For the Record: $600 million in budget savings

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In every statement on the budget this year, CPS has stated that it “has cut Central Office spending by nearly $600 million since 2011,” adding that the reductions helped keep budget problems away from schools.

It is a phenomenal claim. For one, hundreds of millions in cuts have already been made, year after year, by one administration after another.

Plus, the entire central office budget for the current 2012-2013 fiscal year is just $233 million, up from about $200 million in 2010. The biggest addition since that time was the Office of Portfolio, created in 2011 to authorize and manage new schools. It has come to include other departments, such as the Office of School Improvement. The portfolio office went from an initial budget of $5 million to $88 million in 2013, and has now been incorporated into a new Office of Innovation.

Asked about the $600 million in savings, CPS spokespeople said they referred to central office in the broadest sense and that it includes debt service, operations, citywide units of personnel who work in more than one school, and programs.

In their most recent statement on the budget, CPS revised the wording to say “central office directed spending.” They also say the total was rounded up and that actual savings were about $573 million.

Even so, the figure is hard to substantiate. Direct spending in schools—including teacher and principal salaries, supplies and the like–accounts for nearly 70 percent of the CPS budget and has increased by about 4 percent since 2010. Meanwhile, CPS’ overall budget has gone down by about 2 percent.

To reduce non-school spending by $573 million would require cuts of 40 percent in non-school-related spending.

A Catalyst Chicago analysis of the CPS budget shows that virtually every area that is not considered a direct school expense has posted an increase in spending. One of the exceptions: citywide units. The biggest citywide unit is special education resources, which decreased by almost 150 positions since 2010.

“It just makes me laugh,” says Wendy Katten, who runs the parent advocacy group Raise Your Hand. “If [the savings] are true, they should show us the line items.”

Katten says that her organization is about to kick off a committee to look at where money in the school district is going. Since the demise of organizations such as the Chicago Panel on School Policy and the Cross-City Campaign for Urban School Reform, intensive scrutiny of CPS’ budget has been limited.

Savings on one hand, increases on the other

CPS spokeswoman Becky Carroll admits it would be impossible to find evidence of the reductions in the official budget book. “It is not the way it works,” she says.

Along with cuts, there has also been increased spending on other things, she says. Some of those things are contractual obligations, such as salaries, health care and pensions.

In other cases, the district saved money in one area, but paid more for something else– and therefore, Carroll says, the reduction is not reflected in a line item. For example, Carroll says CPS saved $5 million when district officials renegotiated the milk contract. But because other food expenses went up, it doesn’t look like a net savings.

Still, she insists that if the milk contract weren’t renegotiated, the district would be in the hole for $5 million more.

“It is $600 million less than would have shown up on our balance sheet had we not done what we did,” Carroll says. “It is less of a pressure, less of a gap.”

Carroll adds that the district is facing a huge budget shortfall—somewhere around $1 billion—and that it has few places to turn for revenue.  CPS officials have said they believe they will be able to balance the budget by draining one-time reserves, which were created by Cook County doling out property tax revenue earlier than expected (though it seems like this move would help with cash-flow rather than create reserves).

Carroll and other CPS officials have refused to say how much money is being cut from schools. The district this year switched to a per-pupil funding strategy that is intended to equalize resources among schools. 

School budgets are preliminary, Carroll says. Yet principals and local school councils have reported significant cuts of varying amounts, from $1.5 million to $66,000.  

CPS must hold at least one budget hearing prior to board approval. The final budget must be published at least 30 days before the budget hearing.

At this point, the board can’t vote on the budget until its August 28 board meeting, which is two days after the start of school.