A Chicago Schools Project

CPS’ Projected FY2012 Budget Deficit

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The following note about the Chicago Public Schools (“CPS”) projected fiscal year (“FY”) 2012 budget deficit was previously posted on another website and was current as of May 31, 2011. The website restricts postings to 500 words and did not accommodate additional details or links to original sources provided here.

CPS claims it has a $700 million to over $800 million FY2012 budget deficit.

In February/March presentations, CPS gave four reasons for its deficit projection: ARRA fund loss ($260M), Education Job Funds ($104M), one time funds from reserves ($190M), and cost of living increases ($170M). This added up to $720M+.

The FY2011 CPS Budget projected ARRA funds at $301.9 million. CPS had hoped to receive Race to the Top funds ($55M). These funds are listed in the budget as “ARRA other miscellaneous federal grants.” This line has been reduced to $24 million. If these are real ARRA funds, too, then the deficit attributed to ARRA funds should be raised to about $284M.

CPS appropriated $106M, not $104M, to the Education Jobs fund line. How does CPS account for the extra $2M? CPS reported to the Audit Committee that it used $58.3M for FY11 but retained about $46M for FY2012. So why does CPS include the entire $104 million in the deficit figure instead of just $58.3M?

CPS is losing a fund balance of $190M, carried over from the previous year. But that doesn’t mean CPS has a zero fund balance, now. In November, CPS said it was replenishing its fund balance. In February, the Audit Committee reported the “FY2011 budget to actual remains on track” and “Risks of overspend offset by items with lower than budgeted expenditures.” February 2011, CPS had a General Education Fund (115) available balance of $332M. Last February 2010, CPS had $185M in available balances in this fund (Source: CPS). Several other fund balances are greater this year and one wonders whether CPS has been withholding resources that could have benefited students this school year. Although the amounts in available balances may not be the same thing as the unreserved fund balance, how do we know that the latter is zero?

CPS has projected $170M in cost of living increases plus unspecified potential operational cost increases. Why doesn’t CPS project its operational costs (i.e., new schools/consolidated/closed schools, and etc.)?

If late state payments contribute to the deficit, why doesn’t CPS specifically include this factor in the set of deficit drivers? How much does the state owe?

In addition to reporting dollar amounts for its deficit drivers, CPS should provide the dollar amounts for its deficit reducers, too. The FY2012 Budget Overview lists “Factors that Decrease the Deficit,” but it doesn’t put a dollar amount on any of them. How much is the TIF surplus? CPS said it was worth $90M (November). Catalyst reported it worth $50M (February). What are the bond restructuring benefits?

CPS should produce a financial table with FY2011 inputs (state, federal, local), costs, available balances, and including changes to the original budget against projected FY2012 inputs, costs, and projected carryover.



Written by chicagoschoolsproject

June 14, 2011 at 10:05 pm

Posted in CPS Budget Info

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