Chicago Public Schools considers tax increase

Officials in financially strapped system could seek to collect $100 million more in property taxes

hicago Public Schools officials are looking to collect $100 million more in property taxes and seek further cuts at central office and in middle management positions as they try to bridge a gaping deficit.
Chicago Public Schools officials are looking to collect $100 million more in property taxes and make further cuts at the central office and in middle management positions as they try to bridge a gaping deficit.
The district will have its Board of Education consider whether to approve the maximum property tax increase allowed under state law, which would mean higher tax bills for residents, although estimated average increases still are undetermined.
"The big question about property taxes, that's a decision that needs to be made by the board," said Chief Administrative Officer Tim Cawley.
In December, CPS filed notice that it would levy taxes up to the maximum allowed by the tax cap law, as it does every year to leave its options open. By spring, taxing bodies can opt to reduce the amount that will be collected, said Courtney Greve, spokeswoman for the Cook County clerk's office.
In the last two years, Greve said, CPS opted not to collect maximum levels, which are capped by the rate of inflation. But with the economy picking up again and facing what schools chief Jean-Claude Brizard has called a "historic" deficit, board members may decide to collect as much as they can this year.
The new administration already has announced $75 million in cuts at its central office and other measures that include downsizing the bus fleet, reducing underused space in schools and cutting down custodial service. This month, the board also did away with 4 percent across-the-board raises for teachers and other union members, cutting the $712 million deficit by an additional $100 million.
Managers in the central office and throughout area offices have now been told to look closely at each position to determine what can go. District officials say they remain committed to keeping class sizes intact, and not reducing their funding for preschool programs, magnet schools and school-run anti-violence programs. Everything else is open for some budget slashing.
"There are lots of places to cut, and the district needs to look at those before they raise taxes," said Julie Woestehoff of Parents United for Responsible Education. "Every year people in central office and area offices are worried about losing their jobs but it never happens. The system has not been willing to make the changes to be more efficient."
With another year of delayed payments from the state, the district might also take out a short-term loan to have cash on hand to pay the bills. Last year, the district refinanced a bond to get $160 million; this year official are considering a line of credit to give them more than $300 million to cover what's owed by the state as of July 1, Cawley said. The money owed to the district is $85 million more than what was owed last year, officials said.
As a federal infusion of stimulus dollars is also drying up, the deficit this year has grown from last year's $370 million budget hole. Only $50 million of last year's $104 million in one-time educator job funds remain for use in 2012, officials said. Trying to balance the budget last year, the district also drained its reserve fund down to $190 million. Further cutting into reserves might be another option this year.
Cawley said CPS will pay $70 million to the Chicago Police Department this year because of money owed from previous years. He said Thursday that the district is supposed to be paying the agency $25 million a year to supply officers for schools — another area that may see some cuts.
"This is a significant expenditure, and we need to look at which schools need this, which schools don't and how can we be more creative for the schools in the middle," Cawley said.
The district has to produce a final budget proposal by the end of July.