Education Policy Analyst delivers testimony at Chicago Public Schools Budget Hearing

Rodney Estvan, Access Living’s Education Policy Analyst, often testifies and delivers reports on disability issues as they relate to the Chicago Public Schools.
Each year, Rodney Estvan, Access Living’s Education Policy Analyst, delivers a report on the Chicago Public School’s budget in the context of special education outcomes, resources and spending. On August 10, 2011, the public schools hosted a public budget hearing at Lane Tech High School. Below is a transcript of the testimony delivered by Estvan.

Sarah Karp of the education magazine Catalyst covered the budget hearing. A link to the coverage is on the right. Also on the right are links to coverage of the CPS budget by the Chicago Tribune and the New York Times.

Statement Made at Chicago Public Schools Budget Hearing
August 10, 2011 Lane Tech High School
By Rodney D. Estvan M.Ed.

Access Living supports CPS decision to increase its property tax rate to fund schools. In the FY 2010 budget CPS limited the property tax increase to 1.5% instead of the legally allowable increase of 4.1%. In FY 2011 proposed budget the CPS did not increase the property tax rate at all.

The Property Tax Extension Limitation Act limits the increases in any one year of the tax rate CPS and other taxing bodies (35 ILCS 200/18-185). The law makes it clear that the annual tax increase for PTELL funds is limited to 5 percent or the rate of inflation whichever is less. So each year the cap is different and next year's cap will be lower than this year's cap. Chicago's property taxes are relatively low, the primary issue relating to property tax burdens in Chicago is the huge increases in values from the 1990s up to 2006 that have now run their course and have been declining for several years. The lower property taxes home owners in Chicago are paying compared to other Cook County towns are at the expense of CPS. We are dismayed that there are members of the City Council objecting to this increase given the history of cuts to educational programs schools have endured for years now.

We thought many of the problems CPS faces on the fiscal front were reasonably presented in the proposed budget, especially revenue issues and the problems CPS is facing in receiving payments from the State of Illinois. We thought the overall funding for special education was not sufficient. It will do nothing to improve the situation of students with disabilities in CPS who graduate in their overwhelming majority with few marketable skills and face lives of dependence on various forms of public assistance. But we are glad additional significant reductions were not made to the special education budget as we experienced in past years. We agree with much of what was written in the proposed budget on new fiscal accountability measures, especially to: "Shine sunlight on the budget so all can see what we are doing," (Budget page 10). But the FY12 proposed budget does not yet shed much sunlight in many areas.

For example, we disagree with a decision already made by the CPS Board of Education to increase its payments to the Chicago Police Department (CPD) for school patrol services covering 2009 through 2012. The original deal CPS made with the CPD and then Mayor Daley was to pay $32.8 million for these services. On July 27, 2011 CPS agreed to increase this budget to $102.8 million (see Board Report 11-0727-PR18). The CPS even agreed to make back payments to the CPD reported to be $46 million. CPS went from paying about $8 million a year to the CPD to $25.5 million with one vote. This decision added to the CPS's fiscal problems and did not have to be made because the intergovernmental agreement CPS made with the CPD under the Daley Administration did not provide for this cost escalation. This was wrong. The Chicago Public Schools should not have agreed to pay a higher rate for police services than it agreed to under Mayor Daley's administration.

Another problem is that one of the big cost reductions in the budget is a proposal to eliminate regions and create larger networks for middle management purposes, which purports to save $32 million (page ii of FY12 budget). The problem is that in the segment reports there are no new network budgets to compare to the areas budgets. All that exists in these reports are the budgets for the old areas and there can be no verification of the cost saving claims in this area.

Yet another problem is that the budget claims on page 248, in relation to its use of variable rate bonds and interest rate swaps, that "CPS only enters into transactions with a highly rated, credible and diverse group of counterparties." Unfortunately one of CPS's counterparties for a $95.3 million swap was Lehman Brothers, which filed for bankruptcy in 2008. The Chicago Public Schools’ claim here lacks some creditability.

We do not think that the proposed cuts in the area of Response to Intervention are a wise decision given the Illinois State Board of Education mandate in this area. Access Living would be happy to work with CPS in a lobbying effort to amend the existing regulations in this area to allow for more flexible implementation of Response to Intervention.

The last problem I have time to discuss is that the budget envisions additional spending reductions to be developed in the first quarter of FY 12 (Budget page 15). Leaving additional reductions unknown and hanging out there is not a good idea. It creates an apprehensive environment, which is not good.

Thank you

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