Yes, aside from D204 and our State, Chicago is a mess as well. This is the perfect storm of debt, leverage, over promising and overspending. This is happening all over the country. The states are estimated to have deficits of about $365 billion over the next three years, and imo that is underestimated by 30-50%.
Everything in this country hinges on wages in the private sector and the trend on those is down. There is no way America can get back into balance until the public sector stops acting like there is no limit to the promises it can make. Those days are over. Once you realize that, stop making promises you can't pay for and start cutting, the better off everyone will be.
As far as the unions go, they should understand that just like America walked away from the U.S. car companies when the competition was better, they will walk away from other things as well...as the trade shows are now walking away from Chicago. The current structure of education is already starting to crack as well with parents challenging the tenure and seniority rules. Eventually productivity will have to be addressed as well. Why not use Rosetta stone to assist in teaching language. Can history and geography be
tough (taught) from interactive software? My bet is in the future it will be.
online.wsj.com/article/SB10001424052748703315004575073561669221720.html?mod=djemCJ_h#printModewww.publicbroadcasting.net/kplu/news.newsmain/article/1/0/1532269/KPLU.Local.News/With.Layoffs..Teacher.Seniority.Reconsideredspecial.registerguard.com/jobs/teacher-seniority-rules-challenged/pattyebenson.wordpress.com/2010/02/21/teacher-layoffs-should-seniority-rule/www.citytowninfo.com/career-and-education-news/articles/looming-teacher-layoffs-call-seniority-rules-into-question-10022201-------------------------------------------------------------------------------
www.chicagobreakingnews.com/2010/02/chicago-public-schools-chief-warns-of-billion-dollar-deficit.htmlChicago Public Schools chief warns of billion-dollar deficit
February 25, 2010 9:30 PM | 36 Comments | UPDATED STORY
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.
Click HERE to read Huberman's memo on the possible CPS deficit.
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 want to make it clear that we will not agree to any proposal that either destroys our contract or fails to maintain the integrity of our pension system," union President Marilyn Stewart said in a statement. "Nor will we tolerate the implied threats being made by Mr. Huberman that he may have to cut programs and services for our students or lay off teachers."
Huberman said any candidates for union positions who felt that they couldn't negotiate with the district were "unrealistic." He said that without union support on pension changes, the district would lobby Springfield alone.
Huberman can declare a fiscal emergency, which would force the union back to the bargaining table. But Rachel Resnick, who heads labor relations, said such a move was premature because there had been no formal meetings between the district and the union.
Next year, the district will pay teachers an additional $169 million under their contract, which includes a 4 percent cost-of-living raise. The underfunded teacher pension will cost the school district a whopping $587 million next year, a 91 percent increase from this year.
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.
Those higher payments come at a time when the district's revenue has dropped and raising taxes can offer only marginal help. Huberman is hoping legislators will grant the district a temporary reprieve from the sharp increase.
Experts warn against such a move because it would only put off the predicament.
"They can't solve that problem by not funding the pension fully," said Laurence Msall of the Civic Federation. "To skip any more payments to the Chicago Public Schools pension system will only increase the cost to the system and make it that much more difficult in the future [for taxpayers]."
While other districts in the state are mandated to give notice this spring of proposed layoffs for next fall, CPS does not have to follow that schedule, leaving the district more time to figure out a budget strategy.
The district was projecting a $700 million shortfall for next year if Springfield kept funding at current levels, but a preliminary budget outlined by Gov. Pat Quinn on Wednesday would cut another $275 million in district funding, Huberman said at a news conference Thursday.
Huberman used a PowerPoint presentation to offer examples of the difficulty in cutting such vast amounts of money from the district's $6.8 billion annual budget.
For instance, raising class sizes to 40 students, which he said was merely hypothetical, would save the district only $205 million. And closing 100 schools and opening no new schools, including charter and turnaround schools, would realize only $89 million in savings.
One potential bright spot is that CPS balanced this year's budget without $200 million in state funding it has not yet been paid. The state, suffering its own financial woes, is behind in its bills to the tune of $4.2 billion, including some $725 million owed to schools. If CPS ultimately receives the promised funding, it will have an extra $200 million for next year's deficit.
-- Azam Ahmed
