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'Clout's Cesspool' Shows Mendacity of CPS Budget Claims

Few articles published in the pages of Substance or on line have generated as much comment, both on blogs and elsewhere, as 'Clout's Cesspool.' The article, and its companion chart showing a list of those people working in Chicago's central office at salaries of over $100,000 per year (as of June 2008, the last full year of the Duncan administration), has also provoked some criticism.

One challenge has been to the claim made in the original article (published in the Substance print edition of October-November 2008) that CPS has claimed reduction in 'administrative costs' (often called "Central Office" costs, depending upon the presentation) so often that if the claims had been true over the seven years when Arne Duncan was CEO of CPS, there would be few or no people still working in the school system's massive central administrative offices at 125 S. Clark St. in Chicago. That was obviously a ridiculous claim.

And yet, something close to it was part of the factual "news" reported from Chicago as part of the way the Duncan administration prepared and reported its budget to the news media.

On June 6, 2006, for example, CPS presented its "Proposed Budget" to the media and announced its annual budget hearings. It was to be the last time Duncan held the budget hearings in June, as required by law, but at the time no one was aware of that. (The hearings in 2007 and 2008 were postponed until August, two months after they were supposed to be held according to Illinois law).

At the June 2006 budget press conference, Duncan stood in front of a chart that purported to show how under his administration, "Central Office Costs" had been reduced from $245 million (in FY 2004) to $198 million (in FY 2007, the year for which the Proposed Budget was being presented). The simple bar graph was presented without explanation, as a fact. Had Duncan continued to reduce "Central Office" at the same rate in the proposed budgets for FY 2008 and FY 2008 (as he claimed he would do), by July 1, 2008, the first day of the fiscal 2009 school year, Chicago would have been paying approximately $160 million for its "Central Office."

Every year during the Duncan administration, the Chicago Board of Education claimed that 'Central Office Costs' had been reduced, again and again. Above, a chart that was utilized at the June 6, 2006, press conference announcing the proposed CPS budget for FY 2007 (July 1, 2006 - June 30, 2007) shows the cost of 'Central Office heading 'down' at a rate of five to six percent per year. According to the chart, which Arne Duncan referred to during his presentation on that year's proposed budget, the Duncan administration had been reducing what it called "Central Office" costs by roughly $14 million per year. Had the trends continued (as Duncan claimed in subsequent years they had, without ever again utilizing such a chart), by the time CPS introduced its FY 2009 budget (for the 2008 - 2009 school year) in August 2008, "Central Office" would have been reduced to a cost of around $170 million per year. Had the trends in the charts been accurate by the final year of Duncan's administration, the top executives working at CPS (those whose salaries were in excess of $100,000 and who worked in Central Office) would have been earning more than the supposed 'Central Office" portion of the system's $5 billion 'Operating Budget.' Once CPS was confident that its numerical claims -- whether about finances or test scores -- would not be examined by Chicago reporters, this type of 'fact' was reported more and more, then recycled as news in the Chicago press. Substance photo by George N. Schmidt. On July 1, 2008, the cost of the 268 highest paid individuals in Central Office was between $34 million and $40 million, depending upon the cost of the benefits package allocated to those in what Substance has dubbed "The $100,000 Club." More precisely, one in every four persons in Arne Duncan's "Central Office" would have been paid more than $100,000 per year at the time President Barack Obama announced, in December 2008, that Duncan would become U.S. Secretary of Education.

The title "Clout's Cesspool" came to Substance after two of our reporters listened to Chicago Mayor Richard M. Daley refer to the Chicago Public Schools prior to his takeover as a "cesspool." In July 2008, Daley hosted a City Hall press conference at which he announced that taxes for CPS would not be raised during the 2008-2009 school year. After the official presentation (which included remarks by Arne Duncan) Daley went off script in response to questions from reporters. He told the press that prior to its being reformed by his administration, Chicago's public school system had been a "cesspool."

Substance Budget Questions

As a result of the questions that were raised, in addition to reaffirming the numbers published both in the print publication of 'Clout's Cesspool' (October-November 2008 print Substance) and republished with additions on line (April 2009 Substance), Substance staff have begun researching through all the documents CPS produced during the years Arne Duncan served as CEO (July 2001 - January 2009). One such document, accompanying this article, shows a claim made at a press conference on June 6, 2006, announcing the proposed budget for the 2006-2007 school year in Chicago (Fiscal Year 2007, or FY 07).

One of the charts created for display and for TV news reports purported to show the decrease in central office during some of the Duncan years.

Had the chart been true, the cost of the 268 administrators earning $100,000 or more per year in June 2008 would have been impossible. The total cost of the top 268 non-school administrators at CPS during the final full year of the Duncan administration was more than a quarter of the the cost of "administration" (i.e., "Central Office") that supposedly had been cut "to the bone" by June 2006.



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