Have you heard the one about the 'one-time fix' that's been fixin' things for seven or ten years?... Chicago education officials again claim what they call a 'structural deficit'. What they mean is they are again refusing to raise taxes on the 'One percent' to pay for Chicago's schools

Every news organization in Chicago began trying, by the morning of July 3, 2014, to explain the latest Chicago Public Schools "budget" in which a "deficit" has once again disappeared, in which the mayor claims to have reduced "central office" by three quarters of a billion dollars in less than four years (!), and where the Big Bad Woilf at the door is always teachers' pensions.

Chicago Public Schools "Chief Executive Officer" Barbara Byrd Bennett has been in office for less than two years and knows little more about the massive CPS budget than the talking points she rehearses with the Board's "Communications" department before talking, reluctantly and never in person, with the city's press corps. Byrd Bennett's predecessors have been Jean-Claude Brizard (2011 - 2012), Terry Mazany (interim, 2010 - 2011), Ron Huberman (2009 - 2010), and Arne Duncan (2001 - 2009). The school system's financial affairs has likewise been subject to what critics call "Management Musical Chairs" since the beginning of the 21st Century. Substance photo by David Vance. And so, for the tenth time in ten years, budget officials and the "Chief Executive Officer" of the nation's third largest school system put on their Chicken Little costumes and assured members of the press that Chicago Public Schools faces a "structural deficit." That, they refuse to define in any serious way, resorting to convoluted explanations about "accounting rules" and so-called "one-time fixes" that keep happening year after year.

The one thing that's been consistent since before September 11 is the claim that the culprits are (a) the Chicago Teachers Pension Fund and (b) Illinois state officials.

-- Not the refusal of Chicago to find ways to pay for its public schools.

The teacher pensions of Chicago are to blame for the so-called "structural deficit" because Chicago promised to pay pensions when teachers retire, but is now trying to create a "pension crisis" by refusing to pay for them.

The State of Illinois is to blame because, according to CPS officials, Illinois should be paying lots more for Chicago's public schools.

The current Chicago Public Schools "Chief Financial Officer" is Ginger Ostro, who had been serving as budget director prior to her promotion at the May 2014 Board meeting. Above, Ostro answers questions at the April 2014 Board meeting. Substance photo by George N. Schmidt.Left out of the narrative, as usual, is the fact that Chicago taxes are now among the lowest in the Chicago area. That leaves every unit of government in the city facing austerity claims by the mayor and most of those who report reality through the media. Even the Civic Federation, which usually sides with the mayor's version of reality, has published a major repor ton how low Chicago taxes are by comparison with the majority of the city's suburbs.

But the fact is that CPS officials are refusing, as they have for the entire Century, to consider local sources of revenue to improve the finances of the city's public schools. That would ease or even erase what they continue calling that "structural deficit."

The Chicago Board of Education is supposed to reveal its proposed budget for the next fiscal year before the last one ends, and hold public hearings on that proposed budget before the Board of Education votes to make that budget a final budget. But the Board met on June 25, 2014 and nobody in the administration even mentioned the Fiscal 2015 budget, which is supposed to go from July 1, 2014 through June 30, 2015. In fact, at the time the five members of the Board were holding their June 25, 2014 meeting, the Board's most recent "Chief Financial Officer" has left, to be replaced by another one, the fifth or sixth in seven or eight years. And for reasons that she was never asked to explain at the June 25 Board meeting, the most recent "Chief Executive Officer" of the nation's third largest school system, Barbara Byrd Bennett, failed to mention the budget throughout the entire June 25 meeting of her Board.

And so the FY 2014 budget expired on June 30, 2014 and the Board, once again, entered its new fiscal year with a patchwork (which was buried in the 300-page agenda for the June 25 meeting).


Two days into the new fiscal year, CPS "Communications" officials called some (not all) reporters and news organizations to announce, breathlessly, that they would be holding a semi-secret press briefing by telephone to explain all that budget stuff. No TV cameras. No face-to-face questions. And by invitation only, and that a half hour before everyrone was supposed to call in and ask questions, sort of. (Disclosure: Substance was not told about the secret briefing, but learned about it and participated). Admittedly, the CPS officials trying to conduct the briefing on the largest single education budget in the Midwest were challenged. The latest "Chief Financial Officer" has only been in office less than two months (although she was "Budget Chief" for a time before that). The former "Chief Financial Officer" had disappeared (as had his five most recent predecessors). The other top budget official, the "Controller," has been in office one week. The "Chief Executive Officer" has been in power less than two years. And the Communications people who try to manipulate the press corp of Chicago with talking points are also rookies.

Peter Rodgers (above, in October 2012) served less than two years as "Chief Financial Officer" of Chicago Public Schools. Before coming to CPS for his brief term, Rodgers had been a corporate executive. The Chicago Board of Education accepted his resignation in May 2014. Substance photo by George N. Schmidt.So when the questions got specific, it was no surprise that nobody could really answer them, and the two people doing the most talking -- the latest Chief Executive Officer Barbara Byrd Bennett and the latest Chief Financial Officer Ginger Ostro -- just kept circling back to their two talking points, trying desperately to maintain message discipline about $6 billion in public money and the education of more than 400,000 children.

"The structural deficit is caused by the pension crisis..."

They repeated.

"The structural deficit is all the fault of Springfield," they intoned.

The churning of executives in the top ranks of Chicago's public schools has not yet been seen as a scandal by the city's corporate media or pundits. But a relevant comparison is with the stability in the Chicago Teachers Union, which has emerged as the best informed critic of the churning and of the incompetence that has resulted in the management of the nation's third largest school system.

And so, as soon as they learned that CPS was holding a secret press briefing about its latest version of the budget and "structural deficit," the union's leaders issued a brief press release. That stated:

July 2, 2014. Regarding the New CPS Budget

CHICAGO The Chicago Teachers Union today released the following statement regarding the Chicago Public Schools briefing with reporters on the school budget for the new fiscal year:

Two months after Karen Lewis became President of the Chicago Teachers Union, then-Chief Financial Officer Diana Ferguson (above) chaired the annual budget hearings. Above, Ferguson is seen sitting at Lane Technical High School, where one of the hearings was held (on August 21, 2010). in answer to most questions from citizens about the $5 billion budget, Ferguson and her staff told people "We will get back to you on that" -- and never did. The same verbal dodge continues into the summer of 2014, but there have been three CFOs since Ferguson, and the Board of Education has also gutted the mid-level technical staff who once held up what was left of the integrity of CPS financial materials. Substance photo by George N. Schmidt. CTU has not seen the full CPS budget prior to its briefing with reporters this afternoon and therefore we have not fully analyzed any information theyve released in advance of any such presentation to its teachers and other school personnel. The one part of the budget that we are aware of is the per-student funding formula which we believe is too low and continues to starve schools of resources. This puts our principals in situations where they have to decide whether to fire veteran teachers or cut vital programs such as art, music, library, vocational training and world languages.

The Chicago Teachers Union will release a more critical analysis of the new budget after weve had time to study their plan and determine if it helps move our district into the 21st Century where every child has access to an equitable and high-quality education.

Left out of the CTU release is that the union has been under the same leadership for four brief years, while the school board has churned its way through four "Chief Financial Officers," four "Chief Executive Officers" and dozens of lesser executives, almost all of whom were installed at six-figure salaries without producing anything like educational experience or credentials. In addition to the churning of people, CPS has also begun a process of giving exotic titles to some of its executives.

America's third largest public school system, for example, is the only one to have had (briefly) a "Chief Portfolio Officer." The human resources head has "rebranded" her department three times since Karen Lewis and the CTU leadership took office on July 1, 2014. Alicia Winckler is currently known as the "Chief Talent Officer", but in previous iterations, she was "Chief Human Resources Officer" and "Chief Human Capital Officer."

CPS also at the present time sports a "Chief Officer for Innovation and Incubation" and a "Chief Transformation Officer." All of those people came to the education side of things from corporate America. The most significant credential needed to be a highly paid executive in Chicago's public school system today is an MBA. Even the "Chief of Security and Safety" was hired mainly because she has a business degree. Prior to her taking office since Rahm Emanuel became mayor, she had no experience in PreK - 12 education.

By August 19, 2010, Diana Ferguson had called on two substitutes to do the budget hearing held at Corliss High School. Above, Melanie Shaker (center) and Christina Herzog (right) non-answer questions about the FY 2011 budget, which CPS officials assured the public was facing problems because of a "structural deficit" and the perils of the pensions. Shaker left CPS by 2013. Herzog by 2014 became the longest-serving to ranking CPS budget official, although she was no longer employed by CPS. Herzog by July 2014 was a $100,000 per year consultant who appears regularly at the Board of Education meetings and is expected to try and help the current crop of rookie budget people during the July 2014 budget hearings. Substance photo by George N. Schmidt.One of the ways in which CPS keeps some of its financial information straight after having purged the ranks of specialists in the central office budget offices. Several offices are required to maintain the financial affairs of a school system serving 400,000 children, with more than 40,000 regular workers and a large number of people working in the charter schools off the regular books. Because of the CPS purges of necessary technical workers and specialists (under the guise of "reducing central office"), CPS winds up paying consultants, some of whom are former employees, six-figure consultant deals to maintain some of the necessary work within the financial offices. Among these are Buzz Sawyer and Christina Herzog, both of whom once worked full-time for CPS and who now serve as consultants.


July 3, 2014 at 4:33 PM

By: Rod Estvan

the supreme court ruling and the pension fix

In its decision today in Kanerva vs. Weems the Illinois Supreme Court clearly ruled that health care for retired teachers in the TRS were covered under the IL constitution writing: "article XIII, section 5, its plain and ordinary meaning, all of these benefits, including subsidized health care, must be considered to be benefits of membership in a pension or retirement system of the State and, therefore, within that provisions protections." I will admit I was surprised, especially because Republican justices totally supported protecting the benefits. But after all judges too get public retirement benefits.

Clearly this ruling will apply to retired CPS teachers. So a big part of any "reform" of retiree benefits has been taken off the table. Other aspects of benefits may also be protected including cost of living increases, but additional litigation relating to those issues are pending.

CPS needs to change its narrative, because trying to balance future budgets on reductions to retirees benefits may not be an option. The CTU has put forward several proposals which would be hard to pass to generate revenue. The idea of going beyond the current property tax cap is not popular at all with Chicagoans, but could happen.

CPS may have to impose severe austerity on schools to keep the ship upright, that would have to include imposing it on charter schools some of which might go bankrupt. I am glad for retirees whose earned benefits are being protected, but the future is very cloudy.

Because non-retired teachers are not protected I expect yet a new wave of retirements statewide. Getting out while the getting is good is not a bad idea, but its very bad for students.

CPS and Mayor Emanuel put all of their eggs in reducing pension benefits and their gambit may just have failed. Its time to think about taxes, including a few CTU suggested even though to be honest they would be really difficult to enact.

But then again the cynic in me says if CPS does nothing and lets the school district fiscally collapse then they can try the Detroit bankruptcy card to get out from all of this. Its not at all clear the school district's creditors would go along with such a plan because its their money too and the courts in Illinois are not those of Michigan either. The future is going to be both scary and interesting.

Rod Estvan

Rod Estvan

July 3, 2014 at 5:16 PM

By: George N. Schmidt

Crying 'Wolf!' -- or 'Detroit!' -- has to end for Chicago...

The notion that Rahm Emanuel or any other loyal servant of the plutocracy might try to deliberately bankrupt a city as solvent and wealthy as Chicago -- or Chicago's public school district -- is outrageous even given Rahm's penchants and plutocratic puerilities. Not only the "narrative" about government spending, but the priorities now must change. The era of Grover Nordquist, Ayn Rand, and the sage of the bubble bath Alan Greenspan is clearly ending, even if the Obamas and Clintons and other disciples of the Atlas Shrugged version of reality are still firmly in political power.

For Chicago, it's worth remembering that Rahm's first flirtatious with power came at City Hall under Richard M. Daley and then during those dismal reactionary years at the White House during Bill Clinton. The vicious attacks on working class and poor people that Rahm helped facilitate from the 1990s onward include not only "pension reform," but "welfare reform" and "housing reform." The Big Three. The millions of children who have suffered and died since Rahm, the Clintons, Barack Obama, the Bushes and all those other reactionaries are now going to come forward to haunt the lies and the liars.

Only the Iraq debacle has been more murderous, but unlike the three "reforms," the Bush - Obama wars in Iraq killed people far from home. I'm thinking right now about Rahm's "Fuck You!" to anti-war protesters who went to his office when he was our Congressman (Illinois, 5th). Despite the fact that the majority of the voters and others in Rahm's Congressional District clearly opposed the invasion of Iraq and its murderous results, Rahm stood firmly on the side of the reactionaries. Now justice begins.

July 4, 2014 at 9:44 AM

By: John Kugler

You Never Know...

...with these assholes running city hall and the schools. The people I meet who are upper management are all from other bankrupt districts or cities. Either they cannot find another job or they are being hired to do a number on Chicago. Any Chicagoan that I talk to in CPS agrees that upper management in CPS has no idea what they are doing.

Take for example of the move to the new CPS headquarters. Instead of the logical move during the summer when schools are closed and things are slow. I here that the move will happen during the school year starting in November, when it will be the most disruptive. Go figure.


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