Friday, February 26, 2010

CPS faces $1 billion deficit

Chicago Public Schools is facing a deficit of up to $1 billion next year that can be reduced only through a combination of pension reform, union concessions and job cuts, schools chief Ron Huberman said Thursday.

Without all three measures in conjunction, Huberman said, teacher layoffs, increased class sizes and cuts to important programs are distinct possibilities.

"These are last-case, worst-case scenarios," Huberman said.

The grim 2011 budget forecast takes into account a skyrocketing pension obligation next year and contractual raises for teachers that together increase costs by about $450 million over this year, district officials said.

The dire prognosis comes in the middle of an already tough budget year that started with a half-billion-dollar deficit. To balance this year's budget, the district trimmed millions in programs, laid off 536 employees and mandated six furlough days for nonunion staff.

Huberman announced Thursday another three weeks of furlough days and 500 more layoffs for nonunion staff to better position the district for next year's deficit and the impending teacher negotiations. Though the estimated $25 million in cuts were not necessary to balance the budget this year, officials said they showed fiscal responsibility.

Pushing through changes to the pension system and renegotiating union contracts come at a difficult time politically, with the Chicago Teachers Union elections scheduled for later this year. While Huberman said that he hoped the union would work with him on the issues, the union balked at the suggestion of opening its contract.
I had to really rack my brain at the last time the public schools announced that they had a significant deficit. Perhaps I haven't always paid much attention, but this is the first time in over a decade that I recall. In this current economic environment a lot of public agencies have to tighten their belts. CTA is the only governmental arm that has to face fiscal difficulties.

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