Saturday, July 23, 2016

CPS Telling Truth?

Is CPS Telling the Truth About the Budget?
By Jim Vail

Raise Your Hand CPS Budget Forum left to right WBEZ Sarah Karp, State Rep Greg Harris, Ald. Rosa, Ald. Pawar, State Rep Ann Williams and Dir. Center for Tax and Budget Accountability Ralph Martire. (Photo Jim Vail)

Is the Chicago Public Schools budget just a lie, and are the people supposed to just believe this lie or do something about it?

That idea ignited a robust discussion on the Chicago Public Schools financial situation. State reps Greg Harris and Ann Williams, Aldermen Carlos Rosa and Ameya Pawar, Ralph Martire, executive director of the Center for Tax and Budget Accountability and WBEZ reporter Sarah Karp participated in a forum on CPS finances sponsored by Raise Your Hand at Amundson High School on July 18.

“We in the media are struggling to answer this question,” Karp said in her opening address. “The spreadsheet of school by school budgets released makes absolutely no sense.”

She added that CPS keeps telling her that there is a lot they cannot explain when it comes to the budget.

In fact, those who have followed the CPS line on budgets know that the district under the mayor’s direction has consistently put out doomsday scenarios for years that the system faces a billion-dollar deficit, only to miraculously report a hefty surplus at reporting time. 

Ald. Rosa said CPS cannot get away with saying it will cut its way out of this current deficit – if one can believe CPS – but it is up to the people to fight to prevent such cuts.

“Any parent or teacher will say you cannot cut anymore,” he said at the forum. “We know we didn’t get enough from the state. Now they say we need to cut more.”

Rosa said the schools need to raise local revenue such as the employer head tax for companies with more than 50 employees, [that was eliminated in 2014 and] a state progressive income tax which could raise $1.1 billion, and a gradual income tax rather than overly relying on property taxes which favors richer school districts.

However, Martire from the Center on Tax and Budget Accountability, poured cold water on wishing for progressive revenue on income tax and a millionaire’s tax because those proposals don’t have a political chance.

“You won’t solve your problems by taxing millionaires because they tried that before and they never had the votes,” Martire said, adding that Illinois is the worst state for funding its schools.

Martire, who stressed that his organization is bi-partisan, said the way to solve the state’s financial woes is to raise the state sales tax from 3.75 to 5.2% and expand the state sales tax base to include the service sector. He said Illinois, with one of the nation’s lowest sales tax rates, only taxes goods, while 73% of the state’s economy is generated by services, which is not taxed at all.

The independent financial expert said that of the state’s budget and its current $10 billion deficit, projected to be $15 billion in the near future, 90 percent is used to fund education, social services, health and public safety, which will all be cut if new revenue isn’t raised.

“This is the fifth richest state in the richest nation in the world, and we’re talking about cutting social services?” Martire said.

One audience member asked if Chicago should implement a financial transaction tax like in London. While Ald. Rosa agreed the city should, Martire said no because it is just not politically possible for Chicago to be the first city in the country to do so. He said a financial tax should be raised at the federal level.

All were in agreement that the city of Chicago has to kick in more property taxes to fund its schools like all the other school districts.

Alderman Rosa said declaring a TIF surplus, a surplus of extra taxes, is a tricky political game because the mayor and the aldermen who have control over their ward’s share of the TIF monies would be loath to give that up.

“Before the federal government gave money to the cities,” Pawar said. “TIFs made up that money, but it created inequities in wealthier areas of the city.”

Pawar said he built an addition to Coonley Elementary School in Lincoln Square with TIF funds, and thus the trick is, “you have to do right for the city, and do right for the home.”

However, the alderman said he has put every TIF project on hold during the current crisis, and will only release money for the schools or parks.

Ald. Pawar said while he is against building the proposed selective-enrollment Obama Prep High School during this crisis, the fact is many middle class families leave the city seeking better schools.

Ald. Rosa said he is against the city building any more charter schools, and Martire said that it costs the city more to finance charter schools, which do no better than the public schools.

He noted the city built 47 more schools even though the system lost 32,000 kids over the last ten years.

It appeared that many questions asked in the audience about the budget deficit and how it affects their local schools could not be answered by the forum’s participants.   

What about abolishing the state charter commission which forces CPS to continue financing charter schools it wants to close? Or who is winning during this crisis when the city has to borrow $725 million at 8.5% interest (earning the creditors roughly $500 million)?

The aldermen agreed an elected school board would be one way to take power away from the mayor and put it into the people’s hands to run the schools. But to do this, and not allow the city and its financial predators to force cuts on the schools, it is up to the people themselves to fight back.

“(The politicians) need to hear from you,” Rosa said.  

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