Minda Corso

Chicago Public Schools: The look, the plunge, and the tiny poof

In Standards and Accountability on September 21, 2012 at 11:29 am

By: Mike Thomas

Remember the Road Runner cartoon.

Wile E. Coyote runs off the cliff edge.

His legs churn furiously to gain traction in midair.

Then comes the look of realization, followed by the downward plunge and tiny poof.

Chicago Public Schools has run off the fiscal cliff.

Realization began setting in a while ago. 

That is why the Chicago Teachers Union exploited the presidential election to strike and lock in every dollar, every perk and every protection possible before the plunge.

CPS is a government jobs program for adults first, and a place to educate children second.

Consider this fiscal outlook, gleaned from various news sources including the Chicago Tribune and The New York Times:

  • Between 2001 and 2011, enrollment decreased by more than 22,000 students while general operating expenses grew by $2 billion. This translates into 5 percent fewer kids and a 47 percent jump in expenses, much of that in salaries and benefits.
    • The district closed a $665 million deficit this year, draining reserves, and faces a billion-dollar deficit next year.
    • Moody’s recently downgraded $5.6 billion of CPS debt, slapping on a negative outlook that means another downgrade is in the offing.
    • The Chicago Teachers’ Pension Fund has about $10 billion in assets while paying out more than $1 billion a year in benefits. The plan’s unfunded liability is approaching $7 billion with CPS estimating its pension costs will exceed a half-billion dollars by 2014.
      • CPS has agreed to hire almost 500 new teachers at a cost of about $50 million a year, and give raises that will cost another $295 million over four years.

The inevitable result of all this will be even greater inefficiencies, with more and more money diverted away from the job of educating kids.

Now add charter schools, which are not burdened by union contacts or past budgeting abuses. That makes them more efficient. They also are in more in demand, with a waiting list of 19,000 kids. Charter students didn’t miss a day during the strike. That’s a great sales pitch.

Chicago has 110 charters, with plans for 60 more. They will siphon off even more kids from a student population that is in decline anyway.

The cost of maintaining the old, inefficient CPS infrastructure – buildings, bodies and pensions – will get even more out of whack with the cost of charters. As more charters open more CPS schools will close, creating a feedback loop that will shift more and more teachers into non-union environments.

CTU is following the same business model that destroyed so many private unions and crippled their employers. Admittedly you can run this kind of operation a lot longer in the public sector. But at some point something has to give.

The strike is over, but the strike was only the beginning of this saga.


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