fy13 cps budget briefing

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


  • 1. Chicago Public Schools Budget Overview Board of Education March 28, 2012 1
  • 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. Lower revenues and accelerating expenseslead to significant deficits in FY13 and beyond 3
  • 4. Onetime 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. 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. Growing pension expense is challengingnow, devastating in 2014 and beyond 6
  • 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. Debt service payments will continue to rise,even with reduced borrowing in the future 8
  • 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 whats 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. 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 neighborhoodmagnet, selective enrollment, IB, Early College STEM, military schools and high- performing neighborhood schools Protect whats working 11
  • 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. 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. 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 cant 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