School Finance

State revenues remain on steady course; K-12 funding debate looms

New state revenue forecasts don’t significantly change the amount of money available to spend on K-12 schools, the issue expected to dominate education debates during the upcoming legislative session.

The quarterly revenue forecasts issued Friday also included the annual projections on school enrollment provided by legislative economists.

Statewide school enrollment projections show increases of 1.5 percent in 2014-15 and another 1.4 percent the following year. Assessed property values are expected to rise 2.2 percent next year, 5.9 percent in 2015 and 2.9 percent in 2016.

Enrollment is important for school districts because it’s the key factor in determining how much state funding they receive. And growth in property values influences how much money districts can raise locally.

Overall, “Colorado’s economy is continuing to expand and should see solid growth through the remainder of 2013 and 2014,” said the forecast from Legislative Council staff economists.

The projection from the executive branch Office of State Planning and Budget also cited growth but noted, “The economy is always vulnerable to adverse, often unexpected, events that could strain budget conditions.”

Economic activity drives state tax revenues, and both forecasts see little change in revenues from September’s predictions. The December forecast sets the table for budget discussions during the first part of the 2014 legislative session, and the March forecast drives final budget decisions.

Do your homework

Natalie Mullis, chief legislative economist, told lawmakers, “Right now is when you have the greatest budget flexibility,” because in future years automatic diversions to transportation and constitutionally required tax refunds may limit spending on other programs.

The December forecast is closely watched by the education community because it includes a school finance projection from legislative staff.

Economist Todd Herreid’s presentation to the Joint Budget Committee laid out these key projections:

  • To maintain current 2013-14 per-pupil funding of $6,652, lawmakers will need to add $55 million to the budget to account for enrollment growth higher than projected last spring, when the budget was written.
  • Schools will need an increase of $260 million over current spending of about $5.5 billion to cover 2014-15 enrollment growth and inflation, as required by the state constitution. That would take average per-pupil funding to $6,845.
  • The increase would have to rise to $297 million if lawmakers want to maintain what’s called the “negative factor” at current levels.

The negative factor is a formula lawmakers have used in recent years to keep K-12 funding at a level necessary to balance the overall state budget. It’s estimated that use of the factor has left school funding at least $1 billion lower than it would have been otherwise.

School districts and education interest groups are going to push hard to reduce the amount of the negative factor, something that might meet resistance from the Hickenlooper administration and the JBC because of their concerns about pressuring other parts of the state budget and about creating a level of K-12 spending that could be vulnerable to cuts during future downturns.

During a pre-session meeting with reporters Thursday, Hickenlooper said he was open to discussions about reducing the negative factor but didn’t indicate how high he might be willing to go.

A key focus of negative factor debates will be the State Education Fund, a dedicated account used to support both base school funding and special programs.

Map
Map shows projected enrollment changes by district. (Click for larger view.)

Because some recent state surpluses have been channeled into the fund, it’s expected to have a balance of more than $1 billion this year. That’s a tempting target for lawmakers interested both in trimming the negative factor and in funding pet projects. But the JBC and the administration want to carry a reasonable State Education Fund balance into future budget years as a cushion.

The legislative staff enrollment projections show continuation of regional differences that have existed for several years.

While statewide growth is projected at 1.4 percent, growth of 1.7 percent is forecast for Denver-area districts, and 1.6 percent is expected for the northern Front Range, while several rural areas are expected to see very small or no enrollment growth.

Future of Schools

CPS $1 billion capital budget hearings: Questions, demands, and mixed feelings

PHOTO: Elaine Chen
Community members gave passionate testimonies at a public hearing at Malcolm X College for the proposed capital budget.

Chicago Public Schools surprised many when it dropped its biggest facility spending plan a few weeks ago with a big “B”—that stands for billion—in the headline.

Considering that the district had planned to spend less than $200 million on capital needs for the 2018-2019 school year, this plan represents a five-fold increase. It relies largely on bonds to pay for building improvements and introduces new schools amid steadily shrinking enrollment, mostly in areas around gentrifying neighborhoods.

Divergent opinions surrounding the capital budget emerged at three concurrent community meetings CPS held Thursday night at City Colleges sites around Chicago: Malcolm X, Harry S. Truman, and Kennedy-King. The Chicago Board of Education is scheduled to vote on the district’s $7.58 billion budget, including the capital plan, on July 25.

At the Malcolm X meeting, CPS Senior Policy Advisor Cameron Mock presented a map showing capital budget projects distributed evenly throughout the city, but, as CPS Chief Financial Officer Jennie Bennett acknowledged, “not all projects are equal.”

Bennett explained that “the allocation of these projects were really in large part due to feedback about need.”

Chalkbeat mapped out the costliest capital projects, and found that the West side, particularly the Southwest side, received the smallest concentration of large investments.

The map shows investments in facility needs over $5 million, all programmatic investments, all investments in overcrowding relief, investments in site improvements over $500,000, as well as sites of the two new classical schools. The map does not show the two new schools in Belmont Cragin and the Near West Side, because the district has not yet specified exact locations. The district also has not yet identified schools for many of its capital projects, such as technology and facility upgrades. See the full plan here.

At Thursday’s hearings, parents from schools that did receive significant funding, such as Christopher Elementary School in Gage Park and Hancock High School in West Elsdon, expressed thanks. But others asked for for more investment.

Residents questioned the plan to build a new $70 million high school on the Near West Side. Lori Edwards, a Local School Council member at Crane Medical Prep on the Near West Side, said that Crane desperately needed air conditioning and heating, doors with windows, and security cameras.

“I’m surprised that we can’t just get basic things instead of building a new high school,” she said.

Questions also surrounded the $44 million assigned for a new elementary school in Belmont Cragin on the Northwest Side to address overcrowding. A sophomore at Prosser High School in Belmont Cragin asked for investment in her school instead. At Prosser, she said, “there needs to be reconstruction in the classrooms, the paint on the walls is falling off.”

Leticia Neri, a mother of two students at Camras Elementary School in Belmont Cragin, was wary of adding a school to the neighborhood. Her children used to attend Burbank Elementary, which is also in Belmont Cragin. When Acero Roberto Clemente, a charter school, opened just two blocks down in 2013, she said that Burbank lost pupils.

However, Mock said the proposed new school was a response to demand in Belmont Cragin. And in fact, several miles north in Uptown, where CPS’s Chief Operating Officer Arnie Rivera and other officials led a meeting Thursday, a handful of Belmont Cragin residents argued in favor of the school.

Parent Mariela Estrada said Belmont Cragin Elementary, which her 9-year-old attends,  is overcrowded. While the district’s formula doesn’t label any Belmont Cragin school overcrowded, the numbers paint a different picture. Belmont Cragin Elementary’s 414 students share a building with Northwest Middle School’s 545 pupils.

“I am really, really grateful right now for what we are getting,” she said.

The North Side, as the map above shows, will receive the most capital funding. Several attendees expressed gratitude for investments in area schools, especially a new ADA compliant gym at McCutcheon Elementary in Uptown, and an expanded test-in Decatur Classical School program in West Ridge, that will add seventh and eighth grades. Students have to test into the city’s five highly competitive classical schools, and hundreds are turned away every year.

Even so, not all North Side residents felt their schools would receive what they need, and many questioned CPS’ process for planning improvements.

A mother of a student at Schurz High School, in Old Irving Park, thanked CPS for a plans to install a new athletic field, but mentioned the school’s leaky roof, faulty heating system, green and black mold under carpets, and peeling paint in the auditorium. “It’s gross,” she said.

Parent Dawne Moon, said Kilmer Elementary School in Rogers Park is “not currently a safe environment.” Moon, a Local School Council member,  complained of rusted lockers, “bathrooms that smell like urine, even after they are cleaned,” temporary covers over holes in the roof that keeps water from pouring into classrooms, and of bricks falling from the ceiling in the school’s gym.  

“We can hope that the next brick doesn’t fall on a kid,” she said.

Betsy Vandercook, co-chair of the education committee at Network 49, a progressive neighborhood group based in Rogers Park, said schools in her neighborhood would get less than what adjacent communities like Edgewater and West Rogers Park would receive.

“Rogers Park is not, for whatever reason getting the same resources that many other North Side communities are getting,” she said about the capital budget proposal. “Take this back, look at it again, look at what is and isn’t needed.”

budget season

New budget gives CPS CEO Janice Jackson opportunity to play offense

PHOTO: Elaine Chen
Chicago Public Schools CEO Janice Jackson announced the district's $1 billion capital plan at Lázaro Cardenas Elementary School in Little Village.

Running Chicago’s schools might be the toughest tour of duty in town for a public sector CEO. There have been eight chiefs in a decade – to be fair, two were interims – who have wrangled with mounting debt, aging buildings, and high percentages of students who live in poverty.

Then there’ve been recurring scandals, corruption, and ethics violations. Since she was officially named to the top job in January, CEO Janice Jackson has had to clean up a series of her predecessors’ lapses, from a special education crisis that revealed families were counseled out of services to a sexual abuse investigation that spotlighted a decade of system failures at every level to protect students.

But with budget season underway, the former principal finally gets the chance to go on the offensive. The first operations budget of her tenure is a $5.98 billion plan that contains some good news for a change: 5 percent more money, courtesy of the state revamp of the school funding formula and a bump from local tax revenues. CPS plans to funnel $60 million more to schools than it did last school year, for a total of $3.1 billion. Put another way, it plans to spend $4,397 per student as a base rate — a 2 percent increase from the year prior.

CPS’ total budget comes out to $7.58 billion once you factor in long-term debt and an ambitious $1 billion capital plan that is the focus of a trio of public hearings Thursday night. When it comes to debt, the district owes $8.2 billion as of June 30, or nearly $3,000 per every Chicago resident.

“The district, without a doubt, is on firmer footing than it was 18 months ago, but they’re not out of woods yet,” said Bobby Otter, budget director for the Center for Tax and Budget Accountability. “When you look at the overall picture (the $7.58 budget), they’re still running a deficit. This is now the seventh year in a row they are running a deficit, and the amount of debt the district has, combined with the lack of reserves, leaves them with little flexibility.”

Earlier this week, standing in front of an audience of executives at a City Club of Chicago luncheon, Jackson acknowledged that it had been an “eventful” seven months and said she was ready to focus on strategies for moving the district forward. “I won’t be waiting for next shoe to drop or wasting time and resources waiting for next problem. I want to design a system to educate and protect children.”

“I’m not in crisis mode,” she added.

Here’s what that looks like in her first year when you just consider the numbers. The biggest line items of any operating budget are salaries, benefits and pensions: Taken all together, they consume 66 percent of CPS’ planned spending for the 2018-2019 school year. Rounding out much of the rest are contracts with vendors ($542.6 million, or 9 percent), such as the controversial janitorial deals with Aramark and SodexoMAGIC; charter expenditures ($749 million, or 13 percent); and spending on transportation, textbooks, equipment, and the like (12 percent).

A closer look at how some of those items are allocated offers a window into Jackson’s vision. The Board of Education is scheduled to vote on the plan July 25.

Investing in choice

Earlier this month, the district announced a nearly $1 billion capital plan, funded by bonds, that would support new schools, technology upgrades, and annexes at some of the district’s most popular campuses. The operating budget, meanwhile, accounts for the people and programs driving those projects. It proposes nearly doubling the staff, from 10 to 17, in the office that manages charters, contract programs, and the creation of new schools. It reestablishes a chief portfolio officer who reports directly to the CEO. And it adds expands access to International Baccalaureate programs and Early College STEM offerings. In a letter at the beginning of the 2019 Budget Book, Jackson said such expansions “move the district closer to our goal of having 50 percent of students earn at least one college or career credential before graduating high school.” 

Advocating for students

The budget seeds at least two new departments: a four-person Office of Equity charged with diversifying the teacher pipeline, among other roles, and a 20-person Title IX office that would investigate student abuse cases, including claims of student-on-student harassment.

Leaning into high schools

Fitting for a budget designed by a former high school principal – Jackson was running a high school before age 30 – the plan leans in to high schools, establishing $2 million to fund four new networks to oversee them. (That brings the total number of networks to 17; networks are mini-administrative departments that track school progress, assist with budgeting, and ensure policy and procedures are followed.) And it earmarks $75 million across three years for new science labs at neighborhood high schools. What’s more, it supports 10 additional career counselors to help campuses wrestle with a graduation mandate – set forth by Mayor Rahm Emanuel – that seniors have a post-secondary plan to graduate starting with the Class of 2020.

Throwing a lifeline to small schools

The budget also sets forth a $10 million “Small Schools Fund” to help schools with low enrollment retain teachers and offer after-school programs. It also earmarks an additional $5 million to help schools facing precipitous changes in enrollment, which can in turn lead to dramatic budget drops.   

Supporting modest staff increases

After a round of layoffs were announced in June, the budget plan adds at least 200 teachers. But the district would not provide a clear accounting of whom to Chalkbeat by publication time. Earlier this week, it announced plans to fund additional school social workers (160) and special education case managers (94).

The district plans to add positions for the upcoming 2018-2019 year.

As Chicago Teachers Union organizer and Cook County Commissioner candidate Brandon Johnson pointed out in an impromptu press conference earlier this week in front of district HQ, the budget is still “woefully short” on school psychologists, nurses, and counselors. And it doesn’t address the calls from parents to restore librarians and instructors in such subjects as art, music, physical education — positions that have experienced dramatic cuts since 2011. “What is proposed today still leaves us short of when (Mayor Emanuel) took office,” Johnson said. “The needs of our students must be met.”

Principal Elias Estrada, who oversees two North Side schools, Alcott Elementary and Alcott High School, said he was still figuring out how the additional staffing would work. He’s getting another social worker – but he oversees two campuses that sit three miles apart, so he figures he’ll have to divide the person’s time between campuses. Estrada asked the board at Monday’s budget hearing to help him understand the criteria it uses to determine which schools get extra staff or additional programs, like IB. “I need a counselor, a clerk, and an assistant principal,” he said; currently those positions also are shared between the elementary and the high school.

After the meeting, he said that schools might have gotten slightly bigger budgets this year, but the increase was consumed by rising salaries and he wasn’t able to add any positions. What’s more, his building needs repairs, but it didn’t get picked for any of the facilities upgrades in the $1 billion capital plan that accompanied the budget.

“What is the process?” he asked. “The need is everywhere.”

At two public hearings on Monday, fewer than a dozen speakers signed up to ask questions of the board, central office administrators, or Jackson.

To see if your school is getting one of the newly announced positions or any funding from the capital plan, type it in the search box below.