CPS Special Education Budget Report FY2011

ja vu REN2010ju va all oACCESS
LIVING
115 West Chicago Ave
Chicago, IL 60654
Rodney D . Estvan M .Ed .
Chicago Public Schools 2011 Budget Review

Special Education in the midst of fiscal Crisis
Tribune archive photo

A crowd of children
and the unemployed
marched to the office
of Chicago Public
Schools
Superintendent William
Bogan demanding free
food in March 1932
August
2010
21 Page
Introduction
This year's budget review is somewhat different than those done in previous years by
Access Living. Because of the very large impact of State of Illinois finances those issues are
discussed first with details relating to the CPS FY 2011 proposed budget coming latter .
Section I : FY 2011 Education Budget and the fiscal collapse of the State of Illinois page 3
This section discusses the actions or inactions of both the Illinois General Assembly and the Office of the
Governor in relation to education funding in Illinois . Its focus is on appropriations for special education
services .
Section II : Budget scenarios developed by CPS in response to the state fiscal crisis page 12
This section discusses numerous deficit estimates made by CPS from late 2009 up to June 2010 . We
discuss the problems the inaccuracies in these estimates made for CPS .
Section III : Deficit estimates as a bargaining tool page 27
This section discusses how the issues of downsizing of a work force is addressed in the business
management literature . It discusses how CPS ineffectively implemented the core principles of
performance management in relation to a layoff situation .
Section IV : Proposed FY 2011 budget page 25
This section discusses the CPS proposed budget as it relates to special education staffing in schools and
special education administration .
3IPage
Section V : Tax increment financing districts and the CPS budget page 30
The issue of TIFs and CPS budgets became important and publicly debated in the months leading up to
the CPS FY 2011 budget . The issue of TIFs and what money can be realized for CPS from TIF reform is
discussed in this section .
Section VI : CPS and property taxes page 35
This section discusses one of the most import sources of funding for public education in Chicago .
Section VII : Response to Intervention and CPS page 41
This section discusses CPS attempt to implement the Rtl process in the midst of a budget crisis
Recommendation relating to the FY 2011 proposed budget page 46
Appendix I and II
Section I : FY2011 Education

Budget and the fiscal collapse
of the State of Illinois
On February 22, 2010 the Civic Federation of Chicago issued a 103 page analysis of the fiscal situation of
the State . This analysis projected at least a $12 .8 billion state deficit for FY 2011 . The analysis drew dire
conclusions for the State unless taxes were increased significantly and numerous cuts were
implemented by the Illinois General Assembly .' The Civic Federation analysis was one in a long line of
reports anticipating a fiscal collapse in Illinois . The current fiscal crisis in Illinois is a culmination of many
1 Institute for Illinois Fiscal Sustainability at the Civic Federation (2010, Feb 22) "A Fiscal Rehabilitation Plan for the
State of Illinois ."
4IPage
years of fiscal problems exasperated by a revenue decline that was predicted for years . 2 While the
current crisis was predictable, its impact on education funding has been dramatic and harken back to
the days of the Great Depression . 3
The Chicago Public School's (CPS) FY 2011 budget is enormously impacted by funding from the State of
Illinois . CPS currently has about 54,000 students with disabilities enrolled in its many traditional, charter,
and contract schools . The pie chart below appears in the CPS FY 2010 budget book and shows the
.4
breakdown of where the school district's overall revenues come from
FY2011 All Funds Resource
For special education State revenue is even more important to the school district . The pie chart below
.5
shows approximately where CPS special education funding currently comes from
2
Among the vast evidence of foreknowledge for fiscal problems in Illinois is : Blagojevich, R . (2003, March 12)
"State of the State Address", Wheeler, C . N . (2003, November) "Illinois Budget Deficit & Revenue Structure"
h ttp ://illinoisissues-archive .uis .edu/papers/budget.html, Illinois Commission on Government Forecasting and
Accountability (2009, March) Monthly Briefing, and Quinn, P . (2009, March 18) "Cover letter to FY 2010 Budget ."
3 The CPS also makes this analogy in the FY 2011 budget at pdf page 14.
4 FY 2011 budget at page 63 print edition .
5 FY 2011 budget page 16 and 79 print edition .

1 5IPage
CPS Special Education Funding
The total FY2011 budget for CPS including for capital and debt payments is about $6 .4 billion . 6 The
Chicago Board of Education has historically been the city's second largest employer, with the federal
government being first .' CPS currently has around 54,000 students with disabilities, most of whom are
also living in poverty . The graph below was developed by CPS to show its enrollment of students with
disabilities over fifteen years . 8
Students with Disabilities by Year

70,000
60,000 51 .07
33,101 VIM 5S,05a
31QOa.
50 .000 48' x'
40,000
30,000
20,300
19,300
11
1994 1995 1996 1997 1)98 1999 2000 2001 2002 20C3 2004 2005 2006 2037 2008 2009
h ttp ://tigger .uic.edu /"'rramakri/Readings/Accounting-Profession/Chicago-largest%o20employers .htm
8
Duskey, D . (2010, May 10) "Letter to House Joint Resolution 24 Special Education Funding Task Force ."

6 1 P a g e
Students with disabilities that CPS enrolls are also on average more expensive than those other school
districts in Illinois educate . The graph below also developed by CPS depicts that reality .9
s6 .sss
94 of Students with IEPs by D sabiity Category ;
Hi3h- :ost disabilites tow-cost disabitit}

i
Atg Student Teacher Avg St sdent Teacher
Ratio 1 ;8 I R3tic 1 ;60
$12,242/stu lert I $1,406tstud en t
i
21 .9+6
1212%
80% ; 5 x
s .2' 3_6%
Sp¢ifirc .earn 0 sob Ccg itne Dub Eenotial Jisaa. iuti .rn Traumatic Bran injry'spcah/Lang Impair .
%A CPS All Other Districts
A critical difference between the current public funding crisis and what took place during the Great
Depression is there was no public education for significantly disabled students in Illinois during the last
great fiscal crisis the State of Illinois faced in the 1930s . In 1958, the Illinois Supreme Court held that
compulsory education laws did not apply to children with mental impairments . 10 The position adopted
by the Illinois Supreme Court reflected the reality of public education for students with disabilities in
Illinois before the passage on November 19, 1975, of Public Law 94-142 called the Education for All
Handicapped Children Act (EAHCA) of 1975 . When the law was reauthorized in 1990, it was renamed the
Individuals with Disabilities Education Act (IDEA) .
From 1975 to 2009, IDEA and its funding requirements on the states and local school districts were
generally accepted as beneficial to the nation, with most objectors being very conservative ." The impact
of the current fiscal crisis in Illinois has even caused groups of Democrats in the Illinois General Assembly
12
to call for dramatic cuts in special education . The Democratic Governor of Illinois proposed an initial
FY 2011 budget that dramatically reduced State funding for special education .
9 Ibid .
lo
Weber, Mark . (2002) Special Education Law and Litigation Treatise (Horsham, PA, LRP Publications, Inc . )
11
The best example of conservative objectors was Chester E . Finn, Jr (1996, February) " How Special is Special
Education?" The Thomas B . Fordham Institute .
12
Pallashch, A . M . (May 25, 2010) "Democrats propose $1 .3 billion in cuts to state budget" Chicago Sun-Times.
7 1 P a g e
Members of the Illinois General Assembly in the last session passed an unfunded mandates act which
did not exclude new special education rules and laws that might be required by the federal
reauthorization of IDEA . A Blue Ribbon Committee on Mandates was authorized by the Illinois General
Assembly and it solicited comments from school administrators on what mandates they would like to
see revoked, or modified . Several commentators suggested that all state special education rules that
went beyond the federal rules be revoked . Kathleen Hagstrom the principal of CPS's Walt Disney
Magnet School commented as follows :
In these times of dire budget deficits, I think that we should rethink Bilingual education and special
education . We simply cannot afford the additional costs of these initiatives . They need to be pared down
dramatically . The classroom teacher absorbs the majority of the special ed issues anyway . The self
13
contained students still will need a special environment .
The CPS, unlike all other school districts in Illinois, receives its funding from the State for special
education using what is called a block grant . In all other districts in the State over thirty percent of
State special education aid is allocated to districts based on a personnel-based formula, another quarter
based on a census-based type formula called "funding for children requiring special education services ."
About one-tenth of all State special education aid is allocated in support of students placed by districts
in nonpublic schools and special education transportation accounts for over one quarter of State aid .
Students with disabilities educated in orphanages and related housing options as well as extended
school year funds comprise the rest the complex funding mechanism . 14 CPS gets all of these funds in one
block grant and CPS has flexibility in the allocation of how these funds are used as long as they provide
services for students with disabilities . There is very little accountability for how CPS spends these funds .
The Chicago Block Grant, uses a methodology by which CPS is allocated funding for special education
programs through block grants based on proportions that were calculated in 1995 . The current block
grant funding mechanism is legally protected by the Corey H settlement Agreement . 15 However, even
with this funding mechanism under the protection of an agreement formally approved by a federal court
the Illinois State Board of Education (ISBE) at its January 14, 2010 meeting voted to reduce the CPS
special education funding allocation by $214 .5 million over a period of four years . 16 The ISBE discussed
this issue as follows :
Given the substantial impact on District 299 for these four programs alone, staff is recommending that the
Board seek a graduated change in the proportion and transition District 299 to a method based on actual
claims. Eliminating the block grants could help address the potentially differential cost component
between Chicago and the rest of the State . It would also be a step toward paying for specific services and
13
h ttp ://www .isbe .net/blu e ribbon/excel/mandates comments .xls
14
Parish, T (January 21, 2010) "DRAFT : Analysis of and Policy Alternatives for Special Education Funding in Illinois"
Paper prepared for Special Education Funding Task Force, p .9 .
is
Corey H Agreement with ISBE at paragraph 28.
16
ISBE (January 13-14, 2010) " Finance & Audit Committee Packet" p .9
8 1 P a g e
allowing the funding to follow the unique needs of individual students . However, creating a claim based
system for MCATs would take time to design and implement . Creating such a system would also increase
the administrative burden on both CPS and ISBE staff at a time when additional funding for staff is not
likely .
The CPS in order to defend its funding mobilized numerous special education advocacy organizations
including Access Living, Equip for Equality, Designs for Change, and the Family Resource Center on
17
Disabilities . The CPS and Plaintiffs counsel in the Corey H case also began to raise the issue of a
violation of the terms of the agreement . On February 18, 2010 the ISBE faced with both legal and
advocacy opposition to its proposed funding cuts for special education retreated and restored full
18
funding for the Chicago Block Grant in its proposed budget .
The threats to state funding for CPS special education programs did not end with ISBE effectively
backing off its attempt to end the Chicago Block Grant . These threats reemerged with legislation, Illinois
House Joint Resolution 24, that authorized the creation of a task force to study special education
funding reform in Illinois . This task force had pre-existed the fiscal crisis of the State and had operated
in obscurity producing no agreed upon conclusions . But with the failure of ISBE's attempt to change the
special education funding formula for CPS the task force took on new importance . As part of the HJR 24
task force the ISBE hired as facilitator Thomas B . Parrish, Ed .D ., a special education funding expert from
the American Institutes of Research . Dr. Parrish has written several different draft reports all of which
redistributed CPS special education funds to other areas of the state, in an attempt to achieve equitable
special education funding on a state wide basis with no new revenues being allocated . One draft report
supported reducing CPS funding by a high of $179 .5 million a year and a low of $137 .8 million a year, a
second draft report pegged the CPS reduction at a high of $156 .1 million and a low of $137 .8 million . 19
At this time it is unclear, what, if anything, the Illinois General Assembly would do with any
recommendation for special education funding reform this task force might make .
As we stated above special education funding for CPS and all other school district in Illinois was
dramatically reduced by Governor Quinn's proposed budget issued on March 10, 2010 . By line item
these budget recommendations can be seen in the Table below .
Program or FY 2010 Gov's FY 2011 proposed Difference

grant Appropriation
Autism Training and $100,000 $100,000 0
Technical Assistance
Blind/Dyslexic $816,600 $688,800 ($127,800)
Persons Reading
Program
17 Karp, S (January 29, 2010) "Proposed cuts to special education would hit hard in Chicago" Catalyst .
18 ISBE (February 18, 2010) " Agenda Topic: FY 2011 Budget Amendment " p . 8-2 .
19 Parish, T (January 21, 2010) "Draft Analysis of and Policy Alternatives for Special Education Funding in Illinois,"
Parish, T (June 25, 2010) " Draft Analysis of and Policy Alternatives for Special Education Funding in Illinois ."

9 1 P a g e
Children's Mental $2,700,000 $1,691,000 ($1,009,000)

Health Partnership
Disabled Student $459,600,000 $367,134,800 ($92,465,200)

Services/Material 14-
13.01 [commonly
called special ed .
personnel]
Disabled Student
Transportation
Reimbursement, 14
13.01(b)
Disabled Student $181,100,000 $156,146,400 ($24,953,600)
Tuition/Private
Tuition, 14-7 .02
Extraordinary Special
Education, 14-7 .02 .
[commonly called
Funding for Children
Requiring Sp Ed]
Special Education $120,000,000 $81,584,900
Reimbursement, 14-
7.03 [commonly
called Orphanage]
Visually Impaired/Ed $1,421,100 $1,198,600
Materials
Coordinating Unit,
14-11.01
Special Education -
Hold Harmless
Total $1,202,615,700 ($327,058,800)
$1,529,674,500
Special Education Funding in Governor's March 10, 2010 Budget
The proposed budget issued by the Governor's office was a rejection of a budget recommendation made
by ISBE on February 18, 2010 . The total funding recommended for FY2011 by the ISBE for the same
budget lines was $1,541,176,400 or $338 .6 million more than the budget proposed by the Governor . 20
Some of the line items relating to special education reduced by the Governor's proposed FY2011 budget
are considered to be "mandated categoricals ." On February 26, 2010 Christopher Koch, Illinois State
Superintendent of Education, sent a letter to the members of the Illinois General Assembly about the
Illinois State Board of Education's (ISBE) FY 2011 budget request . In this letter the Superintendent
stated :
The State has . . . ongoing maintenance of effort requirements for special education related spending that
is part of mandated categoricals pursuant to the federal Disabilities Education Act (IDEA) . For IDEA,
expenditures must be maintained at the level of the preceding year .
20 ISBE (Feb 18, 2010) Board Meeting Packet "Agenda Topic : FY 2011 Budget Amendment"
1 0 [Page
Access Living wrote the Governor a letter on April 2, 2010 discussing how the proposed budget placed
the current level of special education funding received by Illinois from the Federal government in
jeopardy . Access Living also advised the Governor that Illinois would "fail to meet the established test
for the US Department of Education granting a waiver" from the federal funding requirements for
21
special education called the maintenance of effort provisions of IDEA .
The outline of Governor's proposed budget was presented to the Illinois General Assembly on
March 10, 2010 . His speech to the legislature contained two major proposasl in addition to budget cuts .
The first was pension reform which the Governor stated would save "$300 million in the coming year --
and billions more in the years to come ." This proposal rapidly passed the Illinois General Assembly in the
22
form of Public Act 096-0889 . But the Governor also stated in this speech :
I think it is wrong - and short-sighted - to cut education funding . I do not believe that the people of
Illinois want our young children crammed into overcrowded classrooms . I do not believe the people of
Illinois want to see promising young students forced out of college . I do not believe the people of Illinois
want us to balance our budget today by sacrificing the future of a generation of children . So I am
challenging you today to consider a wise and responsible alternative to damaging cuts in education
funding . My alternative is a one percent income tax surcharge for education . That 1 percent will be
enough to restore our education budget to current levels - and allow us to get caught up on some of the
millions of dollars we owe to our public schools, community colleges and four-year universities . 23
The idea that the proposed budget could be revised dramatically for education spending if an income
tax increase was passed was rejected by the General Assembly and this rejection reflected the opinion
of Illinois voters . 24 On March 11 virtually all of the Governor's proposed cuts to special education were
included in the initial Illinois Senate Bill 3880 that went to the Senate Appropriations Committee . 25
During the 96th General Assembly increasing pressure was put on the legislature to fund special
education services in order to not violate the Federal maintenance of effort requirements . The ISBE
"had preliminary discussions with OSEP [Office of Special Education Programs of the USDOE] about
21 Bristo, M . (2010, April 2) "Letter to Governor Pat Quinn ."
22
Public Act 096-0889 which reformed pensions does not obligate the State of Illinois to provide any specific
proportion of the funding for the Chicago Teacher's Pension Fund . It does not provide any enforcement to the
commitment in Public Act 88-593 outlined a State contribution plan to help get the public pension system back on
track and bring the system back up to being 90% funded by 2045 .Under PA 096-0889 CPS is given a pension
payment holiday for CTPF until fiscal year 2014 . From 2014 and going on to 2059 CPS is required "to bring the
total assets of the Fund up to 90% of the total actuarial liabilities of the Fund ."
23
Quinn, P (2010, March 10) "FY 2011 State of Illinois Budget Address ."
24
In particular see the polling date in Leonard, C .W. (2010, June) " Results and Analysis of
The Inaugural Southern Illinois Poll" The Paul Simon Public Policy Institute Southern Illinois University Carbondale
25
96th General Assembly " Bill Status of SB3880"
11IPage
obtaining a one- time one year waiver from these spending requirements," following these discussions
26
ISBE did not file for a waiver .
One attempt to fill the funding gap for special education mandated catagoricals was Senate Bill 44 . SB 44
as it was introduced in January of 2009 had nothing what so ever to do with special education funding .
The basis for this increase revenue was a proposed one dollar a pack increased tax on cigarettes . The
receipts from this tax increase were initially dedicated to what was to be called Healthcare Provider
Relief Fund which was for the purpose of making reimbursements to providers of goods or services
under medical assistance programs for children . By April of 2010 additional recipients of these cigarette
tax dollar were added by amendments to the bill including all financially distressed health care providers
experiencing financial difficulties because of inadequate or untimely State funding . Then on May 4,
2010 the bill was legislatively gutted by amendment and all the cigarette tax dollars were rededicated to
27
"to be used solely for mandated categorical aid payments to school districts ." Even though the Speaker
of the House and the President of the Illinois Senate supported this amended bill not enough votes
were able to be secured to allow it to be called for a vote . 28
The Illinois General Assembly during its Spring 2010 session passed appropriation bills that used the
Governor's proposed March 2010 budget as its guideline . On May 27, 2010, the General Assembly
passed two bills, House Bill 859 and Senate Bill 1215, containing FY 2011 appropriations for ISBE . These
bills had several lump sum allocations and reduced overall ISBE appropriations compared to FY 2010 by
$478 .4 million . 29 The General Assembly did not provide enough money to meet the maintenance of
effort provisions of IDEA for the State of Illinois . The Illinois General Assembly also during the Spring
session passed what was called Emergency Budget Act .
According to an ISBE analysis and a presentation by the Governor, the Emergency Budget Act allowed
the Governor to make allocations from a $3 billion lump sum appropriation . The Governor used that
allocation to provide ISBE with $194 .1 million . The ISBE decided to use the Governor's lump sum
allocation to fund $171 .1 million for Early Childhood programs and $23 million of Bilingual programs
across the state . The ISBE elected to allocate funds from those that had been provided to ISBE by the
26
Illinois State Board of Education (2010, June 23-24) " Finance & Audit Committee Packet" p . 28 .
27 96th General Assembly " Bill Status of SB0044"
28 Illinois Association of School Boards (May 7, 2010) "Alliance Legislative Report 96-57 ."
29 The Governor's proposed FY 2011 budget allocated $367,134,800 for special education personnel
reimbursement where HB 859 appropriated $368,151,700 . The Governor's budget allocated $326,021,600 for
special education student transportation where HB 859 appropriated $357,096,600 . The Governor's budget
allocated $156,146,400 for special education private tuition payments where HB 859 appropriated $156,146,400 .
The Governor's budget allocated 268,049,600 for funding for 14-7 .02 where HB 859 appropriated $275,076,800 .
12IPage
General Assembly in lump sum form to cover the state's special education maintenance of effort
requirements .30 Effectively, on July 1, 2010 the state promised flat funding for state special education
31
reimbursements to CPS, however that promise was built on a shaky fiscal foundation .
Section II : Budget scenarios

developed by CPS in
Response to the State Fiscal
Crisis
3°
Office of the Governor of the State of Illinois (2010, July 1) "Archived Audio & Video of Press Conference" Illinois
State Board of Education (2010, June 23-24) " Finance & Audit Committee Packet" p .27 .
31
See the discussion in Illinois State Comptroller's Quarterly Edition 36 (2010, July) The Office of Daniel W . Hynes
State Comptroller.

131Page
In February 2010, CPS
CEO Huberman issued

what was called an "early
warning" on the looming
fiscal difficulties the CPS

was likely to face for FY
2011 . CPS began its press
release by stating :
After imposing a series of budget cuts and tough cost-containment actions that closed a $475 million
budget deficit in fiscal 2010, Chicago Public Schools face an FY 2011 shortfall that could run as high as
32
$900 million . . .
On the same day that CPS issued the press release on the projected $900 million deficit, CPS issued a
memo to all employees that broke down this projected deficit into four components that can be seen in
the Table below .
$200 million "The Illinois State Board of

Education is currently
projecting a $1 billion deficit .
As a rough estimate, CPS can
expect to absorb at least 20
percent, or $200 million, of
these state cuts ."
"The projected 2011 pension

payment for CPS is $587
million, a $279 million
increase from just last year .
All of the funding for these
increased pension costs
comes directly from CPS'
operating budget, the same
32
CPS Press Release ( 201 0, February 25) "Top CPS officials outline steps the District is taking to cope with its
financial challenges "
14IPage
fund that is used to buy

textbooks and pay for
salaries."
(a) : $135 million (a) " . . .for a 4 percent raise

per year as well as step and
lane increases ."
(b) : $34 million (b) : "healthcare and benefits
costs continue to rise"
(a) : $86 million (a) : "costs increase to

provide essential services,
such as food service and
(b) : $47 million transportation"
(b) "the amount that CPS
pays in debt service, which is
used to fund school
construction, additions and
critical repairs, will also
increase "
$781 million
CPS Deficit Estimate Feb 25, 2010 memo to CPS Staff
Using the data from the memo issued by Mr. Huberman the projected deficit was $781 million, which is
well below the high end estimate made at the start of the memo that stated CPS faced in FY 2011 an
"unprecedented $700-900 million budget deficit ." The high end overall estimate appeared to be inflated
by about 13% from the estimates made in the very same memo .33
According to a Chicago Tribune report, Mr . Huberman on February 25 in his oral budget presentation to
the media increased the budget reduction in state funding by $75 million going from the $200 million in
the memo to $275 million . The $200 million projected cut in state funding discussed in the memo does
not appear in the power point presentation given on February 25 . The relevant pages of the CPS power
point presentation can be found in appendix 1 . The presentation of the deficit in this power point begins
with a discussion of what CPS calls the per- pupil state funding gap, that is based on the Educational
Funding Advisory Board recommended per pupil funding for FY 2011 . The CPS in the presentation
indicates that there was a $1,873 per student funding gap between the recommended funding and the
actual state funding .
ISBE stated in a press release in January 2010 in relation to this issue :
33 All data used come from Huberman, R . (2010, February 25) Memo "to : All CPS Employees subject : State of the
Budget ." It should also be noted that by February 25, ISBE had already formally rescinded its proposed dramatic
cut to the CPS special education block grant .
151 P a g e
As part of the budget making process, the State Board directed staff to recalculate the Education Funding
Advisory Board's (EFAB) GSA Foundation Level for FY2011 . Using the methodology employed by EFAB, the
GSA Foundation Level recommendation would be $7,992, an increase of $1,873 per student over the FY
2010 GSA Foundation Level . The Board chose not to recommend adopting the EFAB level in their budget
recommendation because raising the GSA Foundation Level to this amount would require an increase to
the state's education budget of $3 billion ."
In FY 2010 the EFAB recommended per pupil funding per student that was $1,429 higher than the base
amount . 35 It was assumed by all districts in Illinois that the EFAB recommendation would be ignored and
all districts including CPS budgeted accordingly for FY2011, therefore we believe this aspect of the
presentation should not have legitimately been used as part of any increased CPS deficit estimate .
In the Table below we provide the cost driver estimates as they appeared in the power point
3s
presentation on February 25 .
(a) bilingual education $21 million

(b) early childhood education $14 million
(c) Pension contribution from state $33 million
$138 million
$279 million
$169 million including 4% salary increase, healthcare,
and step and lane increases
$86 million
$47 million
$787 million
CPS Power Point Deficit Numbers February 25, 2010
34 ISBE (2010, January 14) "State Board focuses on core agency mission by reallocating funds to maintain
foundation level"
ISBE (2009, January 27) " State Board recommends streamlined budget for FY 2010 ; Focus on core agency
35
mission"
36
Chicago Public Schools Author listed as "JK" file created 2/25/2010 power point . Title "FY201 1 Budget Forecast"
161 P a g e
If we compare the two tables we can see that CPS increased its deficit numbers in the press conference
power point presentation by $6 million as compared to the memo sent out to CPS staff the same day .
But the power point presentation also inappropriately increases the deficit by $33 million, because it
adds $33 million to the deficit from the state reduced reimbursement for pension contribution and adds
it again in CPS' required increase in payment to the pension . CPS cannot both count its deduction in
state payments for pensions and then again include this $33 million in the increased costs . So based on
this incorrect presentation of $33 million the actual deficit presented to the media on February 25 was
only $754 million .
The day after the memo to CPS staff was issued the Chicago Sun Times ran a story based on an interview
with Mr. Huberman where "a whopping $975 million deficit next school year" was depicted . 37
Then Mr . Huberman informed the reporter :
Without union concessions, more money from Springfield and pension relief, Huberman said, a "last case
. . . worst case scenario" would be bigger class sizes and teacher layoffs . Increasing class sizes by one
student, to a districtwide average of 31, would save $40 million and cost up to 600 teacher jobs,
Huberman said . Boosting class sizes to 45 would save $270 million, but Huberman conceded many
classrooms couldn't hold that many kids . The teachers union would have to sign off on a pay freeze or
furlough days, but increasing class size is an option CPS could exercise on its own . A relief value that
would require legislative but not union approval would be a $300 million reduction in next fiscal year's
pension payment -- a move Huberman insisted would still leave pensions adequately funded .
In neither the memo to CPS staff nor the power point presentation to the media do the numbers given
for the deficit actually add up to $900 million .
The CPS provided principals, the public and media with another budget presentation in March of 2010 .
CPS CEO Ron Huberman met with all principals and chief area officers on March 15 to tell them to
prepare for extensive budget cuts . 38 At this meeting the CPS gave a new power point presentation on
the deficit and budget reductions that would be required to offset this deficit . The power point
presentation in relation to the deficit, used three of the same slides as been used in the February 25
presentation .
37
Rossi, R . (2010, February 26) "More CPS job cuts as $975 million deficit looms" Chicago Sun-Times .
38
Karp, S . ( 2 01 0, March 15) "Coming to Chicago schools : 37 students in a class and other budget details" Catalyst
on line .
171Page
What is remarkable about the slide below is CPS adds $300 million on to a base deficit of $700 million,
but using the March deficit data the $700 plus deficit already included state budget cuts . What the $300
million figure reflected was the CPS estimate of the impact reductions in Governor Quinn's proposed
budget that was issued on March 10 and is discussed above . There is no analysis at all of how CPS
estimated that the yearly cost of the proposed budget would create an additional $300 million deficit .
The CPS effectively increased its projected budget deficit in less than one month from a range of $700 to
$900 million to $1 billion without providing the public with any breakdown of their analysis of the
increase . The list of budget reductions necessary to meet this new deficit estimate was staggering .
Below are
the proposed More State Cuts!
CPS budget
reductions
for schools in
the power
point
presentation .
Additional
State Cuts
$300 M .

18IPage
r
_ SC
_ HOOL-BASED ITEMS
Increase class size to 37 students per class (HS & Elem .) $ 160 M .
Cut in half supplemental resources for magnet, magnet cluster, $ 22 M .
Montessori, gifted and lB_Rrograms__ _,
Reduce Early Childhood Education programs _ $ 34 M .
Reduce Bilingual Education _programs 27 M .
Reduce District funded resources supporting full day
16 M .
_ kindergarten programs
Reduce discretionary funding at schools not eligible to receive
3 M.
Title I funding
Reduce positions not supported by student enrollment and

formulas, including :
27 M
ESP positions, quota positions, over-formula positions at
small schools, clerks, assistant principals
Cancel plans to expand Academic Enhancement programs 2 M.

Reduce operational support Including : security, maintenance 10 M .
TOTAL $ 301 M .
By April 14 the pension reform act, 096-0889, was fully approved and on April 20 CPS CEO Huberman
sent out to principals an update on the budget situation . In this memo Mr. Huberman wrote :
I want to give you a brief update regarding our current budget situation . At our last meeting, we
discussed that our deficit was between $700 million to $1 billion, depending on whether the Governor's
proposed $1 .3 billion in statewide education cuts, and $300 million in cuts specific to CPS, was
approved . As of right now, those cuts are still in the proposed budget . As you may know, the state
recently passed pension reform legislation, which provides $400 million in short-term pension relief to
CPS, along with enacting other long-term pension reforms . This legislation was critically important to CPS
in providing much needed financial relief . However, even with the passage of this legislation, CPS still
faces a $600 million shortfall . Of further concern, the state is currently late on $300 million in payments to
CPS and we are increasingly concerned the state will not honor its debts . If that occurs, it will add $300
million to next year's deficit . We continue to monitor this closely and advocate for the state to responsibly
pay its debts . 39
The deficit became $600 million, with a $300 million "wildcard ." Up to April the failure of the state to
make timely payments to CPS had not been emphasized in the various budget scenarios, after this point
it became a major theme and budget deficit driver in CPS budget presentations . This was not a created
39 Huberman, R . (2010, April 20) Memo to Principals

191 P a g e
scenario but reflected the reality that the State of Illinois simply could not pay its bills and this was
alarming to school districts across Illinois . 40 Special education funds were most impacted by delayed
payments .
In early May CPS and other school districts were confused as to what their situation would be for fiscal
FY 2011 . The Illinois Superintendent of Schools attempted to address these concerns in a message dated
May 11, 2010 :
Lawmakers left Springfield late last week without completing a new budget for FY 2011 . I understand your
frustration . My Board and I share it as well . There is much uncertainty surrounding everyone's budgeting
process as we continue to move forward in these difficult economic times, however, I believe that we will
see a completed budget before Memorial Day weekend, which would be sooner than previous years . I
have received e-mails and calls from a number of you wondering what the budget will look like in its final
form . I can't say . Currently, there are several scenarios in play, as there have been all spring, ranging from
the Board's proposed level funding, to the Governor's reduction of $1.3 billion to anything in between .
My staff and I remain in contact with legislators and their staff, as well as staff representing Governor
Quinn . We will continue to advocate for maintaining the General State Aid (GSA) Foundation level at its
current $6,119, as well as maintaining the current level of funding for Mandated Categoricals (MCAT) . We
will make GSA and MCAT runs available to you as soon as possible after receiving final figures .
Additionally, as soon as we know funding levels for our grant funded programs we will be able to get you
a clearer picture of how they will also be impacted . I know that your frustration is compounded by the
backlog of payments owed to districts . Currently, the Comptroller's office has a backlog of more than
27,000 ISBE vouchers totaling nearly $1 .4 billion . This will likely continue to grow as we get closer to the
41
end of the fiscal year .
On Friday June 11, very late in the day CPS made a formal legally required announcement that it was
calling a "special" meeting of its Board for Tuesday June 15 . There were only four items on the agenda
for this meeting . One of these was titled : "Policy Regarding Class Size ." (The relevant section of this
policy change authorizing an increase in class sizes to 35 students is reproduced . )
40 Banchero, S ( 2010, March 14) "Schools are more anxious than usual this year" Chicago Tribune .
41
ISBE (2010, May 11) "Message From State Superintendent Christopher A . Koch"

20IPage
CPS class size policy change 10-0615-POI FINAL
V. SPECIAL EDUCATION
The caw am in special education classes shall be in accordance with the guidelines
established by the Board in "Guidelines for Special Education Programs' and the Rules and
ROW'akxboftheState AoadotEducation
Access Living spoke in
". ADMOMSTRATIVEDISCRETIONEIEXCEPTIONA`CIRCUMSTANCES
oppo sition to this policy
The Chief Executive OIBcer or Chief Financial Officer are authorized to permit deviations from
change at the June 15, 2010 ode policy where circumstances in the judgment of either of Own require It
Board meeting 42 We stated Vg. PROCEDURES FORMOWFYINOCLASS SIZEPOLICY

PO`ICY
Prior to Board adoption of any amendments to Oft policy altering the don am provisions
that increasing the average contained herein, notice and an opportunity to mad and confer regarding the alterations will
be provided to to Chicago Teachers Union at legal 45 calendar days prior to
size of classrooms increased implementtion .
pressure on general education TO s FOR THE 2010-11 AND 201141

VP
teachers who are often
The Board has concluded OW 6VAN be unabletobalance its budad in the 2010 .2011 Food
required to modify curriculum
for students with disabilities in eliminate or sioniltcandy reduce anddoated amasses in labor cost This Orgy
ydwrwwiscreated by incrrna labor costs. antkdceted been in revenue from the Sat
these classrooms and to ofIllinois and the United States oovernn ant and current and anticioaed non0ewnent and
lateosymad of amla by the State of Boots . The Board antidcetes that this Mwhde
exlesay wIa continue a less thrash the end of the 2011-2012 Fiery Yea .
improve the academic skills of
for Ohe toneookn raaeona&inthe event that labor gonad modificationswe notachieved
these students . Access Living g0orthe Board does not withhold contractual wage or saav increasessufficient to avbli
expressed concern over this hereby delegates tothe Chief Executive OMcer the authority e;
(1) pmaaae class sloes to us a 36 students at some a alletarnsnterv schoof

pressure forcing some lehele(kYderaartah . orknarv . intamsdias and uooa oradeall arid in 41
students with disabilities into
AOL
segregated educational (2) jncnsescawsizes to uc o to 36 students at some or all high schools tweli
l~ess,.rs~hway back remedial, honors. advanced olacementorarm combination
settings and reversing positive jbamo•and In all Hind School sublacts (wx*dkna but not Handed M Eaatish,
MathemaUce. Foreign Lanoune. Business. General Science ScwK2
trends the CPS has
experienced over the last ten For aeaaate sandal education classesand enrollment of students with disabilities . cot
Chief ExecutiveOfficer shall establish saes aims consistent with 111004 State Board of
Education Rules and Regulations concerning class site for students with disabilities .
years . CPS informed the Sun
have class sites moms of 35. Me Chief Executive Officer
Times that 2,700 teachers .m~in`thme~Oeedx
w s sswelevel
would be laid off as a result of

the class size increase, which 4
would create a savings of $125

43
million . The CPS Board
unanimously approved giving the CEO the authority to increase class sizes to offset the projected budget
deficit .
Chicago Board of Education also approved a resolution to borrow up to $800 million to pay outstanding
44
bills and cover payroll costs to the end of the fiscal year . The resolution stated the reason CPS was
required to borrow against future property tax income was because of "delays in payments" from the
42
Estvan, R . (2010, June 15) "Access Living of Chicago Opposes CPS Amending its Current Policy on Class Size"
43
Rossi, R . (2010, June 12) "CPS to borrow $800M, boost teacher pay 4%" Chicago Sun Times.
44 Chicago Public Schools (2010, June 15) Board Resolution 10-0615-RS3 .

211 P a g e
State . During the public discussion period of the June 15 Board meeting CEO Huberman stated that the
current estimated deficit was $427 million .
Thirteen days following the CPS Board's approval of a resolution allowing for a dramatic increase in class
sizes the CPS CEO rescinded all proposed class size increases for elementary schools and reduced the
proposed class size increase for high school classroom from 35 down to 33 4 5 The class room teacher
layoff estimate was reduced from 2,700 down to about 1,2004 6 The CPS June 28 press release
announcing this rescission in class size increases stated a change took place in the CPS budget situation
and it was explained as follows :
Restoration of a limited amount of state funds will allow Chicago Public Schools to save enough teaching
positions to restore board-funded full-day kindergarten programs throughout the District and avoid
elementary school class size increases . The announcement by CPS Chief Executive Officer Ron Huberman
follows action by the Illinois State Board of Education and the Governor to restore approximately $57
million in categorical funds . Those funds combined with the District's continuing efforts at reducing
expenses, finding efficiencies and drastically reducing programs will lower CPS's expected FY 2011 deficit
from a projected $427 million to a projected $370 million . . .
With this new deficit estimate of $370 million, CPS had reduced it estimated budget deficit from about $1
billion in March of 2010 to only $370 million by the end of June . This would indicate CPS's March budget
deficit estimate was $630 million too high . This estimation error would equal about 12% of the full CPS
FY 2010 operating budget of $5.3 billion .
Based on the International Public Sector Accounting Standards (IPSAS) the use of budget estimates for
public entities must above all serve the following purposes :
(1) Relevant to the decision-making needs of users

(2) Reliable
(3) Represent faithfully the financial position, financial performance and cash flows of the public
entity 47
Clearly the CPS budget estimates from January 2010 up to early June 2010 were not reliable and it
would appear that the high budget estimates used by CPS were of little use to the CPS budget office
because required classroom teacher layoffs were over estimated by a factor of 55%4 8
45
Chicago Public Schools (2010, June 28) Press release : "CPS Able to Restore Some Projected Program Cuts"
46
The layoff proposal by June 23 also included laying off teachers who had received an unsatisfactory performance
rating first rather than following seniority rules as established under the CTU contract . Ahmed, A (2010, June 23)
"CPS chief wants to lay off worst teachers first" Chicago Tribune .
47 Deloitte Accountants (2010, February, 1) "2010 Edition IPSAS Summary"
48
Original teacher layoff estimate of 2,700 reduced to 1,200 indicates estimate was 1,500 too high or 55% of the
original estimate .
22IPage
Section III : Deficit Estimates

as a bargaining tool
In the context of performance management, the management path CPS has chosen to go down, staff
reductions have to be part of a planning purpose . Aubrey C . Daniels, is a clinical psychologist and is often
called "the father of performance management ." He was one of the first business management experts
to make extensive use of the science of behavior analysis in business . One of Dr . Daniels contributions to
this field of business management was in what has become called "right sizing ." 49 Dr . Daniels on his blog
discusses the TV show 30 Rock, where the lead character Liz is required to lay off 10% of her staff . Dr .
Daniels in his comment on the show states the lead character needed to bring the employees into the
so
process by asking for concessions to save co-workers j obs .
The CPS from January through June 2010 attempted to get its unionized employees involved in a
solution to the budget deficit, as Dr . Daniels suggested, but the actual downsizing goal was murky and
changing based on changing deficit estimates . In the business world reducing staff would be made on
an estimation of the demand of the market for a product or service, this estimation is sometimes done
by linear regression analysis combined with what is called situational analysis of the current state of the
economy . The CPS began to attempt to create the employee buy in for its solution without having a
firm grasp on overall fiscal situation and what the budget deficit would
be . The Mayor of Chicago as early as March also began
49 Daniels, A .C . (1991) "Successful Rightsizing : The Organizational Challenge of the 90s,", Performance
Management Magazine .
50
http ://aubreydanielsblog .com/category/downsizing / Dr. Daniels writes on his blog : "When Liz must reduce staff
by 10 percent, the entire staff tries to please her to avoid being laid off and Liz ultimately bases her decisions on
irrelevant factors, such as firing a romantic rival . By indiscriminately firing employees, the remaining employees
will likely wonder if they are next and develop a distrust of management . There will also now be more work for
fewer people, potentially leading to lower office morale and productivity . What to do instead : Rather than
allowing employees to try to sway her firing decision, Liz should have gotten all employees involved in a solution as
a first step to avoiding a layoff, such as eliminating wasteful expenses or taking salary cuts or furlough days ."
23IPage
to campaign for unionized CPS employees to make

51
concessions .
CPS made a significant public relations effort to

convince Chicago's media that the only budget solution
for the school district to prevent class size increases
would have to involve Chicago Teacher's Union (CTU)
members giving up a contractually agreed upon salary
increase or facing a layoff of several thousand
classroom teachers . This effort was very effective in
that both the editorial boards of the Chicago Sun Times
and Chicago Tribune urged teachers to forgo salary increases . 5'
There is no evidence that significant numbers of teachers bought into CPS's attempt to apply Dr . Daniels
theory of having employees agree to salary cuts or furlough days from January through early June . In
fact the vast majority of CPS teacher's elected a new union leadership on June 11, 2010 that ran in part
on a platform of no concessions . 53 On July 28, CPS released to CPS employees its proposal for ;
concessions .54 CPS asked CTU employees to give up more than the contractually agreed upon 4% salary
increase for FY 2011 that has been discussed in the media, it is asked that it be given up for each of two
school years to retain fewer than 1,000 teaching positions for only FY 2011 . The proposal did not
guarantee that any teachers jobs would be preserved in FY 2012, even though the CTU was required to
51
Spielman, F . (2010, March 22) "Daley to Chicago Teachers Union : Only shared sacrifice can avert drastic budget
cuts" Chicago Sun Times.
52
Chicago Sun Times Editorial (2010, June 9) "Teacher salary cuts the best answer here ." Chicago Tribune Editorial
(2010, June 17) "The 4 percent solution ."
53
Schmidt, G . (2010, June 12) "CORE, led by Karen Lewis, wins CTU election in landslide, with Lewis defeating
Marilyn Stewart 12,080 to 8,326" Substance.
54
Huberman, R . (2010, July 28) "Letter to CPS employees ."
241 P age
agree to concessions for FY 2012 . ss On August 11, 2010 the CTU's House of Delegates voted
56
unanimously to reject concessions proposals from the Board of Education .
Dr. Daniels has discussed the role of the buy in to leadership by employees extensively . In one interview
he stated : "We're saying that the behavior of the follower provides a mirror for the leader's
effectiveness . In other words, you can consider yourself honest and know in your heart that you are, but
if your followers don't think so, you have a problem . i57
On top of the changing budget deficit figures from January to June 2010 many more issues appeared .
Among them was the fact CPS had lost its Board President to a suicide that may have been onset by
discovery of misuse of CPS funds ; 58 the Mayor of Chicago's nephew attempted to gain enrollment in a
CPS selective enrollment school outside of the official process school for children of donors to a local
Democratic Party ward organization ; 59 the CPS CEO was publicly accused in the media of being
duplicitous in asking teachers to make salary concessions when he and other key CPS administrators
received raises ; 60 and a parent group publicly began to question CPS on its role in relation to lost
property tax revenues for City of Chicago approved tax incentive financing districts . 61 Finally, the US
Congress passed the education jobs fund bill in August which could provide CPS with about $80 million
to fund teaching positions 62
ss
One of the more shocking aspects of the proposal was the estimate in it of the cash value of CPS teachers giving
up the 4% salary increase where it was listed as "$80 million ." on June 28, CPS stated in a press release that the 4%
concession was worth $135 million . In the FY 2011 proposed budget the salary increase for teachers is listed as
being worth $142 million .
56
Chicago Teachers Union (2010, August 12) "House of Delegates Votes "No" to Concessions"
h ttp ://www .ctunet .co m
57 The Gazette (Montreal) (February 13, 2006) "If you're going to be a great leader, you need followers "
58 Fusco, C, Spielman, F, Main, F . and Novak, T . (2010, January 31) "Michael Scott's suicide came as meeting on
expenses loomed ." Chicago Sun Times .
59 Ahmed, A and Lighty, T (2010, March 25) "Daley's nephew appears on schools VIP list" Chicago Tribune.
60
Joravsky, B . ( 2010 April 1) "Do as We Say, Not as We Do" The Reader . CPS responded to this article with a press
release on April 5, 2010 titled :"CPS Officials Correct Recent News Report of CPS Budget Facts"
61
See h ttp ://ilraiseyourhand .org/
62
WBEZ radio (2010, August 11) " Federal Bill Gives CPS Cash to Prevent Layoffs"
http ://www.chicagopublicradio .org/Content.aspx?audiolD=43717&ut m source=feedburner&utm_medium=feed&utm ca
251Page
Many CPS teachers came to believe the CPS and its Board were at least less than honest about the
overall fiscal situation of CPS and effectively one of the foundational pillars of the performance
management approach to leadership during a downsizing process collapsed .
Section IV Proposed FY
2011 budget
The FY2011 budget increases funding directed towards special education services by $7 .4 million . CPS
increases in appropriations devoted to special education were completely driven by an increase in
Federal dollars going to CPS of $8 .7 million . Special education appropriations coming from the State and
local resources declined by $1 .14 million ."
In the last 15 fiscal years, special education appropriations have grown by $429 .3 million or 93% . 64 In FY
2011 special education expenditures will compose 15 .73% of non capital appropriations ; in FY 96 special
education composed 17 .19% of non-capital budget appropriations . 65 In real dollars CPS special
education appropriations have grown from $460,125,000 in FY1996 to $889,466,000 in FY2011 . During
the same time, the total non-capital budget for CPS has grown from $2 .7 billion to $5 .6 billion or 107% .
In his budget letter introducing the FY2011 budget, the Chicago Public School Chief Executive Officer
Ron Huberman discussed the budget stating it was "an extraordinarily challenging and tumultuous time
for Chicago Public Schools ." CPS balanced its FY2011 budget by using $190 million from its reserve fund,
utilizing federal stimulus dollars, using changes in pension funding rules passed by the General
Assembly, radically reducing CPS central office and citywide positions, reducing capital spending,
reducing transportation services, imposing furlough days on administrative employees, and reducing
66
school based positions .
mpaign=Feed%3A+cpreducation+%28Chicago+Public+Media+-+Education%29
63
FY 2011 budget pdf pages 47-49 online edition .
64
The primary driver of this increase in cost has been compensation of staff and cost related to privately placed
students .
65
FY1997 budget at page 56 where FY 96 budget is discussed .
66
See FY 2011 budget pages 9-11 print edition .
26IPage
Access Living has noted in previous reviews of CPS budgets, that the Chicago Board of Education should
re-establish a budget or audit subcommittee . On July 26th 1995, the Board suspended its own rule
requiring a standing budget committee . The Board we believed needed to have a standing finance
oversight or audit committee, just as publicly held corporations do . The CPS is one of the largest
employers in Illinois and its fiscal issues are extremely complex, requiring budget or audit committee
meetings that are subject to our state's Open Meetings Act . Decisions such as utilizing the stabilization
fund or defining a fiscal emergency should be discussed publicly in a budget committee and then
brought to the full Board for final approval . The CPS has finally agreed to re-establish a budget audit
committee of the Board and we are pleased to see that development . 67
The average CPS teacher's salary, according to the Illinois State Board of Education, has gone from
$53,238 in 2002, to $74,839 in 2008, and back down to $67,589 in 2009 . This was the case even though
the average CPS teacher in 2002 had 13 .9 years of teaching experience and 12 .7 years by 2009 . As
experience has gone down, the percentage of teachers with graduate degrees has gone up . By 2009,
59 .4% of CPS teachers had graduate degrees whereas in 2002 only 43 .8% held graduate degrees . 68 From
FY98 to FY10 the total amount of compensation for all special education staff working in traditional CPS
elementary and high schools steadily rose . 69 In FY 2011 the total amount of compensation for all special
education staff working in traditional CPS elementary and high schools was projected to be
$521 .7million or $ 6 .3 million more than in FY 2010 .
The FY2010 budget also stated CPS had fewer teachers than in FY09 . From FY09 to FY2010 there was a
3 .4% decline in "teacher class positions .i70 According to the budget, there were 916 fewer teaching
positions . In FY 2011 CPS projected again to have fewer teachers with another decline of 6 .1% in total
teaching positions . 71 The FY 2011 reduction reflected the many layoffs the CPS approved along with class
size increases at the high school level .
From FY08 to FY 11 CPS experienced an overall decline of 2,141 teaching positions . 72 This represents
about a 9 .3% reduction in CPS classroom teachers in a period of three years . The CPS FY 2011 budget
presented a table (reproduced below) looking at position changes in CPS from FY 09 to what was
projected for FY 11 .
67 See CPS rule 10-0728-RU1 .
68 ISBE District Report Cards 2002 and 2009 .
69 These compensation figures are based on elementary and high school based compensation figures in the reports
contained in the respective CPS budgets for appropriation by fund category "special education ." Staff included
both certified and non certified positions .
70 FY 2010 Budget page 68 (print version) .
71 FY 2011 budget page 89 print edition .
72 In FY08 CPS had 23,128 teaching positions and in FY 11 CPS projected having 20,987 such positions .

271Page
CPS All Positions by Location
Budgeted Location FY2009 FY2010 FY2011 FYI t vs F111 vs

FV10 FY09
Teachers 22,798 22,074 20,987 (1,087) (1,811)
Assistant Principals 698 751 649 (102) (49)
Principals 610 588 578 (10) (32)
School Support Personnel 13,860 13,471 13,180 (291) (680)
School Based Positions Total 37,966 36,884 35,394 (1,490) (2,572)
Area-O ice School Support 181 194 305 111 124
Citywide Student Support 3,675 3,556 2,994 (562) (631)
Central-Office Personnel 1,569 1,448 1,231 (217) (338)
Total Positions 43,391 42,082 39,924 (2,158) (3,467)
Using the data in this table and using FY 2009 as a base line, we can see CPS projects reducing in
traditional schools positions in FY 2011 by 6 .7%. CPS projects reducing central office positions by 21 .5%
and Citywide support staff by 18 .5% . The staffing reductions in traditional schools are to a degree offset
by increased costs for tuition payments to charter and contract schools as the number of students
attending these schools continue to grow .73 CPS projects in the FY 2011 budget that the number of CPS
students attending charter and contract schools will grow to 44,636 from 36,389 in FY 2010 .74 Using the
FY 2009 through FY 2010 budgets we are able to estimate the growth of tuition payments to charter and
contract schools . This growth can be seen in the table below .
Year Tuition payments to charter and contract schools

in millions
FY 2009 $304 .5
FY 2010 $342 .5
FY 2011 $376.3
In FY 2011 CPS projects having a total enrollment of 410,000 students .' s This represents a projected
increase of about 1,429 students from the enrollment in FY 2010 . Given that CPS projects an increase of
8,247 students in charter and contract schools from FY 2010, it can be inferred that CPS is also
projecting a 6,818 student enrollment contraction in traditional schools . In FY 2011 students attending
charter and contract schools will represent 10 .9% of total CPS enrollment .
73 However CPS reduced its funding for charter schools in the FY 2011 budget .
74 FY 2011 budget page 94 print edition .

281 Page
The FY 2011 budget give projected enrollments for all CPS charter and contract schools including for the
percentage of students with disabilities . 76 Using this data we were able to determine that CPS projects
for FY 2011 that out of 44,636 charter and contract school students 4,918 would have disabilities or
about 11%, This compares to the district wide average of about 13% for traditional schools .
In April 2009 Access Living released its report Renaissance

2010 and Students with Disabilities . Access Living found that
charters and contract schools as a group were no more
effective in teaching students with disabilities than the
average CPS school . Using data for charter schools and
contract schools from June 2008 we can see that in about
three years these schools went from having 1,216 students
with disabilities to the projected enrollment of 4,918 . While
the numbers of students with disabilities in these schools
increased by over three thousand the percentage of
students with disabilities in these schools has increased by
one percent going from 10% in 2008 to a projected 11% in
2009 .
Specialized Services Unit 11670 contained charter schools

support services staff, which consisted of 22 CPS special
education teachers who were CPS employees assigned full
time to various charter schools . The projected to cost in FY
2010 for just these 22 teachers was $1 .7 million . According
the last Renaissance 2010 RFP the CPS policy of providing CPS employees who certified special
education teachers to charter schools is ending and all reimbursement to charters for these teachers will
be done on a per-teacher basis the formula for which can be found in the FY 2010 budget at page 97 . 77
All 22 of these positions were eliminated in the FY2011 budget . In total in the FY 2011 budget 67
positions were eliminated from unit 11670, including all city wide home hospital teachers . In citywide
special education unit 11675 a total of 41 .5 additional positions were eliminated . Including 20 school
psychologists, all behavioral disability specialists, all members of the CPS positive behavioral
intervention program, and 11 school nurses . CPS added 24 staff to a new early childhood special
education unit . 78
The CPS central office unit for special education, unit 11610, was reduced by seven to a total of only 37
staff . This unit in FY96 had 120 positions; in the FY09 budget it had only 46 positions . By FY 2010 this
unit had 44 positions . With the reduction to 37 positions this unit has been reduced since FY96 by 83
76 FY 2011 budget pages 281-311 print edition .
77 Renaissance 2010 RFP (May 2009) page 18 .
78 FY 2011 budget CD-room files "school support units all funds"

291Page
positions or 69% . Historically, some of the functions of this unit have been relocated to regional offices
and citywide units . These citywide units have now also been significantly reduced .
The CPS FY 2011 budget states that CPS decreased citywide staff for the entire system by 562 positions,
of these 21% or 118 .5 were in special education citywide units . Access Living believes since overall
special education expenditures currently compose about 16% of non capital appropriations that the level
of cuts being imposed on special education citywide
programs are excessive even in the midst of a fiscal crisis .
The FY 2011 budget states CPS was projected to have 3,356

in FY 2011 CPS
special education teachers in traditional CPS schools . 79
Access Living was informed by the CPS budget office last reduced special
year that none of the 916 teaching positions the FY2010 education teachers in
budget indicated were eliminated were held by what it traditional schools by
broadly defined as special education teachers . According to a total of 31 .4
CPS there were a total of three additional special education positions.
teaching positions . The budget office on August 20, 2009
informed Access Living that the total number of special
education teaching positions in CPS including charters and
contract schools for FY2010 was projected to be 3,653 . 80
Access Living and CPS went back and forth attempting to balance the number of special education
teachers it totaled and what appeared in the CPS Oracle reports . We never completely agreed on a
special education teacher total for the start of the FY 2010 school year but CPS did provide using the
capture date of October 23, 2009 a total . The CPS at that time had 3,515 .3 special education teaching
positions in traditional schools . 8 '
This would indicate that using the 2009 number and the projected FY 2011 number that CPS has cut
169 .3 special education teaching positions . However, based on Access Living's criticism of how CPS was
broadly defining "special education teachers" in schools CPS has tightened its definition attempting to
conform with definitions established Special Education Personnel reimbursement program that is
authorized under Section 14-13 .01 of the School Code .82 Hence we do not believe CPS have reduced
that many special education teaching positions in schools .
79 FY2011 budget at page 16 print edition .
80Communication from CPS budget to R. Estvan 8/20/09

81
Estvan, R . (2009, November) "Chicago Public School 2010 Budget Review including discussion of ARRA funds and
new anti-violence initiative" Access Living of Chicago . page 11 .
82
See Access Living letter to CPS in Appendix 2 .
301 P a g e
To determine the position reductions we examined the CPS Oracle reports for the primary school based
units 19092, 19096, 19097, and 19098 in relation to "special education teachers ." Using this data we
conclude in FY 2011 that CPS reduced special education teachers in traditional schools by a total of 31 .4
positions . CPS added 19 positions at the elementary school level, reduced positions in high schools and
vocational schools, and eliminated positions in the special schools by the closing of one school .
The issue of positions relating to possible reductions in special education aides and other special
education classroom based support staff is far more complex than for special education teachers
because of the many different job titles used by CPS . As best as we can determine the number of
classroom aides of various types increased significantly in traditional schools by over 300 positions 8 3
The only category we could detect a decline in was in the job category of "child welfare attendant ."
Based on this increase in aides we would say that CPS has now restored almost all of the 745 special
education aide positions CPS cut in June 2006 . 84
As best as we can
determine the number of
classroom aides of various
types increased
significantly in traditional
schools by over 300
positions .
Section V Tax increment

financing districts and the
CPS Budget
83 These include bus aides and other aide types .

84
Estvan, R . (2006, June 20) "Chicago Public Schools FY 07 budget" Access Living of Chicago page 5 . About 400
positions were restored during the course of the FY 07 school year.
311 P a g e
The issue of property tax dollars lost to the Chicago Public Schools has become a big issue during the
current CPS budget cycle . Ben Joravsky who reports for the Chicago Reader has been the city's leading
voice questioning the loss of dollars to CPS because of TIF districts . Tax increment financing and money
lost to schools is a major topic on the web site of Progress Illinois . The newly elected leadership of the
Chicago Teachers Union has criticized money lost to CPS from TIF districts in Chicago . 85 A parent group in
Chicago called Raise Your Hand (pictured at a protest meeting this Spring), has criticized TIFs as taking
money away from schools 86
85 CTU
President Karen G .J . Lewis "Important Message from the President" http ://www .ctunet .com/ July 2010
message
86
Clauss, H . (2010, July 9) "CPS Parents Hammer Daley, Huberman on Tax Increment Financing" WBEZ Radio
32IPage
This issue is
not simple,
and the truth
is that TIFs
have been
used in
Chicago to
fund
rehabilitation
of schools to
make them
accessible to
students,
teachers, and
community members who have mobility related disabilities .87 New schools were also built using TIF
revenues, one such project currently underway is the Back of the Yards Area High School (pictured
above) which generated some conflict between alderman whose wards crossed the TIF district used to
88
fund the project
But as Mr . Joravsky has argued :
Roughly half the new tax revenue that flows into TIF districts would otherwise have gone to the schools .
In essence CPS is giving up at least $250 million a year and then, to compensate, raising taxes, cutting
programs for students, and begging Daley to give some of the money back . For example, from 2007
through 2013 about $1 .5 billion in property tax money that would have gone to the schools will instead be
diverted into TIF accounts . Through the Modern Schools program, the mayor has promised to spend
about $600 million on school construction and rehab . In short, they give him a dime and he gives them a
nickel . Only a chump would consider this a good deal . 89
TIFs exist because of State law . Illinois' Tax Increment Allocation Redevelopment Act .90 Simply this Act
authorizes that TIF funds may be used for : The administration of a TIF redevelopment project . Property
87 CPS has allocated millions for ADA projects that are in part funded with bond proceeds following from TIF
districts . See CPS FY 2010 budget at pages 310 and 311 .
88
Joravsky, B . ( 2010, June 03) "Learning to Say No" The Reader.
89 Joravsky B. (2010,June 03 ) "Learning to Say No" The Chicago Reader
90 65 ILCS 5/11-74 .4-1 through 11-74 .4-11

331 Page
acquisition . Rehabilitation or renovation of existing public or private buildings . Construction of public

works or improvements . Job training . Relocation . Financing costs, including interest assistance . Studies,
surveys and plans . Marketing sites within the TIF . Professional services, such as architectural,
engineering, legal, and financial planning .
The state law as it currently exists is in part because of an extremely powerful lobbying organization
called the Illinois Tax Increment Association (ITIA) . Among the Board members of ITIA are Mayor of
Chicago, Philip R . McKenna, President Kane, McKenna & Associates, lead partners of several important
law firms, mayors or village board presidents of 14 other Illinois towns, and officers from the Investment
Banking sector . There is no representation of school districts on the board of this body ." The ITIA
explains the theory of TIFs to the public this way :
When a TIF redevelopment project area (often called a TIF district) is created, the value of the property
in the area is established as the "base" amount . The property taxes paid on this base amount continue
to go to the various taxing bodies as they always had, with the amount of this revenue declining only if
the base declines (something that the TIF is expected to keep from happening) or the tax rate goes down .
It is the growth of the value of the property over the base that generates the tax increment . This
increment is collected into a special fund (the Special Tax Increment Allocation Fund) for use by the
municipality to make additional investments in the TIF project area . This reinvestment generates
additional growth in property value, which results in even more revenue growth for reinvestment .
It is the growth in revenue based on an increase in the value of the property over the base that CPS loses
in the creation of a TIF district . According to the 2009 CPS Comprehensive Annual Financial Report there
were about 160 TIF districts within the taxing area of CPS . 92 When each of these TIF districts were
created the CPS had a seat on the Joint Review Board for each of these TIF districts, there is no record of
CPS objecting to the creation of any of these TIF districts . CPS does not have veto power in the Joint
Review Board process . Moreover, Joint Review Board decisions according to the Act : "shall be an
advisory, non -binding recommendation . The recommendation shall be adopted by a majority of those
members present and voting. The recommendations shall be submitted to the municipality within 30
days after convening of the board ."
The CPS however does have the legal right to defend its tax base against the creation or continuation of
a TIF district within its taxing area . , Oak Park and River Forest High School District 200 did just that in
February 2010 suing the Village of Oak Park over loss of property tax dollars from Greater Mall Tax
Increment Redevelopment Area which was being extended beyond its original life of 23 years . 93
91 www .illinois-tif.com/board .as p
92
At pages 120-123 .
93
Oak Park and River Forest High School District No . 200 v. Village of Oak Park Circuit Court Of Cook County case
no . 10CH0759 .
341 P a g e
CPS cannot, just get out, of existing TIFs state law as does not provide for an individual taxing body such
as CPS within a municipality to unilaterally exit a TIF and take their money without litigation . Illinois TIF
law allows a TIF district to exist for a maximum of 23 years, which can be extended by legislative action .
Any TIF district in the City of Chicago may be terminated earlier if all financial obligations are paid-off
and the Chicago City Council votes to terminate the district . Since 1977, when Tax Increment Financing
was enacted, about 30 TIF districts in Illinois have been voluntarily terminated by their municipal
sponsors .
Aside from litigation there is the possibility that excess funds currently in Chicago's TIF districts could
legally be returned to CPS . Oak Forest, in 2009 released surplus TIF funds to Bremen Community School
District 228, Arbor Park School District 145, Oak Forest Park District and Acorn Library . These bodies
received tax funds from improved property within the city's TIF district along 159th Street and Central
Avenue . Aldermen approved paying out $142,769, the amount of incremental increase in property taxes
received for 2007 .Orland Park took much the same action in March 2009, as did Chicago Heights in
February 2009 . 94 Legally the Chicago City Council could release millions of dollars of surplus funds to CPS
immediately.
According to the City of Chicago in 2009 158 TIF districts inside of Chicago had unspent revenue from
previous years that were not required for debt service . Using the City of Chicago's own information it is
possible to estimate that about $343 million would be available to be released to the various taxing
bodies within the City of Chicago .95 Based on the current distribution of property tax dollars within the
City of Chicago, the CPS would under any release program be eligible for about 50% of these funds or
about $171 .5 million on a one time basis . 96 The Chicago Sun Times provided another estimate of City TIF
fund balances using a of Deloitte & Touche audit that indicated at the end of 2009 there was $1 .162
billion in "uncommitted" TIF funds, using this figure there would be $581 million that could be made
available to CPS on a one time basis . 97 A story in the Tribune that ran the day following the Sun Times
story indicated that a more current TIF fund balance might have about $350 million in uncommitted TIF
funds that could be made available to CPS on a one time basis . 98
94 Illinois Association of School Boards (2009, September) "School Board News Bulletin"
h ttp ://www.iasb .com/bulletin/nbO909 .cf m
95
City of Chicago Department of Community Development (2009, May) "Tax Increment Financing Program
Overview."
96
It is impossible to estimate what the level of unused funds in TIFs would be on a yearly basis .
97 Spielman, F . (2010, July 29) "Empty pockets : City has $27 million" Chicago Sun Times .
98
Byrne, J (2010, July 31) " Daley studying budget options very carefully" Chicago Tribune . This article stated that
the City of Chicago's share of unused TIF funds would be $140 million with other taxing bodies including CPS being
eligible to receive up to $560 million for a grand total of $700 million . Hence CPS would be eligible for 50% of that
total or about $350 million .
35IPage
In the Illinois General Assembly SB 1990, sponsored by Sen . Michael Noland (D-Elgin) in 2009, would
have imposed requirements for an annual TIF project budget and goals review by a locally chosen panel
of citizens. It would have required any annual revenue in excess of the budget for a TIF project area
would have to be returned to the affected taxing districts each year, including school d istricts . S B 1990
would have further provided that the redevelopment project areas for a TIF would have to be approved
by a majority vote of each county board and the governing authorities of the other overlying taxing
districts, including school d istricts . S B 1990 was effectively blocked in 2009 by the powerful TIF lobbying
group ITIA and could not get out of the Revenue Subcommittee on Property Taxes whose chairman was
Senator James Meeks .
The Chicago Public Schools belong to the Illinois Association of School Boards (IASB) and Dr . Tariq Butt a
member of the CPS Board of Education is an officer of that organization ." The IASB has gone on record
as supporting the recommendations of Government Finance Officers Association (GFOA) on the use of
loo
TIFs . One of GFOA's recommendations reads :
The economic benefit to the local economy, the fiscal impacts to the affected government(s), and
overlapping tax entities, such as school districts, and the economic cost of TIF district incentives should
be analyzed and subjected to various sensitivity analyses .
Neither Dr. Butt nor any member of the CPS Board of Education has ever requested any type of fiscal
impact study on any proposed TIF within the taxing limits of CPS . However, surprisingly the CPS FY 2011
budget states : "
Section VI : CPS and Propeity

Taxes
CPS has increased its tax levy from 1995 to 2010 many times, however the actual rate of taxes going to
education has declined . Property taxes in Cook County are more complex than in any other county in the
State and the Civic Federation wrote a 43 page report attempting to explain the county's complex
°'
process .'
In the FY 2010 budget CPS chose to limit the property tax increase to 1 .5% instead of the legally
102
allowable increase of 4 .1% . The limited tax increase meant an $18 increase on a typical Chicago home
99 h ttp ://iasb .com/whatis/officers .cfm
100
h ttp ://www .gfoa .org/downloads/tifsjan2006finalclean .pd f
101
The Civic Federation (2010, April 5) "THE COOK COUNTY PROPERTY ASSESSMENT PROCESS ."
102
Mr. Huberman in a letter accompanying the FY 2010 budget stated the reason for limiting the tax increase was
because of economic "challenges" taxpayers were facing in the economic downturn .
36I P a g e
valued at $262,000 which was less than the $77 increase the system could have assessed by taxing to
the maximum allowed, according to Mr . Huberman . 103 This was surprising because most observers of
104
CPS had assumed CPS would be required to tax to the limit to stay solvent . But by October 2009,
105
when property tax bills were sent to homeowners, it became clear why CPS did not tax to the limit .
Lawmakers in the State General Assembly, in 2004 imposed caps on runaway tax assessments during the
real estate boom and in 2007 voted to gradually do away with the protections created a situation where
some of the poorest city neighborhoods would experience huge property tax increases of 30% .
In FY 2011 proposed budget the CPS did not increase the property tax rate at all as the Mayor had
106 Property tax revenues are projected to decline by $144 .9 million .
requested .
In order to understand what follows We are going to provide a very simple explanation of this process .
Illinois state statute requires that all real property be valued for the purpose of property taxation at 33
1/3% of its fair cash value in every county except Cook . Cook County is the only county in the State of
Illinois that sets different property tax assessment levels for different types of property. Cook County
has 5 different major classifications of property and 8 "incentive classes ." Therefore, in Chicago real
property is valued for the purpose of property taxation at many different percentages of their fair cash
values .
Once the Cook County Assessor has estimated the full market value of a property, the class specific
percentage "level of assessment" is applied to that value to produce the assessed value . In the City of
Chicago assessed values have grown a great deal . This assessed value is then equalized and exemptions
are applied . The State of Illinois Department of Revenue is responsible for calculating an equalization
factor which is used in the math that creates what is called equalized assessed value or EAV for each
piece of property in Chicago .
There have historically been two types of so called tax caps . The first was Property Tax Extension
Limitation Act which limited the increases in any one year of the tax rate CPS and other taxing bodies (35
ILCS 200/18-185) . 107 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 . CPS states that the current CPI is "well under 1% .i 108 In
June 2010 according to U .S . Bureau of Labor Statistics / Division of Consumer Prices and Price Indexes
103
Rossi R . and Spielman F (August 11, 2009) Chicago Sun Times .
104
See for example Sadovi, C. (March 12, 2009) "Chicago School leaders say tax hike is likely" Chicago Tribune.
105
Secter, B (October 27, 2009) "Double-digit property tax increases in city, Cook County, suburbs" Chicago
Tribune .
106
This is discussed in the section of this report on property taxes .
107
See Illinois Department of Revenue (2007, December) "Property Tax Extension Limitation Law Technical
Manual ."
108
Ibid .
37IPage
the rate for the preceding 12 months was 1 .1% . 109 Hence according to the rule CPS could might be able
to raise its rate by 1 .1% of the current rate of $2 .43 per $100 of EAV, which would be about 3e . CPS
applies a tax rate on each $100 of EAV of the properties located in the city of Chicago . This rate is
expressed in dollars . In FY 2009 the education tax rate in the city of Chicago inclusive of the Public
Building Commission and CPS was $2 .472 per $100 EAV . So a home with an EAV of $100,000 would be
paying for education in property taxes about $2,472 .00 a year .
For a home with an EAV of $100,000 an increase of 30 would be an increase of about $30 a year which
llo
would be offset by a decrease in tax levy for the Public Building Commission . In 2008 the total EAV for
CPS was $80 .97 billion, assuming the numbers have not dropped dramatically the 34 increase would net
CPS around $24 million ."
The second cap is a Reassessment Tax Cap which was designed to limit property tax increases resulting
from reassessment for Illinois homeowners . Governor Quinn on August 1st signed SB3638, a property
tax relief bill that renewed a tax cap on property values . limiting the increase in the taxable value of
112
homes to 7 percent a year .
The Chart below shows the history of the total educational tax rate for CPS from 1996 to 2009 ."
109
USLB (2010, July 26) "Consumer Price Index Summary"
110
FY2011 budget page p . 70 print edition .
111
CPS Comprehensive Annual Financial Report June 30, 2009 page 115 .
112
Office of the Mayor (2010, August 1) Press Release .
113
The tax rate data comes from CPS Comprehensive Annual Financial Reports June 30, 2003, June 30, 2005, and
June 30, 2009 . The total rate for 2008 listed in the 2009 CAFR is in error it is listed as $2 .583 it should be $2 .727 .
See h ttp ://www .cps .edu/Abou t CPS/Financial information/Documents/OS 2009A .pdf at page 64 .
38I P a g e
CPS Total School Direct Tax Rate per

$100 EAV
$5 .00
$4 .00
$3 .00
$2 .00 ∎ CPS Total School Direct

Tax Rate per $100 EAV
$1 .00
$-
~0 N 00 0, 0 ri N m -cr 11, .O N 00 0,
o, o, O, a 0 0 0 0 0 0 0 0 0 0
rn c o o, 0 0 0 0 0 0 0 0 0 0
-l -l r-I r-I N N N N N N N N N N
The chart above to most citizens of Chicago would appear to make no sense what so ever . Because
except for three years CPS has opted to increase the property tax levy to the maximum amount allowed
by the tax cap law every year since FY1997 . Only in FY2009 when CPS held its property tax levy flat, in
FY1999 when CPS levied less than the maximum, and again in 2010 when CPS levied less than the
maximum amount allowed . The reason these CPS increases have not added up to much in relation to
the total direct tax rate is they are presented to the public as a percentage of the prior year's rate .
For example in 2010 when CPS raised its property tax rate by 1 .5% it was effectively going from $2 .426
per $100 EAV to $2 .466 or 41 per $100 EAV . If we look at the total direct school tax rate going from FY08
to FY 09 we can see the part of that total tax rate going to the "worker's and unemployment
compensation/Tort immunity fund" declined from 0 .191 to 0 .031 per $100 EAV or 161 . Moreover, the
rate for the Public Building Commission dropped from 0 .016 in FY 08 to 0 .015 in FY 09 or 1/101 . So
effectively CPS' FY 2010 increase was more than absorbed by the decline in the overall rate in FY 09 .
CPS is required to file its annual tax levy with the Cook County Clerk, the clerk uses the assessment base
for CPS if the rate applied to the base exceeds any statutory rate limit the clerk reduces the rate and
applies the maximum rate allowable . Tax rates are calculated by using the amount of dollars levied by
CPS and the value of all taxable property located within its boundaries covered by CPS . The Cook County
114
Clerk in the graph below shows the distribution of property tax dollars for the City of Chicago in 2008 .
114
Cook County Clerk (2009, October 20) "2008 Tax Rates Released ."
http ://www .cookcountyclerk .com/tsd/DocumentLibrary/2008TaxRates .pdf

3 9 JPage
Distribution of Tax Dollars to Taxing Agencies

Typical Taxpayer M City of Chicago
Choago Lbrry Fund Ch~ Park David

212% 0.71%
City of C%0 00 ^uch-I Bkdg &

Imp- Fond
2 .43%
Bore of 00000wn
51 .33%
TAX YEAR 2008
Using data from the Cook County Clerk for 2008 we can compare the CPS tax rate to other school
districts in Cook County educating students in various towns .
Town/Village Total school rate including high school and

elementary per $100 EAV in FY 2009
Chicago $2 .472
Evanston $8 .207
Elgin $7 .782
Elmwood Park $6 .763
Hinsdale $6 .330
Skokie $8 .130

40I P age
A Chicago home in FY 2009 with an EAV of $100,000 will be paying $2,472 a year for education, but a
house in Evanston with the same EAV will be paying for schooling $8,207 a year . Currently there is a
Chicago home for sale in the Blaine Elementary School intake area in the city for $1 .2 million built in
2003 its 2008 tax bill was $14,748 . There is also a home in Evanston for sale for $1 .1 million built in 2003
with about the same square footage as the Chicago home, in 2008 the taxes on this home was $18,085 a
115 The primary variable in the tax between these two homes are the differences between the tax
year .
rate for schools .
Because Chicago is so big its smaller rate can realize millions upon millions of dollars . The chart below
116
developed by the Civic Federation shows total CPS budget property tax revenue from FY 06 to FY 10 .
CPS Budgeted PropertyTax Revenue forAll Funds : FY2006- FY2010

(in $ millions)
$2,500.0
$2,076.9
$2,000 .0
51,843.0
$1,8225
$1,748.3
$1,678.7
$1,500 .0
$1.000 .0
$500 .0
FY2006 FY2007 FY2008 FY2009 FY2010

S-: CPS P opos.dB.d9.%FY1OOe-FY2010 .
The CPS in the FY 2011 budget projectes a decline in property tax revenue and budgeted only $1 .932 .0
million for property tax income . 117 This was the first actual decline in property tax revenue in recent
history .
115
Comparison was done using Trulia real estate search .
116
Civic Federation (2009, August 25) "Chicago Public Schools FY 2010 Recommended Budget Analysis and
Recommendations" page 33 .
117
FY 2011 budget at page 64 print edition .
411 P a g e
In this budget cycle the Mayor had repeatedly expressed his opposition to any property tax increases .
At one point several newspapers quoted the Mayor as stating : "You can't raise real estate taxes . People
can't even pay 'em today . That's the difficulty . I'm just telling you ."
The Mayor's opposition to property tax increases, along with a significant budget shortfall led to a
significant downgrading of the City of Chicago's bond ratings in August . 118
Chicago's property taxes are relatively low, the primary issue

relating to property tax burdens in Chicago are the huge
increases in values from the 1990s up to 2006 that have now
run their course and have been declining for several years .
119
The lower property taxes home owners in Chicago are
paying compared to other Cook County towns are at the
expense of CPS.
Section VII : Response to

Intervention and CPS
The FY 2011 budget contains a discussion of CPS implementation of the Response to Intervention (Rtl)
framework . CPS is required by Illinois 'special education rules to use an Rtl process as
118
Hines, G (2010, August 6) "Chicago's bond rating suffers second downgrade this week" Crains .
119
S&P/Case-Shiller Home Price Indices indicate a 27 .7% decline in Chicago areas home values from the peak in
September 2006 . Condominium prices are down from their peak 20 .4% .
42I P a g e
part of the evaluation procedures to identify students with learning disabilities in the 2010-2011 school
year . The CPS was required to develop a RtI plan January 1, 2009 for transitioning to the use of an Rtl
process, including identification of the resources to be used in implementing the plan . The CPS failed to
develop such a plan in keeping with the time line and the CPS Board did not pass a resolution
120
authorizing that such a plan be developed and implemented until July 28, 2010 .
The CPS discusses this student intervention system as follows :
In addition to focusing on teacher quality, in FY2011 CPS will invest in efforts to increase
student performance through the Response to Intervention (Rtl) Framework . Rtl is a
framework for continuous improvement that is based on the principle that all children
can learn . The Rtl framework utilizes a multi-tiered approach to intervention as well as
scientific, research-based educational resources (e .g ., curricula), high quality
instructional practices, and data-driven decision-making to improve education for all
students .
Student performance information is used to guide instructional decisions at the

classroom level and to identify students who are struggling . The Rtl framework seeks to
identify students who may be at risk and require intervention ; as a result, specific
interventions are incorporated that enable teachers to respond to student needs before
their struggles worsen . School principals and Chief Area Officers have been provided a
menu of options for intervention materials, professional development, and support
services that they can use to meet the needs of struggling students .
The goal of Rtl is to ensure that all students who are not achieving at the expected rates
in reading and mathematics have access to support . It is estimated that schools will spend
approximately $45 million on instructional materials and professional development within their
FY2011 allocations; CPS will spend an additional $10 million in FY2011 on support services for
121
students who require more specific intervention .
CPS is requiring schools themselves to find $45 million out of their existing budgets for "instructional
materials and professional development ." But at the elementary school level where virtually all Rtl
interventions will take place CPS cut the funding for schools to hire consultants to implement
122 In addition to the cut for professional development, CPS cut
professional development by $54,387 .
$895,430 from the elementary schools textbook purchasing budget, and $879,438 from the elementary
schools computer software purchasing budget . The Rtl process on a national scale has shown that
software and remedial materials are critical for effective interventions with students . The CPS is
required by the state of Illinois Administrative Code to implement Rtl in every CPS school . According to
120
Chicago Board of Education Resolution 10-0728-RS2 (2010, July 28) .
121
122
FY 2011 budget attached CD-Rom Unit-19098 budget pdf page 106 .
43 IPage
the FY 2011 budget CPS how has, inclusive

of charter and contract schools, 680
schools . 123The additional $10 million CPS
is providing on a district wide basis come
to $14,700 per school .
The documentation process for Rtl is

extensive, requiring progress monitoring,
charting, and continuous real time
monitoring of students undergoing
interventions . These interventions are not
the responsibility of special education
teachers, but primarily the students'
124
regular education teachers . The overall
implementation of Rtl will be the
responsibility of the CPS Office of
Teaching and Learning . 125 This Office's
citywide unit was cut by $24 .2 million in
the FY 2011 budget, and the Office's central office administrative unit was cut by $1 .8 million in the FY
2011 budget . Effectively CPS has assigned implementation of the Rtl program to an Office that has been
126
fiscally gutted . Based on this budget information CPS implementation of any type of meaningful Rtl
program is in question.
Access Living has been heavily involved with the attempts of the Illinois State Board of Education to
implement Rtl for four and a half years . In February 2006, the Illinois State Board of Education (ISBE)
presented its proposed amendments to Part 226 of the Illinois State Administrative Code . These
regulations were required to be revised because of the reauthorization of IDEA . The revised IDEA made
major changes as to how Learning Disabilities (LD) were to be identified by schools .
123
124
Institute of Education Sciences (2009, February) "Assisting Students Struggling with Reading Response to
Intervention and Multi-Tier Intervention in the Primary Grades" US Department of Education NCE 2009-4045 .
125
126
The Office of Teaching and Learning central office is unit 10835 went from 40 staff down to 25, unit 10830 is the
citywide unit its staff was reduced from 29 .4 to 3 . Unit 10830 in FY 2010 had a budget of $31,596,432 in FY 2011 its
budget is projected to be $7,403,196 .
441Page
The changes in LD assessment are complex and were strongly objected to by some special education
professionals at the school level . The proposed ISBE special education regulations were rewritten in a
streamlined form that was not understandable to parents or for that matter to special education
teachers .
On July 25, 2006 Access Living submitted written comments to the ISBE on its proposed amendments to
Part 226 of the Illinois State Administrative Code . Our initial review was 18 pages long and covered
numerous aspects of the proposed regulations . On August 3rd U .S . Secretary of Education Margaret
Spellings released the new regulations for Part B of the Individuals with Disabilities Education Act . On
August 8, 2006 we supplemented these original comments with an additional statement to the ISBE at a
public hearing held in Springfield Illinois . We again commented on September 12, 2006 at a public
hearing held in Chicago on the proposed 226 regulations . On December 14th we again spoke before ISBE
before their vote on these regulations which went before the State Legislature' Joint Committee on
Regulations (JCAR) . Access Living along with many other advocacy organizations, in particular the
Learning Disabilities Association of Illinois and ISELA - Illinois Special Education Coalition, effective froze
ISBE's rules in the committee but eventually they passed .
On June 14, 2007 the Illinois Superintendent of Schools Dr . Christopher Koch invited a number of the
stakeholders in relation to our State special education rules to a meeting . Among those attending this
meeting either in person or by phone were representatives from the Illinois Federation of Teachers,
Illinois Education Association, the chair of the Illinois Special Education Coalition (ISELA), Family
Resource Center on Disability (FRCD), Designs for Change (DFC), Access Living of Chicago (AL), Illinois
State Advisory Council on the Education of Children with Disabilities, the Learning Disabilities
Association of Illinois (LDA-l) and associations representing Special Education Administrators .
Four of these stakeholders, ISELA, FRCD, DFC, and AL agreed on a proposal to the State Superintendent
for specific alternative language for the two sections of the Special Education rules that the Joint
Committee on Administrative Rules (JCAR) of the Illinois General Assembly had at the time under a filing
prohibition . In relation to Rtl among the things we proposed was that there be a twelve-week
maximum for the implementation of scientific, research-based interventions if students were not
demonstrating academic progress (after which the district would be obligated to seek parental consent
for a full case study evaluation) . We also requested that the implementation time line for requiring
school districts to implement Rtl be delayed . All of these modifications were rejected by ISBE .
ISBE began to implement Rtl by using a federally funded pilot program called Illinois ASPIRE, CPS had
schools in the pilot program . Access Living using the Illinois FOIA law requested information from CPS
on for an important outcome of the Rtl program, that fewer students would need to be referred for
special education evaluations at these schools based on the improvement shown due to the Rtl
process . 127 The CPS provided initial referral rate data going back to FY 2003 and going forward to FY
127
Estvan, R . (2009, June 16) FOIA Request to CPS Freedom of Information Office . The elementary schools for
which data was requested were Brighton Park, Whistler, Shoesmith, Saucedo, Loyd, and Dever .

451 P a g e
2009 after these schools having implemented RtI . 128 The table below was provided to Access Living by
CPS .
Referral Rate (as % of Total Number of Gen Ed Students In School)

School Name School ID UNIT FY2003 PY2004 FY200S FY2006 (lO7' FY2008 FY2009
Dever 609884 3020 0 .88% 2 .02% 1 .80% 2.28% 1004 1 .93% , 1 .73%
Saucedo 610017 4250 1 .07% 1 .38% 0.99% 0 .60% 1 .07% 0 .77%
Lloyd 610040 4500 2.83% 3 .16% 3 .05% 3 .40% §8 . 1 .60% 1 .49%
Shoesmith 610175 5920 1 .55% 2 .06% 3.31% 4 .57% ' . 0 .92% 2 .04%
Whistler 610225 6420 1 .67% 3 .10% 4.64% 2 .29% 2 .34% 4 .19%
Brighton Park 610317 7470 0 .38% 1 .15% 0.97% 0 .83% 1 .61% 1 .44%
The CPS as part of the FOIA request also provided city wide initial referral rates for the same fiscal years .
These can be seen in the table below .
CPS Citywide initial referral rates
FY20031 FY20041 FY20051 FY2006k,'4412007*1 FY20081 FY200911

1 .93% 1 .89% 1 .84% 1 .66% 1 .73% 1 .43% 1 .56%
Overall we cannot discern any pattern reduction in the initial referral rates for these six CPS ASPIRE
schools . In fact by 2009 of the six schools half were higher than the citywide average for schools which
129
were not yet implementing Rtl . Reports looking at implementation of Rtl through the ASPIRE
program statewide issued for the 2006-2007, and 2007-2008 school years by the Center for School
Evaluation Intervention and Training at Loyola University of Chicago do not show the Rtl program to be
working up to expectations with even the higher level of support provided to the ASPIRE program
130
through the federal grant .
128
Rodriguez, L . A . CPS Deputy Chief Specialized Services Officer (2009, August 19) "Response to FOIA request from
Rodney Estvan ."
129
There were four other CPS schools in the ASPIRE program, but at the time of the FOIA they had not been in the
program very long and we felt if was unfair to examine the data for those schools .
130
The data in the 2007-2008 report was so dismal that the Center for School Evaluation at the request of ISBE
removed the report from its website and has never issued another report up to now . See
h ttp ://www .luc.edu/cseit/i-aspire.shtm l

461 P age
CPS is attempting to implement Rtl on a hurry up basis because of how far behind the school district is in
preparation to implement Rtl . Given these problems we recommend that CPS adopt a policy limiting the
length of interventions to no more than 12 weeks if the school cannot demonstrate the student is making
academic progress and go to a full case study evaluation for these students to determine if they have a
disability as defined by federal and state law .
Recommendations relating
to the CPS FY2O11 budget
• We believe public education in Illinois will be faced with similar fiscal problems in FY 2012 . We
strongly recommend that CPS show great restraint in making budget deficit estimates early in the
appropriations process . Making estimate after estimate based on evolving state funding estimates
reduced the creditability of the CPS budget process .
• We believe CPS should pass a rule limiting the time frame for Rtl interventions for students suspected
of having disabilities . We recommend that CPS adopt a policy limiting the length of interventions to no
more than 12 weeks if the school cannot demonstrate the student is making academic progress and
move to a full case study evaluation for these students to determine if they have a disability as defined
by federal and state law .
• The CPS Board should approve a property tax rate increase to the current cap . Even though the money
realizable under the current tax cap is limited, in the current environment every dollar counts .
W e support the Board's proposal to utilize all reserve funds in order to limit any additional layoffs or
class size increases . We recognize that if the State is not able to keep payments flowing to CPS during FY
2011, CPS will be required to make mid-year budget adjustments including possible program changes
with associated layoffs . We strongly recommend that CPS not utilize any additional short term
borrowing against any expected State payments .
W e believe that the proposed cuts to citywide special education services are excessive . Some of the
citywide services being reduced with have actual impact on schools . Even though it was obvious CPS in
the FY 2011 budget attempted to protect and increase special education support services in schools
these efforts can be undermined by the reductions in citywide services .
W e applaud the fact that CPS has authorized the creation of a Board of Education Finance and Audit
Committee . But the rule that creates this committee, 10-0728-RU1, does not give it a clear role in the
budget process . We strongly recommend that CPS look at the ISBE Board's budget process and its use of
471 Page
a subcommittee in that process . We recommend CPS adopt a similar role for its new Finance and Audit
Committee .
We think CPS should be aggressively lobbying the Chicago City Council to retrieve excess funds
currently in TIF accounts . CPS should be requesting fiscal impact studies on any new TIF districts that are
proposed in the future and act in the best interests of CPS in relation to tax dollars lost from such
proposed TIF districts .

48IPage
Appendix 1 CPS Power Point Presentation given on
February 25, 2010
. hy is Daficit-S o Large .
Per Pupil State Funding Gap
$1 Per
unding $6,119 $7,992
ducatio
Actual CPS "Per Educational Funding
Pupil Funding" In Advisory Board "Per
FY2010 Pupil Funding"
Recommendation for
FY2011
∎ * ∎

491Page
. hy is . .e icit So. r e?
Decreased State Funding
$21 M. $14 M, $33 M.
Bilingual Early Pension

Education Childhood Contribution
Education
2 Decreased
Local Revenue
$138 M.
- * I

50 1 P a g e
3
^~u Increased Pension Contribution
~~~0
$279 ~~"
.~~
~~ ~m~~~~~~~~v~~~~wA~~ a 41/6 COLA
~" Increased
"~.~~ .~~~ . .~ . ~~~ . .~~ . .~ . .
~~~ ~~ I Healthcare
!~~~~~
~
.
~ union
Increases for
members
r Increased
go Operational
Expenses ~% w
Increased
6, Debt ~~07
~N
~~
Service
511 P a g e
Appendix 2 Access Living Letter to CPS on Budget transparency
ACCESS LIVING Center for Service, Advocacy and Social Change for People with Disabilities 115
I
West Chicago Avenue, Chicago, Illinois 60654 tel : 312 .640 .21001 fax :
312 . 640 .21011 tty :312 . 640 .2102 1 www .accessliving .or g
Re : Developing a more transparent proposed budget document for FY 2011
May 14, 2010

sent by e-mail
Christina D . Herzog
Budget Officer
Chicago Public Schools
125 South Clark Street
Chicago, Illinois 60603
Dear Ms . Herzog,
As you may recall in our meetings with CPS CEO Ron Huberman on January 5, and February 3, 2010
Access Living discussed the issue of improved transparency of special education expenditures and
positions in proposed budgets . This letter is making specific recommendations for what I would like to
see in the CPS FY 2011 budget in relation to that issue and related issues that impact the overall financial
profile of CPS .
Section : Chicago Public Schools FY 2011 Budget Overview
Traditionally in this section, CPS has a subsection on financial challenges . Because the issue of delayed
payments by ISBE to CPS this section clearly will have to address that issue in a major way . There are
several things in this section that will make reading the entire budget more understandable .
First rather than just indicating the gross amount of payments the state is in arrears to CPS at the time
of the production of the budget document I would like more information included than that, rather than
simple statements discussing in arrears of payments for "categoricals," I would like the statement to
indicate which fund type payment is in arrears, and the amount not in arrears for each fund type . For
example GSA, general education block grant, educational services block grant, state payments for the
pension fund (CTPF), etc .
Second, we would like to see in this section a short discussion about how CPS covered the delayed
payments . Presumably this short fall was covered by stabilization funds . We think it is important to
discuss the drawdown of these funds in relation to the failure of ISBE to make payments . The public
should know when, what month, these funds began to be drawn down and the total amount of the
draw down . Oblique references to "incredible pressure" placed on the CPS general fund are not
adequate in the current situation where the state has failed to pay millions of dollars .
At this time we are unclear whether or not CPS has been forced to delay payments to special education
private providers and school districts outside of Chicago who are educating students with disabilities . I
52IPage
have heard from one school district that CPS has not made its payments, I do not know if this is
generalized at this time . Historically CPS has during budget crunches delayed payment well beyond 30
days, out as far as 120 days once that I can recall . If CPS has been forced to delay payments to vendors I
think a reference should be made to this in this section .
In this introductory section CPS should also discuss the "structural deficit," as it did in the FY 2010
budget . I would like to see a somewhat more detailed introductory discussion in this section in the FY
2011 budget than what appeared in the FY 2010 budget . In the section titled "selected cost drivers and
balancing the budget," I would like to see any table of reductions clearly reflected in the comparison
table of "difference between FY 2011 and FY 2010 distribution of appropriations by major fund
categories and unit groups" that appears later in the budget document (pages 17-19 FY 2010 budget) .
This means extensive footnoting so this information can be cross correlated and examined in detail .
In the proposed FY 2010 budget at page 7 there is a line item indicating "reductions in administrative
personnel and services" of $25,608,557, but there is no way of confirming this statement simply by
looking at the comparison table by fund categories on page 19 . In this table the only clear administrative
line is for central and area offices which was reduced by $4 .9 million .
On pages 281 and 282 of the proposed FY 2010 budget there is a listing of FY 09 and FY 2010
administrative positions . The total saving in reductions in these listing are completely consistent with
those on page 19 . On page 280 we again see the $25,608,557 administrative reduction figure, but this
time it is associated with a reduction of "208 .4 FTE ." The total positions reduced between FY 2009 and
FY 2010 in administrative units is 119 .4 (pages 281 and 282) . On page 59 in yet another table "CPS all
positions by Location," lists the total reductions in administrative positions as 120, the only way to
balance the 208 .4 number with the 120 number is by assuming some of the 107 city wide clinicians and
teachers are being counted as administrators .
I find characterizing city wide staff as administrative as particularly problematic . We have been informed
by citywide special education staff that all positions listed under the title special education job coaches
(UNIT 11670) were eliminated this spring as part of the what CPS publicly characterized as part of "500
mostly non-teaching job cuts," in a press release the CPS characterized these layoffs as part of
"administrative costs ." Since the services these job coaches provide to students with disabilities are part
of their Individual Education Plans (IEPs) we find characterizations of these type of layoffs as
administrative particularly questionable .
Even if one gives up on trying to balance the administrative position reduction claims made by CPS in the
FY 2010 budget document, and just looks at the money, I am still left wondering how much of the $25 .6
million reduction listed is in salary and benefits, and how much is in services . Page 11 of the FY 2010
budget indicates that there was a $58 .7 million reduction in contractual and professional services in the
general operating funds between the two years, but what part of that is administrative is unclear .
There was in the FY 2010 budget no year to year comparison between detailed expenditures by units
and account groups, to do so requires comparing budget books . So for example we can see in FY 2009
the office of specialized services had appropriated from the general fund $1,003,427 for contracts and in
FY 2010 it had only appropriated to it $952,662 for contracts . But we have no way of knowing what
proportion of this reduction of $50,765 could be considered to be administrative in nature . I am sure if
the CPS budget department led me though the budget it could show me where the other $20,617,100 in
reductions are for this line item, but it could hardly be called transparent . It seems the simpler approach
53IPage
would be to footnote each budget reduction in the budget overview section cross-referencing it to
where the detail is in the budget which would allow the reader to easily locate this information .
Section : Financial Summary Tables
Much of the information contained in this section is mandated by various rules . But it is very difficult to
determine the breakdown of special education appropriations by the three funding sources . Somewhere
in the budget it needs to be clarified exactly what part of the total special education appropriations
comes from Federal IDEA funds, what part comes from the state block grant, and what part comes from
CPS's local taxing ability . This should be presented in both actual dollars and in percentages . It also
seems clear that ISBE has not provided CPS its special education block grant categorical funds this school
year due to the cash flow crisis . It should be made very clear in the budget the exact amount of local
funds CPS was forced to utilize in order to cover this failure on the part of the State of Illinois to provide
funds that were promised to and appropriated by the CPS Board .
This is particularly critical given the issues about special education funding in Illinois that have been
raised over the last year in the House Joint Resolution 24 special education funding task force .
Section : District Wide Report
I would like to see in the functional expenditure analysis the total number of positions associated with
each of the functions . In particular I would like to know how many special education teachers and ESPs
are associated with the salaries listed in the table for the proposed fiscal year . I believe that the prior
budget year's functional expenditure analysis should be included in this section for reference purposes,
this should also include the number of positions associated with each of the functions .
I believe that there needs to be extensive budget notes related to "contractual services ." These
contractual services need to be broken down and defined in these notes . For example the reader should
be able to know how many of these dollars were actually tuition paid to charter schools, contractual
agreements with various contract schools, services for turnaround operators like AUSL, tuition paid to
private special education schools and public providers of services to CPS students, and various other
types contractual services .
Section : Resource Overview
This section is one of the most problematic in the CPS budget document . From year to year the first
paragraph of this section under the subheading "all funds," has been fairly consistent . The first
paragraph provides the total projected resources for CPS in the coming fiscal year and it compares that
number to the prior year's total . A pie chart is then provided of where CPS's money comes from in total .
But the next paragraph varies from year to year . In FY 08 it focused on the Illinois General Assembly's
annual budget failing to pass in the Spring session and how CPS used a then as yet unapproved state
budget for its fiscal projections in the FY 08 budget . In the FY 09 budget this paragraph began by
discussing property tax revenues and then moved to a discussion of appropriations from the General
Assembly. In the FY 2010 budget discussed delayed payments from the State, then jumps to a property
tax increase contained in the budget, then to ARRA dollars .
541 P a g e
In the FY 2010 budget this paragraph contains the following statement " . . .this budget proposes a 1 .5%
increase in property tax extension, which will increase an average homeowner's tax bill by $18 a year ."
That sentence told the reader absolutely nothing about the actual revenue increase the 1 .5% increase
generated for CPS . On the next page under the subsection on resources there is a confused discussion
on property taxes, where the 1 .5% increase, the impact of a acceleration in spring property taxes due to
then pending legislation, were amalgamated together to create a projected increase in property taxes of
$180 .9 million . One cannot determine how much the property tax increase itself yielded, nor can one
determine how much revenue was lost to CPS in FY 2010 by the district only increasing property taxes
by 1 .5% instead of the allowable 4 .1% . Given the dire fiscal situation CPS faces this seems to be relevant
information for the CPS to put in the budget document . There is a lack of transparency in this section of
the budget, which I hope is not repeated in the FY 2011 budget document, particularly since on March
22 the Mayor indicated his opposition to CPS increasing property taxes .
Under the subsection on State Resources in the FY 2010 budget there is a bullet point titled "state
categorical program revenues ." In this section the block grant CPS receives for special education services
is completely obscured . CPS states "Total appropriations for state categorical programs decreased by
$142 million . This was a result of an increase of $144 million for the mandated categorical programs,
which was offset by a decrease of $286 .0 for all of the other state categorical programs ."
Within the ISBE Budget the Chicago Block Grant has a hold harmless provision, the methodology by
which CPS is allocated funding for a number of programs through block grants are based on proportions
that were calculated in FY 1995 . So a good part of this increase in mandated categorical dollars were for
special education .
I think what was cut and what was increased should have been clarified in this statement . In similar
statements made in the FY 2011 budget I would like to see this made far clearer .
In the section on federal sources in the FY 2011 budget I would like to see some accountability for the
IDEA Part B ARRA dollars that CPS has spent so far . I think the categories should be divided into at least
costs for special education teachers, aides, and citywide professional salaries, consulting costs, and
program innovations (with some descriptions) . This should be presented in a table giving the total
expenditures to date and the percentage these categories represent of the total IDEA PART B dollars CPS
has received . The public should also be informed of the funds remaining to be obligated by September
30, 2011 and how CPS intends on spending these funds .
In the subsection titled Fund Balance Assumptions for FY 2011, I would like to see far more detail than
existed in the FY 2010 budget . Given the fact that CPS has been shorted millions of dollars in state
funding during FY 2010 I think it is critical, as I stated above, that CPS discuss in this section its month by
month cash flow situation from September 2009 through June 2010 . On a month by month basis money
removed from the CPS stabilization fund should be documented in this section .
In the subsection on the Personal Property Replacement Tax (PPRT) I would like some analysis done of
CPS's history of projecting revenue from this source . For example in the FY 08 budget CPS projected
PPRT revenues of $200 million, but according to the FY 09 budget actually received $215 million, which
was a underestimation of revenue projection of 7 .5% . In FY 09 CPS projected revenues of $191 .5 million
and actually received about $188 .5 million which indicates an overestimation of revenue of 1 .6% . CPS
was projecting a decline in revenue from PPRT in FY 2010 of $27 million or 14 .3% . It is important for the
public to know how CPS is making its budget assumptions for this area of revenue and that estimates
are more often wrong than right by millions of dollars .
55I P a g e
Since state funding for the Chicago Teachers Pension Fund (CTPF) is discussed traditionally in this
section, some update on state funding for CTPF is merited . Public Act 096-0889 which reformed
pensions does not obligate the State of Illinois to provide any specific proportion of the funding for
CTPF . It does not provide any enforcement to the commitment in Public Act 88-593 . Hence it is critical
for the public to begin to understand as of the date of the budget document what the fiscal obligation of
CPS will likely be to CTPF starting in fiscal year 2014 and going on to 2059 when CPS is required "to bring
the total assets of the Fund up to 90% of the total actuarial liabilities of the Fund ."
The public should know whether or not CPS is establishing a sinking fund to prepare for its pension
obligations beginning in 2014 . Just because CPS has 45 years to reach 90% of the total actuarial liabilities
of fund, this does not mean that CPS may not be faced with yet another fiscal crisis relating to CTPF
within ten years if the fund's balance drops to the point it cannot meet its obligations to retirees .
Section : Expenditure Analysis
Consistent with my comments made above on the delineation of teaching positions I believe in the FY
2011 budget document the position overview should be footnoted and readers directed to a section of
the budget where these positions are more clearly established .
In the subsection on "teacher salaries" I strongly object to the amalgamation of salaries in the FY 2010
budget document inclusive of "regular teachers, part-time teachers, substitute teachers, assistant
principals, and other administrators" (p. 70) . Principals, assistant principals, and various other
administrators are clearly not teachers and should be counted as school based administration .
Moreover, including school based administrators in this salary subsection raises serious concerns over
the teacher position counts in the budget . These issues should be clarified in the FY 2011 budget .
In FY 2010 budget the subsection on "professional services and tuition," is a confusing combination of
tuition payments to charter schools, to colleges, private special education schools, and professional and
contractual services . There should be extensive footnoting in this section, breaking out each area .
Contractual services should be broken down by function, for example for turnaround school work,
special education work, etc . Analytically because this total is such an undefined amalgam it is largely
useless as a measure from year to year .
Section : Expenditure History
The same definitional problem discussed above in relation to "teacher salaries" applies to the tables in
this section .
Section : Debt Service Funds
I believe it is highly questionable for the table on page 84 of the FY 2010 budget document to combine
expenditures inclusive of principal, interest, and fees . Each of these components should be broken out .
There should be a footnote in relation to fees that provides the public information on what entities
these fees were paid to . The public and media have a right to this information and should not have to
FOIA to get it . This is particularly important following the Bloomberg news story that appeared on May
4, 2010 which raised serious questions about fees the City of Chicago may be paying due to a lack of a
competitive process in debt issuance . Given the interrelationship between the city and CPS it would
seem appropriate that all fees be disclosed in the budget document .
561 P a g e
Section : School Based Budgeting
In the FY2010 budget document there was a discussion of the use of enrollment projections calculated
by the Office of School Planning and Demographics for determining quota teachers and support staff for
the upcoming school year . This is of course standard practice and has been for numerous years . I think it
would be appropriate for CPS to provide data to the public on how close to the 20th day enrollment
figures these projections have been over a number of years . I do not think it will come as a revelation to
CPS that these projections are often characterized by parents and teachers as being low ball estimates
which are designed to save the school district money .
Any change in the teacher quota system for FY 2011 due to the fiscal problems of the State and CPS
needs to be extensively elaborated on in the budget document . The same practice should also be
applied counselors, assistant principals, etc .
School segment reports in the attached CD in the FY 2010 budget did not included charter schools and
contract schools, these schools should be included . If CPS does not have access to the data necessary to
create such a report for these schools then appropriate accounting rules need to be drafted by CPS to
allow for such data capture . The School Code (105 ILCS 5/Art . 27A- 5 (f) ) requires that the annual audit
of each charter school be submitted to ISBE, using this provision CPS can capture most of the necessary
data to have a school segment report for each charter school . If this section of the School Code is not
adequate to allow for the collection of fiscal data necessary for a school segment report to be
completed for each charter school unit in Chicago, then CPS should consider seeking amendment to
ARTICLE 27A of the School Code to correct this situation .
As I have discussed above data in the school segment reports on the number of teachers in each school
should be broken down by regular and special education teachers using the established ISBE standard
for who can be considered to be a special education teacher .
The FY 2010 budget document unlike prior years did not include a section titled "student demographics
and statistics ." This was also noted and objected to by the Civic Federation in their analysis of the CPS FY
2010 budget . This section should be restored and information on the total numbers of students with
disabilities should be included in this section .
Section : Organizational Overview
I found the overview of new and reorganized departments in the FY 2010 budget document to be useful .
As I discussed above (at page 2) the reductions listed on table appearing at page 280 of the FY 2010
budget used titles for various reductions that cannot be cross referenced in many cases .
Section : Capital Projects Funds
I support the general recommendations of the Civic Federation in relation to this section of the budget . I
also believe the FY 2011 budget should contain a complete list of contractors and the amount they
received for all capital projects in FY 2010 .
57JPage
Section : Budget Process
I have profound disagreement with the policies outlined in this section of the budget book . I believe the
Chicago Board of Education should re-establish a budget or audit subcommittee . On July 26th 1995 the
Board suspended its own rule requiring a standing budget committee, in July 2009 all references were
removed from the Board rules relating to such a subcommittee . The Board needs to have a standing
finance oversight or audit committee, just like publicly held corporations do . The CPS is the largest
employer in our State and its fiscal issues are extremely complex requiring budget or audit committee
meetings that are subject to our state's Open Meetings Act . Decisions like utilizing the stabilization fund
or what constitutes a fiscal emergency should be discussed publicly in a budget committee and then
brought to the full Board for final approval . The Budget process should be driven publicly through this
subcommittee .
It is my opinion that the Civic Federation's request in their FY 2010 budget review that CPS Board
members attend budget hearings prior to the formal adoption of the budget is a good one, but it does
not go far enough . I believe that much of the work currently being done by the CPS Office of
Management and Budget (OMB) that begins early in the school year needs to be publicly presented and
discussed in an official Board subcommittee . All feedback on the budget process from schools currently
collected by OMB according to the FY 2010 budget should also be presented to a Board subcommittee
to improve the budgeting process .
In relation to the subsection on the Fund Balance Policy . I have come to the conclusion given the fiscal
inability of the State of Illinois to live up to its funding commitments to CPS, that it is highly unrealistic to
continue to believe that CPS can continue to maintain a range of 5% to 10% of its operating and debt-
service budget in the stabilization fund . It seems obvious that in FY 2011 in order for CPS to replenish
the stabilization fund numerous education programs will have to be curtailed . Any unreserved fund
balance from Capital Projects Funds should to the extent legally possible be considered to be part of the
stabilization fund .
Conclusion
There is deep skepticism among members of the public at large about CPS's claims of dire fiscal
problems . This skepticism is rampant among non-Chicago members of the Illinois General Assembly,
particularly since the adverse publicity around the Michael Scott scandal and tragedy . Small things count
in the public court of credibility, developing a far more transparent budget document is one of those
small but important things .
Rodney D . Estvan
Education Policy Analyst
cc : Diana S . Ferguson, CFO CPS

Drew Beres, Special Assistant to the CEO

CPS Special Education Budget Report FY2011

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ja vu REN2010ju va all oACCESS

Chicago Public Schools 2011 Budget Review

Tribune archive photo

Section III : Deficit estimates as a bargaining tool page 27

Section IV : Proposed FY 2011 budget page 25

Section VI : CPS and property taxes page 35

Section VII : Response to Intervention and CPS page 41

Recommendation relating to the FY 2011 proposed budget page 46

Section I : FY2011 Education

FY2011 All Funds Resource

4 FY 2011 budget at page 63 print edition .

5 FY 2011 budget page 16 and 79 print edition .

CPS Special Education Funding

Students with Disabilities by Year

6 FY 2011 budget at page 7 print edition .

h ttp ://tigger .uic.edu /"'rramakri/Readings/Accounting-Profession/Chicago-largest%o20employers .htm

Hi3h- :ost disabilites tow-cost disabitit}

%A CPS All Other Districts

Program or FY 2010 Gov's FY 2011 proposed Difference

Children's Mental $2,700,000 $1,691,000 ($1,009,000)

Disabled Student $459,600,000 $367,134,800 ($92,465,200)

Special Education Funding in Governor's March 10, 2010 Budget

21 Bristo, M . (2010, April 2) "Letter to Governor Pat Quinn ."

27 96th General Assembly " Bill Status of SB0044"

Section II : Budget scenarios

In February 2010, CPS

CEO Huberman issued

fiscal difficulties the CPS

the Table below .

$200 million "The Illinois State Board of

"The projected 2011 pension

fund that is used to buy

(a) : $135 million (a) " . . .for a 4 percent raise

(a) : $86 million (a) : "costs increase to

ISBE stated in a press release in January 2010 in relation to this issue :

(a) bilingual education $21 million

Then Mr . Huberman informed the reporter :

Reduce positions not supported by student enrollment and

Cancel plans to expand Academic Enhancement programs 2 M.

39 Huberman, R . (2010, April 20) Memo to Principals

CPS class size policy change 10-0615-POI FINAL

Board meeting 42 We stated Vg. PROCEDURES FORMOWFYINOCLASS SIZEPOLICY

pressure on general education TO s FOR THE 2010-11 AND 201141

(1) pmaaae class sloes to us a 36 students at some a alletarnsnterv schoof

would be laid off as a result of

would create a savings of $125

44 Chicago Public Schools (2010, June 15) Board Resolution 10-0615-RS3 .

(1) Relevant to the decision-making needs of users

47 Deloitte Accountants (2010, February, 1) "2010 Edition IPSAS Summary"

Section III : Deficit Estimates

to campaign for unionized CPS employees to make

CPS made a significant public relations effort to

67 See CPS rule 10-0728-RU1 .

68 ISBE District Report Cards 2002 and 2009 .

70 FY 2010 Budget page 68 (print version) .

71 FY 2011 budget page 89 print edition .

CPS All Positions by Location

Budgeted Location FY2009 FY2010 FY2011 FYI t vs F111 vs

Total Positions 43,391 42,082 39,924 (2,158) (3,467)

Year Tuition payments to charter and contract schools

74 FY 2011 budget page 94 print edition .

75 FY 2011 budget at page 22 print edition .

In April 2009 Access Living released its report Renaissance

Specialized Services Unit 11670 contained charter schools