In a sharp reversal from previous statements, top Chicago school officials said Wednesday that the school system would be able to use for educational reforms all-or nearly all-of the $122 million generated by a proposed 1-percentage-point increase in the state income tax.
Several times last week, city school leaders indicated that the additional state aid would be needed to make up a projected $188 million budget deficit for the 1988-89 school year, and, even then, might not be enough to ensure that schools would open on time in September.
But on Wednesday, Clark Burrus, chairman of the school board`s Finance Committee, said the budget outlook was not as bleak as it appeared to be-or as school officials have been saying, since last fall, that it would be.
In fact, because of some ”huge windfalls,” the school board could have a surplus in next year`s budget, even if the state legislature fails to approve the income-tax increase, Burrus said during a meeting with The Tribune`s editorial board.
Some legislators applauded the reversal Wednesday because they said any additional state dollars could now be used for school reform. Others said they simply were not impressed.
”I think it is good news to hear that if we vote for a tax increase it will go towards improving education for children and not paying old debts,”
Sen. Arthur Berman (D., Chicago) said. ”It also means (that) with or without a tax increase, the schools will open. That is also good news.”
But Steve Brown, a spokesman for House Speaker Michael Madigan (D., Chicago), said: ”I don`t think this makes any difference. All along we have been saying that you cannot tie reform to any tax increase. He (Madigan)
thinks it is perfectly possible to have reform without raising taxes.”
New financial estimates from school officials indicate that the school system should be able to generate from other sources between $150 million and $217 million in additional money that would be used to reduce or eliminate the projected budget deficit.
Those figures indicate that, at worst, only $38 million from the proposed income-tax increase would be needed for the school board to balance its budget, provide the same level of service as this year and pay for a $44 million salary increase for teachers that was part of a two-year contract approved last October after a 19-day teachers` strike.
Failure to fund that 4 percent salary increase would reopen contract talks between the school board and teachers and mean that the system`s 419,537 students would face the threat of another strike in the fall.
In the most optimistic case, the school system could end up with a $37 million surplus in addition to whatever money is received from an income-tax increase, according to the new financial estimates.
Those new estimates hinge on several factors, all of which are either assured or have strong historical precedents. ”If these things happen, we`ll be able to open the schools without additional money from the legislature,”
Burrus said.
”We want to use any new dollars that come to the system (from a tax increase) for educational reform.”
Nonetheless, Burrus and Barbara Peck, the system`s chief financial officer, said school officials did not know last week just how good the system`s financial outlook was.
In fact, school officials have been predicting a gigantic budget deficit for the 1988-89 school year since Oct. 3 when the contract settlement was reached with the Chicago Teachers Union. At that time, the deficit was projected at $158.7 million.
Since Oct. 3, when the contract settlement was reached with the Chicago Teachers Union, school officials have been predicting a huge budget deficit for the 1988-89 school year. At that time, the deficit was projected at $158.7 million.
Last Thursday, school board President Frank Gardner said the income-tax increase proposed by Gov. James Thompson ”would provide Chicago with about $122 million toward closing the revenue gap projected for 1989-a total of $188 million.” He made similar comments Friday when he met with representatives of the teachers union and 20 other employee unions to discuss the deficit.
The abrupt improvement in the school system`s financial outlook, Burrus said, comes mainly from a higher-than-expected increase in property values in the city and an unanticipated jump in the amount of property and state taxes collected.
The surprisingly high increase in property values, owing to a hefty increase in the assessments of downtown land, should bring the school system an additional $48 million to $54 million that had not been foreseen, Burrus said.
More Top Picks Best Migraine Head Wraps For Tension Headaches
He said an increase in tax collections would give the system an extra $5 million to $24 million. ”Apparently, people are paying their delinquent taxes,” he said.
Other factors in the improved financial picture are:
– A speedup in the delivery of state aid payments that would give the board early access to $48 million to $50 million in August, 1989. This requires approval by Thompson, and he has given that for several years in a row, Peck said.
– The normal increase in state aid, expected to provide $12 million to $24 million more for next year.
– Increases in the school system`s property-tax rates because of decreases in the rates for the Chicago School Finance Authority and for debt service, which would provide an extra $27 million to $40 million. Such shifts have been approved in the past by the General Assembly, Burrus said.
– A surplus from the 1987-88 school year budget, projected at $10 million to $25 million.
In addition, Burrus said, the projected deficit would be cut further by savings made after completion of a study to streamline the system`s central administration by eliminating several positions. The report, which also calls for redeployment of 700 employees from the central offices to the schools, is expected by the end of June.
The education reforms envisioned by the school board include increasing early childhood education, reducing overcrowding in classrooms, giving special attention to underachievers, reducing the dropout rate and preparing parents, teachers and principals to play a greater role in decision-making at the local level.
”If reform means pushing authority, responsibility and decision-making down to the lowest level, then those people have to be prepared to accept it,” Burrus said. ”So we have to put some money into preparing teachers, principals and parents.”
Burrus said the programs propose to bring the school system up to national achievement norms within five years.
Although the rosier-than-expected financial outlook would appear to eliminate the threat of a strike, Burrus said the board planned to talk with the teachers union about nonmonetary changes in the contract.
Those discussions would involve union agreement to waive portions of the contract so that experimental school-based management programs could be conducted at selected schools.
On Tuesday, Chicago Teachers Union President Jacqueline Vaughn said the union was willing to offer the waivers, but teachers have not struck a formal agreement with the board.