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

1. Chicago Public Schools Budget
Overview
Board of Education
March 28, 2012
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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
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3. Lower revenues and accelerating expenses
lead to significant deficits in FY13 and beyond
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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
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5. Illinois ranks last in the nation for funding
education
Source: U.S. Department of Education, National Center for Education Statistics, "National Public Education Financial Survey (NPEFS) , 2009
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http://nces.ed.gov/pubs2011/2011329.pdf

6. Growing pension expense is challenging
now, devastating in 2014 and beyond
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7. Nationally, most pension systems are state
supported for unfunded liability
Sources: NCES CCD 2010 School District Data and National Council on Teacher Retirement 2011 Member list
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8. Debt service payments will continue to rise,
even with reduced borrowing in the future
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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. 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
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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
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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)
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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
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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
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