Chicago Schools Budget Hearings 2009:.. TIF 'surplus' could erase CPS 'deficit'... Budget must disclose TIF districts' costs to CPS
[The following remarks were provided by Jackson Potter to SubstanceNews from the notes he spoke from at the August 19, 2009, CPS budget hearing at the Black Magnet School in Chicago. Although CPS officials promised to provide Substance with the transcript of each night's hearing, they did not respond to phone calls reminding them of their promise by the end of the work day on August 21, 2009. Substance will provide our readers with a full report on all three budget hearings based on the transcripts when they are finally made available. For now, these interim reports are the best our friends can provide. George N. Schmidt, Editor, Substance].
Students from Julian and Robeson high schools had prepared a map of Chicago showing all of the TIF districts in time for the first budget hearing at Amundsen High School on August 17, 2009 (above). On each of the nights of the hearings, public questions about why the Board of Education wasn't demanding that the TIF surplus (estimated at more than $1 billion today, of which $600 million would go to CPS) was not going to the city's public schools, rather than remaining in what amounts to a slush fund controlled by Mayor Richard M. Daley. Questions about the Board of Education's conflicts of interest regarding TIF and many other issues were evaded all week by CPS officials with the usual reply being "We'll get back to you on that..." As of August 21, only one person had heard back from CPS officials. Substance photo by George N. Schmidt.Hi, my name is Jackson Potter, I'm a teacher at Social Justice High School and a member of the Caucus of Rank and File Educators (CORE). My understanding of your Power Point presentation is that you attribute the current FY2009-20010 budget deficit to 1) the refusal of the state of Illinois to properly fund educational programs in the city 2) the inability of the state of Illinois to pay what is owed to the Chicago Public Schools and 3) the medical and pension expenses of teachers and staff in the district. Is that correct so far? According to reporter Angela Caputo of Progress Illinois, the city's own documents released in June reveal that of the 150 TIF districts in Chicago, there was an approximately $1 billion surplus of unspent funds.
On August 21, 2009, Social Justice High School Teacher Jackson Potter (who serves as co-chair of CORE) raised again the question of the impact of the city's 150 Tax Increment Finance (TIF) districts on the CPS budget and the alleged "deficit." Like the others who asked about why CPS didn't lobby to get all the TIF dollars that would have gone to the schools (approximately $600 million) to offset the alleged deficit, Potter was told that CPS officials would "get back to you on that." Substance photo by George N. Schmidt.If this was redistributed to the neighborhoods, as it should have been, over 53 percent of those funds would have gone back into the schools. Now, i'm not a math teacher, but that is over $500 million that the schools would otherwise possess — turning a purported $61 million dollar deficit into a $440 million surplus.
Now you say that this budget is not attacking teacher pension and benefits. But you neglect to mention that a major revenue source is siphoning money away from the schools. Do you have any estimate on how much CPS has lost due to TIFs?
CPS Budget Director Christine Herzog claims that they don't know much about TIFs and that they aren't targeting, etc.
I reply that they are more than willing to look carefully at the deliquency of the state in making appropriate contributions to education, but blatantly refuse to look at the Mayor and the way in which his policies have underfunded the schools. Well, here is the problem with this analysis. You never bother to consider some revenue sources that would automatically make the deficit disappear. I mean — Wouldn't analyzing the way in which the city takes money away from the schools be a basic function of any real budget analysis? This proves that this deficit is designed to take more resources away from teachers and students throughout the system, not to find ways to ensure that our public schools are properly funded.
One more question You claim that the reserve — the savings that CPS banks for a rainy day — has fallen below the acceptable percentage of what the bond agencies require CPS to maintain. However these are the same bond agencies that gave Lehman Brothers a clean bill of health. We all know that municipal bonds and investments are some of the safest investments in the market. I'm certain that in this terrible economic climate the bond agencies would be more than willing to renegotiate the original terms of the board policy regarding our bond rating. Does the BOE have plans to revisit this policy in lieu of our new economic conditions?
Christine Herzog claimed they would discuss the matter but not review the policy.
