The Chicago Board of Education unanimously — and without any public presentations or discussion — approved borrowing more than $1.1 billion on Wednesday to help the district make it through the summer and open schools on time next fall. The bulk of the cash, $935 million, will come from what’s known as tax-anticipation warrants, which are secured with the promise of revenue from future tax collection. It’s not the first time the district has relied on tax-anticipation warrants and other districts also turn to them to alleviate cash-flow problems. CPS also is tapping into another line of credit to borrow $200 million.
Board President David Vitale told the Tribune that without help from the state there would be mass layoffs. “We obviously don’t want to destroy the district. We don’t want to lay off hundreds, if not thousands of people,” he said. Even with state assistance, Vitale said budget cuts may be needed.
The massive borrowing raises questions about how sound the district’s supposedly balanced budget was for the 2014-2015 school year. In addition to the last-minute borrowing, the district is counting on extra time from Springfield to pay $634 million it owes the teachers pension fund. You may recall that the board closed this year’s budget by borrowing two months’ worth of revenue from the upcoming fiscal year, a creative accounting trick that allowed it to solve its budget crisis for the moment and even increase basic per-pupil funding by $250 during an election year. Somehow, CPS must now pay for a year’s worth of operations with just 10 months of funding.
A recently released internal report produced by the firm Ernst & Young LLP underscores the extent of CPS budget-planners’ short-sightedness. As Crain’s Greg Hinz puts it, “The report effectively damns just about everyone who has anything to do with CPS: shortsighted managers and an oblivious City Hall, a state government that has ignored its stated top priority to fund education, and greedy labor unions that take out too much and put in too little.”
2. Multi-million contracts, new charter leases … Noble Academy will share space with CICS ChicagoQuest for a year after the board approved a co-location Wednesday. Noble recently abandoned a plan to move from downtown to Uptown after parents and elected officials protested. Earlier this week, Noble’s CEO and founder Mike Milkie told Catalyst the solution was temporary and the school would continue to look for a permanent home. “It’ll work fine,” he said, adding that CICS is under-capacity so there will be room for Noble. “We’ll just have to be good neighbors and good guests.” A CTU researcher says this is likely the first time two charters have co-located.
Last night’s board meeting at Gwendolyn Brooks College Preparatory Academy in the Roseland neighborhood also saw the awarding of several multi-million-dollar contracts and other new charter renewals. The board approved a $30 million, four-year contract with a private company to recruit, schedule and hire school nurses, as well as provide about 170 nurses to supplement the 280 employed by the district. Critics said the contract would further privatize district services and questioned how the new out-of-town vendor could find enough nurses for the start of the school year. Other agreements included: a $10 million, two-year contract to provide, schedule and recruit speech, occupational and physical therapists in schools; a $99 million one-year renewal of Aramark’s food service contract; and a $15 million one-year contract for 22 Safe Passage vendors, who will now work at 140 schools.
The board also agreed to a two-year renewal for Joshua Johnston Fine Arts and Design Charter School, up from a previously proposed one-year renewal. And the Academy for Urban School Leadership (AUSL)’s contract to manage Dulles Elementary in the South Side was extended for two years; previously CPS officials had recommended a three-year renewal. Dulles is one of the worst-performing schools in AUSL’s portfolio. KIPP Ascend Charter School received a two-year agreement to stay in Penn Elementary on the West Side. In the past, the charter has asked Penn for increasingly more space as its enrollment has climbed by nearly 300 students over the last four years, with Penn’s dropping by 40.
A note: This was new board member Gail Ward’s first board meeting. She was installed to replace Andrea Zopp, who’s running for a U.S. Senate seat. Three other new board members’ first meeting will be in July.
3. Meanwhile in Springfield … Even though state legislators and Gov. Bruce Rauner are still tussling over a general spending plan, on Wednesday the governor went ahead and signed off on a House bill to ensure schools open this fall. The plan calls for a little more than what was allocated last year — and actually changes the way funding is distributed to school districts. It sets aside $85 million to go to the neediest districts first, as WUIS NPR Illinois astutely notes, and makes the wealthiest districts wait til last. “The education spending legislation Rauner signed effectively caps each district’s loss at $232 per student,” according to the NPR affiliate.*
This change had been signaled in recent meetings of the Illinois State Board of Education, which had indicated would change up the way it allocates money when it fails to provide the so-called “foundation level” of $6,119 per child– the amount the state itself has determined is needed to provide a basic education. Normally when ISBE can’t make that full allocation, it provides an equal percentage of state aid to rich and poor school districts using a formula called “proration.” School superintendents from across the state had been lobbying ISBE to switch to a weighted model that favors districts with high poverty and low local property wealth — districts like Chicago.
One problem with the approved education budget that may come back to haunt Illinois is that the state is allocating just half of the $50 million in new early childhood education dollars than it had promised the federal government last year in its successful bid for an $80 million preschool expansion grant. States that don’t fulfill their own funding commitments risk losing out on the federal dollars.
4. Impact of poverty … Reporters from WBEZ and the Daily Herald analyzed a decade’s worth of test score to data and found that poverty has actually become a slightly stronger predictor of academic achievement in Illinois than it was decade ago — “despite reforms that have included school re-staffings, closures, consolidations, new state standards and more stringent guidelines for evaluating teachers.”
In that decade, poverty has also become more concentrated across the state, as the number of schools with more than 90 percent of students grew from 421 in 2004 to 649 in 2014. And the state’s overall growth of poor kids has happened outside of Chicago, which actually saw its population of poor students decreased by 29,000 over the last decade. That’s about the number of students the city has also lost who attend public schools.
Linda Lutton, the WBEZ reporter on the project, said the collaboration with the Daily Herald was “fortuitous” as both outlets happened to be looking at poverty at the same time. Lutton has been on leave from WBEZ since last summer while she completes a Spencer education reporting fellowship through Columbia Journalism School, where she is working on a separate radio project examining the intersection of poverty and education in Chicago.
5. Overcrowded classrooms … The Better Government Association published a report this week that found 51,000 elementary students, or about one in five, were in a classroom that exceeded the district’s class size standards a month into this school year. Across CPS, about 1,600 classrooms were overcrowded with about two-thirds of those on the South and West Sides. In about half of overcrowded classrooms, students were 90 percent or more low-income. But as bad as those numbers appear, they’re better than two years ago when CPS had 60,000 elementary students in overcrowded classrooms. Though this year’s number could be higher: about 3,600 more children are in charter schools now, and CPS doesn’t regularly track class sizes in those schools.
Just a few last points … because there’s been a lot of education news this week in Chicago. Turns out that interim CPS CEO Jesse Ruiz is trying to keep the scandal-plagued United Neighborhood Organization involved in the charter network it founded. According to a story in the Sun-Times, CPS now says it won’t let the United Neighborhood Organization Charter Network’s plans to take over the schools’ management contract from UNO without an audit or approval from Board of Education.
Meanwhile the University of Chicago Consortium on Chicago School Research released a wide-ranging report that tries to answer the question of what children need in order to become successful young adults. Its main conclusions are that a variety of rich experiences inside and outside of school in addition to mentorship are important to youth development, but that poor kids are least likely to have these opportunities.
Finally … As you may have noticed, Catalyst will be publishing our Take 5 news roundups only once a week during the summer time. We’ll go back to the twice-weekly round ups when school resumes in the fall.
*This item was updated to include clarification on the $85 million set aside.