FY13 CPS Budget Briefing


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Presentation to the Chicago Board of Education, March 28th 2012.

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  • Figures for 2013 to 2015 are estimates (Plus or minus $50M) due to uncertainty around revenue and ongoing labor negotiationsNeed facts regarding revenue/expenses FY96-FY05 Historical revenue growth came from strong state and local tax revenues - good economy Despite challenges elsewhere in Chicago, neither the city nor other agencies face this huge challenge. (need to confirm)
  • CPS receives 34.4% of revenue from state L.A.  gets 58.9% of revenue from stateN.Y. gets 43% of revenue from state
  • -Will add what the $355 million is equivalent to from a program perspective (ie how many IB schools and State Contribution $65; $75; $10No other district in StateFunded ratio:2002= 96.3%2003= 92%2004=85.8%2005=79%2006=78%2007=80.4%2008=79.7%2009=73.6%2010=67.1% 2011=59.9%
  • Many districts do contribute to pension, but not responsible for total like Chicago & NYCUnderfunded liability per pupil for both NYC & Chicago exceeds annual spending! Chicago equals $13,000 per pupilNYC does have burden, and it’s huge, but their revenue is 50% higher (per pupil) and low debt service
  • Debt Service Set –Aside means that amount we have to contribute to our debt service funds that fiscal year for payment on our bonds.
  • This slide probably needs to go to two slides, and needs some compelling languageOver $100M in operation/cental office cuts Changes need in way we manage facilities to keep money focused on stude learning Vetting 90 different options affecting programs and schools to minimize impact on student learning Key goal is to change way principals budget Give them more flexibility. $___M that was controlled centrally now devolved to schools Hope to release __% more for instruction than this year’s budget-Capital reduction to less than $100M force tough decisions
  • Noemi will present this slide
  • Highlight review of contractual and operations, etcStart conversation about internal review of ending status quo way of treating schools without going into specifics
  • Status quo is not working!
  • FY13 CPS Budget Briefing

    1. 1. Chicago Public Schools Budget Overview Board of Education March 28, 2012 1
    2. 2. Summary• CPS faces a daunting financial challenge in the next three years - staggering deficits which threaten our ability to drive student learning• Historical increases in revenue, which fueled spending and hid structural deficits, have reversed• Increased spending on pensions and debt service will siphon hundreds of millions of dollars from classrooms• Structural changes are needed to achieve long-term sustainability, and this will be challenging• FY13 budget process focuses on maximizing funds to schools, and engages and empowers principals more than ever 2
    3. 3. Lower revenues and accelerating expenseslead to significant deficits in FY13 and beyond 3
    4. 4. One–time fixes off set $726 million deficit from FY10 - FY12$5,200 What our revenues looked like with one-time fixes$4,900$4,600 What our revenues would have looked like without one-time fixes$4,300 2009 2010 2011 2012 Revenue Change $0 -$117 -$542 -$67 Revenue Adjusted Revenue Expenditure 4
    5. 5. Illinois ranks last in the nation for funding educationSource: U.S. Department of Education, National Center for Education Statistics, "National Public Education Financial Survey (NPEFS) , 2009 5http://nces.ed.gov/pubs2011/2011329.pdf
    6. 6. Growing pension expense is challengingnow, devastating in 2014 and beyond 6
    7. 7. Nationally, most pension systems are state supported for unfunded liabilitySources: NCES CCD 2010 School District Data and National Council on Teacher Retirement 2011 Member list 7
    8. 8. Debt service payments will continue to rise,even with reduced borrowing in the future 8
    9. 9. Cost savings result in lower FY12 deficit, but FY13 gap is daunting$6,200$5,900 FY13 Budget deficit expect to be between $600 and $700 million$5,600$5,300$5,000$4,700$4,400 FY12 deficit projected at $208M$4,100 FY14 and FY15 deficits expected to be$3,800 between $1 and 1.3 billion$3,500 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Revenue Expenditure 9
    10. 10. Clear principles guide our FY13 process• Protect what’s working, invest in key priorities to drive student learning• Maximize funding allocated directly to schools to empower principals• Continue to drive lower costs in operations, procurement and Central Office functions• Reduce capital spending to necessities• Use reserves judiciously where necessary 10
    11. 11. Investments in Student Learning• Invest in key priorities to drive student learning – Time Needed to Teach: A Full School Day that provides students with the instructional time needed to boost achievement – How We Teach: A new teaching framework to improve the quality of teaching and learning in our schools – What We Teach: Curriculum aligned to Common Core State Standards – Creating Additional High Quality School Choices: Invest in high- performing schools in each neighborhood—magnet, selective enrollment, IB, Early College STEM, military schools and high- performing neighborhood schools• Protect what’s working 11
    12. 12. The path forward for FY13 budget• Continue detailed review of all expense areas• Seek input from principal/chief advisory team• Release budgets to schools (Mid April) - Two months earlier than last year - Engage principals to ensure understanding of new approach• Present detailed capital plan (May 1)• Complete full budget and present to public (late spring) 12
    13. 13. Plan actions to address future structural problems, especially pension• Deficits of $1 billion or more are only a year away• Expense reductions to close gap would be devastating, revenue opportunities very limited• We must consider bold actions to ensure we can continue our mission• Parents, teachers, principals, community leaders and legislators will be key partners in finding solutions 13
    14. 14. Conclusion• The status quo for funding schools is not working for our students and district• Leading the district to financial sustainability will require difficult decisions• Primary focus must be on improving student learning• Resource limitations increase this challenge• CPS can’t solve this crisis on our own, we need input and assistance from all stakeholders• The students of CPS need all of us to unite for success 14