability), CPS now budgets a total of $6.1 million just for the position salaries across these departments. Departments with similar functions in 2011, including New School Development, the Office of Performance , Office of Student Assessment, and School Demographics and Planning, budgeted a total of $5.5 million for position salaries. Whenever CPS is making cuts to Central Office-based supports to schools, the cuts are not in departments used to push its corporate school reform agenda.

CPS has also nearly doubled the positions budgeted for its Communications office, increas¬ing salary expenditures from $886,000 for 12 positions in 2011 to $1.78 million for 22 posi¬tions in 2014. Similarly, its Family and Commu¬nity Engagement Office, which primarily serves to organize support for Central Office-directed initiatives, has ramped up from $1.5 million to $2.7 million. CPS has increased upper management at its Central Office. As they have rearranged network offices numerous times, a notable trend is that more of the salaried positions across those offices are for upper and middle management. The per¬centage of networks’ related budgets for salaries spent on management and upper administration doubled since 2011, from 43% up 88%of the $25 million now budgeted for network salaries. (4).

Misplaced Priorities

Teacher Evaluation: The CPS teacher evaluation system ignores the complex needs of our students and instead promotes time-consuming, stress-in¬ducing procedures that do not help students. This system is both unnecessary and expensive. Teach¬ers need time to work together, observe each other’s classes, take advantage of relevant profes¬sional learning opportunities and implement help¬ful suggestions from administrators or colleagues. Instead, teachers are spending hours learning about the intricacies of REACH, the Framework for Teaching, and the Performance Task Hand¬book; as well as writing pre- and post-conference forms, grading and uploading Performance Task scores, planning test-prep activities and analyzing standardized test data. In addition to the hours of time teachers spend on REACH instead of students, CPS spends a large amount of money on contractors and ven¬dors for its evaluation system. CPS spent over $2 million on True North Logic teacher evalua¬tion software since 2013, and will incur another $500,000 next year. The district spent $750,000 over the past two years for instructional frame¬work support services from the Consortium for Educational Change (CEC) and has entered a new five-year, $1.1 million contract with the company for evaluator certification. The district also spends $200,000 annually for the value-added calcula¬tions used in REACH. A contract with Battelle for Kids for communication services to staff about the evaluation system costs another $250,000. It is difficult to identify and quantify all Cen¬tral Office staff engaged directly or indirectly in teacher evaluation work, but when including just those whose primary role is teacher evaluation, combined with annual costs of the aforemen¬tioned contracts, at least $3 million was spent in the current year. Teachers deserve support and not additional stress when it comes to providing quality instruc¬tion, improving practice, evaluation and recogni¬tion for the roles they play in students lives.

Standardized Testing: Over $7 million was spent in FY15 for four contracts with Wireless Genera¬tion, NWEA and ACT Inc.5 The district also spent $1.7 million over the last two fiscal years on a contract with NCS Pearson for IT supports and services primarily related to tracking standard¬ized test data.6 The total budget for the Depart¬ment of Assessment was $8.3 million this year, and school-level expenditures for assessments stood at $1.7 million in December, for a total of $10 million. Reckless Outsourcing

The $260 million three-year contract with Ar¬amark for custodial services has already gone $22 million over budget in its first year. Teachers have reported garbage bags that are so flimsy they cannot hold any garbage; watered-down prod¬ucts; an outright lack of any bathroom supplies in the students’ bathrooms; and instead of the fancy “Zambonies” that CPS promised, many schools either received Swiffers or teachers had to buy supplies to clean their own rooms.

The $20 million no bid contract for SUPES was approved even though a principal training initiative was already in place through the Chica¬go Leadership Collaborative. CPS has also outsourced more nursing ser¬vices. CPS started outsourcing nursing to staffing agencies around 1994, but has increased the prac¬tice tremendously in recent years, reaching over $30 million in FY 2015. CTU nurses have reported that nurses from the temporary staffing agencies have not shown up for work, and that principals have frantically called the CTU nurses, begging them to leave the school where they are to fill the vacancy. Nurses assigned through CPS offices are already stretched thin, but outsourced services only create another managerial obstacle for schools to navigate — instead of a dependable resource.

Reprioritizing the budget for students

CPS needs to balance its budget by reprior¬itizing services to students. Millions are wasted on testing contracts, accountability systems that stratify our schools, bad financial deals and un¬necessary contracts. Instead, CPS needs to pro¬vide the following staff:

At least one certified school nurse or health services nurse stationed full time at every school. This would require hiring at least another 300 nurses at a cost of roughly $30 million, less than the amount we pay each year on toxic swaps to banks such as Loop Capital, Bank of America and J.P. Morgan. A certified librarian for every school would require hiring another 290 teacher-librarians, at roughly $29 million. Returning Central Office spending to 2011 levels, and reducing spending at the network offices and the Communications office would be enough to fund a fully staffed library in every school. A full-time social worker in every school would require hiring another 190 social work¬ers at a cost of roughly $19 million. The annual amounts misspent on standardized testing, the Assessment departments, and teacher evaluation would be more than enough to put a full-time social worker in every school so that all students, not just the special needs students the system currently barely provides for, receive needed services.

Indebted to Banks After more than a decade of skipped and reduced payments, the district has accumulated a steep debt to its employee pension funds. But the pensions are not the only interest-bearing debt the district has. The interest on debt to banks costs over $290 million a year, $36 million of which are interest payments tied to toxic swap instruments. Further, CPS has paid more than $250 million in the past for those swaps, and now stands to pay as much as $200 million in termina¬tion fees the banks can now demand. The district also shells out millions each year to various firms just for the fees associated with processing its bond sales—$2.34 million in the 2015 year, and $17 million since 2009. The city of Chicago also has billions in debt tied to toxic swap deals, and rather than bring suit, Mayor Rahm Emanuel “negotiated” with the banks and agreed to pay in full over $130 million in penalty termination fees to the bank — by taking out more long-term debt, with interest and transaction fees, from some of the same banks. And after a total of $674 million in bonds in May, the city will go to the bond market to borrow over $1 billion in June, pushing more expenses into the future and enriching banks and investors in the process. The district and the mayor have pinned the district’s financial woes on the pension debt — go¬ing to extraordinary and unconstitutional lengths to slash benefits and put off the payments — yet they refused to bring suit against the banks that sold them the interest rate swaps, despite evi¬dence that the risks of these deals were misrep¬resented. Balancing the CPS budget requires treating pension debt fairly, and clawing money back from bad deals with billionaires and banks. Chicago Public Schools are broke on purpose. They’ve used the annual specter of a financial cri¬sis to close down schools in disinvested neighbor¬hoods, slash staff and supports from our district schools and narrow the curriculum by extending the school day without appropriate funding for arts, music and libraries. At the same time as they have used the budget to cut resources, they have recklessly outsourced essential services to private crony companies; added new charter schools; spent millions in technology upgrades for stan¬dardized testing; expanded staff at Central Office when they have claimed to make cuts; and contin¬ued to invest in departments that are essential to the district’s agenda of over-testing our students and starving our schools through school choice. The real structural deficit is the educational debt CPS has to our students. Yet the administra¬tion places the blame on modest teacher pensions which it has refused to fund, while debt payments to banks and usurious interest rates are paid unfailingly without a whisper of dissent. Through their refusal to get progressive revenue, the may¬or and his peers from the financial sector have trapped the city and CPS in a cycle of broken budgets and a dependence on financial instru¬ments that exploit Chicago residents to enrich the corporate class. FOOTNOTES. [SUBSTANCE NOTE: in the original CTU document the footnotes are on the pages where the text appears. We have placed them here at the end. The notes are the same, unchanged except by location.] 1. http://cps.edu/fy15budget/Pages/overview.aspx

2. http://catalyst-chicago.org/2013/07/record-600-million-in-budget-savings/

3. Analysis of 2011 and 2014 position files. Food services, custodial, safety, instructional, special education, clinicians, and other staff that provide services in schools but are budgeted out of Central Office were all removed from the analysis.

4. Included in management and upper admin positions are department Chiefs, Directors, senior managers, program directors, project managers, senior professionals, strate¬gists and other upper administration. Positions in the Area Offices from 2011 are compared to positions in Network Offices in 2014.

5. BOE Action 13-0828-PR1, BOE Action 14-0625-PR1, BOE Action 14-0625-PR2, BOE Action 14-0625-PR3

6. BOE Action 13-0626-PR33.

Pavlyn Jankov , June 2015



Comments:

July 2, 2015 at 8:22 AM

By: Rod Estvan

Pavlyn Jankov's report

Pavlyn Jankov''s report really does not include any discussion of revenue and the property tax rate in the City as compared to the rest of Cook County. It also does not total the reductions of questionable expenditures discussed in this short report and demonstrate how they correct the current fiscal crisis of CPS. The idea that CPS is broke on purpose is done simply by assertion and there is no evidence presented that CPS had any type of long term strategy to create this fiscal disaster. There are many ways to connect the dots Jankov's report puts forward.

Then we have this statement: "The district and the mayor have pinned the district’s financial woes on the pension debt—go-ing to extraordinary and unconstitutional lengths to slash benefits and put off the payments—yet they refused to bring suit against the banks that sold them the interest rate swaps, despite evi- dence that the risks of these deals were misrep- resented. Balancing the CPS budget requires treating pension debt fairly, and clawing money back from bad deals with billionaires and banks." This statement is objectively correct, but there is a reason why neither the City or CPS has targeted the financial industry for relief. It's not just because the Mayor is colluding with these institutions.

What would that reason be? It's called capitalism, if CPS attempts to escape from its debt with out providing compensation they are not only libel but could face a complete credit cut off. The current situation of Greece is the best example of that dilemma. There is the possibility of of consolidating debt into a created authority that will pay off this debt in a structured way, that was done in 1979.

That authority imposed austerity on CPS and created a standard for a balanced budget. The immediate layoffs were about 700, about half of what CPS proposed yesterday. Pavlyn Jankov's report is really a critique without any proposed solutions. None of the potential solutions for the fiscal disaster CPS faces are good for children, but they do have to be examined.

Yesterday Vice President Sharkey discussed how Chicago is a city of wealth that builds river walks and cuts services to poor children. But the truth of the situation is that the majority of Chicago"s voters have no children in CPS and their self interests are not necessarily commensurate with those of CPS parents, teachers, and students. The situation we face in particular with $42 million in special education cuts looming is indeed depressing.

Rod Estvan

July 2, 2015 at 9:38 AM

By: Susan Ohanian

Chicago budget

In a Sept 8, 1993 USA TODAY op-ed piece on the shame of Chicago failing to open its school doors (for the 5th time in 10 years) because of the claim of not having enough money, I said that we should "Weep for Chicago" and then "Get mad as hell and do something about it."

In those halcyon days of longer op-eds, USA TODAY gave that one a graph and half a page. Several right-wing radio stations asked me to be on call-in shows, where people asked why they should care about Chicago. I repeated George's line about bad things starting in Chicago and spreading to infect us all, adding that my life is guided by the principle that I AM my brother's keeper and I repeated something from my op ed: "Whether we live in upstate New York or Beverly Hills, when Chicago bleeds, the rest of us must bleed, too. We must be outraged by the devastating inequalities between suburban and inner-city schools."

Outraged and scared. First Chicago, then YOU are next.

July 5, 2015 at 9:53 AM

By: Miriam Socoloff

Rod Estavan's comment about self-interest

It is in the interest of all Chicago homeowners to support fully funded schools because a good neighborhood school can greatly increase the value of your home. That is part of the reason why the north side aldermen have been fighting so hard against charter expansion.

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