Solving Chicago’s Billion Dollar School Debt
The French Market benefited greatly from TIF money
About a decade ago, my financial outlook was really bleak. I had gone back to school and financed a middle class lifestyle on a part-time retail job selling comic books and credit cards. The result was between student loans and credit, I owed about $36,000. I dug my way out of the big hole in a couple of ways. I traded in a life insurance policy that was no longer needed and picked up a quick $4,000 that was immediately spent paying down the debt. I stopped using my credit card and I paid cash for everything. I set a budget for everything I spent and I started saving for things a year ahead of time. Christmas savings began December 26th and I was able to cover vacations and big expenses without using the credit card. I brought down my debt despite paying for a master’s degree because I really took a look at my books and saw where I was wasting money. That was the key to spending cash.
There’s now a big battle brewing in Chicago because Ron Huberman has announced that the schools are nearly a billion dollars in debt. Teachers are outraged because this story is right on the tail of a Tribune report showing that Huberman had not one, but two company cars. Taxpayers are outraged because they feel that the district went into debt paying for the teachers. They’re both wrong.
Thanks to Renaissance 2010 and the inept inaction of the Chicago Teacher’s Union’s Marilyn Stewart administration, there are now less than 30,000 members in the Chicago Teacher’s union. That means if every teacher in the city took a $30,000 pay cut you still couldn’t pay off the debt. There’s also the issue of pension. As the Tribune put it, “The pension’s status is the result of many factors. A steep market decline, a large chunk of new retirees and years of the district making no contribution at all have left it about 74 percent funded. State law requires the pension to be funded at 90 percent, and the district is now facing steep payment increases to catch up.”
It’s hard to blame pension costs for the budget when you haven’t been paying your contribution. Likewise, Ron Huberman doesn’t have a one billion dollar car. What he does have is an awful lot of people that he brought over from the CTA that he is now paying over $120,000 a year too. Bureaucratic waste has skyrocketed during the Huberman administration.
Ben Jovarsky from Chicago’s best investigative newspaper The Reader comes up with much better places for the budget axe to fall, “Huberman and his aides also might want to look at cutting back on contracts to outside vendors (about $696.6 million has been set aside for that) and trimming a few of the extraneous central office divisions, like the Office of Autonomy. I’m not sure who it’s autonomous from—certainly not Huberman or Mayor Daley—but it has seven employees and an annual budget of $1.4 million. …. And then of course there are the …TIF slush funds controlled by the mayor, which aren’t itemized on property tax bills. Last year alone, the TIFs siphoned about $250 million in property tax dollars out of CPS’s supposed share.”
So assuming Huberman could cut 30% of the budget on outside contractors and the central office tightens its staffing and Daley gives back the TIF money I think we can safely project about $500,000 in savings. The rest can come from one simple item in the budget. As CORE member Xian Barrett pointed out when speaking to Operation PUSH this year, “Look at CPS’ own budget which this year boasts a $422 million increase in ‘Other Charges’.”
Of course this is Chicago we’re talking about. The latest rumor I heard was that they would ask teachers to work 15 days without pay and give them one week of paid vacation instead of two. This is basically a 10% salary cut. A 10% salary cut should cover about half of the money that Daley has deprived the schools of through his TIF scheme. How has that money been used? According to Jovarsky, “n recent years, the CDC has approved $35 million in TIF money to help United Airlines move into new offices downtown, $6 million to help MillerCoors do the same, $8 million to lure the French Market to the Ogilvie Transportation Center.” I guess a city needs to have priorities.
Tags: Chicago, Chicago Public Schools, Ron Huberman, School Budget Crisis, TIF money
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March 1, 2010 at 11:19 pm
The fastest fixable factor in the Chicago schools is the Chicago Teachers Union.
CTU needs new leadership ASAP.
The constant mindless slandering of Chicago teachers makes as much sense as if we blamed the nurses for the failures of the health care system. Like nurses, teachers are the first responders, and like nurses, Chicago teachers include innumerable everyday heroes. The idea that anyone who is Not a teacher can do the job better than anyone who IS a teacher is just plain silly.
The CTU candidate for president – with the vision, brains and courage to do the job on the level Chicago has not seen since Jackie Vaughn – is Karen Lewis of CORE Chicago Teachers (Caucus of Rank and File Educators).
Check Karen out for yourself in this video:
When you see how things are and how they Should be, visit the CORE website and get inspired again.
http://coreteachers.com/
You don’t have to be a teacher to step up to the plate for Chicago education. Join CORE and be part of the solution.