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Education Thu Apr 15 2010
Teachers union leaders angrily accused D.C. Schools Chancellor Michelle A. Rhee of unethical behavior Tuesday by failing to disclose the discovery of a $34 million surplus in the school system budget in February, three months after laying off 266 teachers because of what she described as a budget shortfall.
News of the surplus comes at a critical time for Rhee and the teachers union, who just last week announced a tentative contract agreement that ended more than two years of often rancorous bargaining. The two sides were close to a deal late last summer when union anger over Rhee's plans for layoffs delayed its completion.
Last Thursday, Chicago Public Schools CEO Ron Huberman announced a $900 million projected deficit for next year. Huberman's presentation[ii] specifically singled out "increases in pension costs" and "increases in teacher compensation" as the main causes of this crisis.[iii]
Can we trust this announcement? No. This is a political announcement designed to build public support for attacking teachers. Though there is a recession, and we expect there to be some deficit, Huberman's numbers are suspect.
- For the past eight years the BOE has projected a deficit in January or February only to show surpluses in the actual audited budget as presented in August.[iv] These discrepancies have averaged over $300 million each year.
- No transparency--the presentation that we have been shown is not a budget, does not reveal any of the underlying assumptions on which the projection has been based, and does not seem to add up to $900 million, in any case.[v]
- The percentage CPS spends on salaries has actually shrunk since 2004, while the amount of the reserve (fixed charges) has ballooned to over 8% of the budget. [vi] That's right, we getting a smaller piece of the pie, but being blamed for the financial troubles.