Budgeting for Every Child

A Citizen’s Guide to
Understanding the Chicago
Public Schools Budget

Chicago Public Schools

1
 Our $6.2 billion budget — and you
This guide is designed to introduce
Chicago’s Budget Compares to Major
you to the Chicago Public Schools
Corporations’
(CPS) budget and help you under-
stand how our public schools are $6.2 $5.4 $5.5 $5.8 $5.9 $6.0
billion billion billion billion billion billion
funded. As the nation’s third-largest
school district with more than
600 schools, CPS is responsible
for more than 400,000 students
and has a total 2008–09 budget Source: http://money.cnn.com/magazines/fortune/
fortune500/2008/full_list/401_500.html.
of $6.2 billion. Our budget is similar
to the states of Delaware’s and While these companies are concerned with making profits, our objective is much
broader: to provide excellence and equity in education so that every child in
Rhode Island’s as well as to some every school is on track to graduate prepared for success in postsecondary
education and employment.
of the largest companies’ in the
In a district this big, the budget may seem hard to understand. But just like you do
United States. at home, we use the budget for multiple purposes: to track income and spending; to
help manage priorities; to plan for the future; and to measure financial performance.
The purpose of this guide is to (1) explain the budget and the process we use to cre-
ate it and (2) provide Chicago’s citizens — parents, voters, taxpayers and residents
— with information on frequently asked budget questions:

■■ Where does the money come from?

■■ What are the district’s expenses?
■■ How are resources allocated to my child’s school?
■■ How does the district decide which programs to invest in?
■■ How does the district pay to construct and renovate schools?
For more in-depth and detailed discussion, financial information and reports,
please see our complete Fiscal Year 2009 Budget Book, which is available at
www.cps.edu/About_CPS/Financial_information/Pages/Financialinformation.aspx.

Our goal is to become the best urban school system in America. To reach that goal,
we must ensure that the district’s budget reflects our educational priorities —
priorities based on the learning needs of our students. With your support, we can
Chicago Public Schools

make it happen.

Beth Swanson
Budget Officer

2
Where does the money come from?
The $5.2 billion operating budget for Local Sources Provide Almost Half of
the 2009 fiscal year (which covers CPS Revenue 3%
Fund balance
the 2008–09 school year) is funded
through a combination of sources.
18%
Federal
Local revenue 37%
The largest source of revenue, 43 percent, comes Property
taxes
from local sources. The majority of this is from local
property taxes. Other local resources include personal
property replacement taxes, or PPRT (a corporate 36%
tax tied to profits); interest income; lunchroom fees; State
rental income; and other miscellaneous items. revenue
3%
Other local
State 3%
Personal property
The amount of state revenue that each school district replacement taxes
receives is based on a complex formula that considers FY2009 operating budget by resource
the number of students, special needs of the district,
household income levels and many other factors. The
state legislature determines this formula. Federal
Illinois contributes less toward the overall cost of Most federal revenue is distributed through Title I (No Child Left Behind) to provide
K–12 public education than almost every other state extra support for low-income children. The federal government also pays for free or
in the country. Until there is education funding reduced-price meals for children from low-income families. Declining student enroll-
reform, Chicago taxpayers will continue to carry the ment over the past several years has reduced the amount of state and federal revenue
majority of the costs. (More on page 10.) that we receive and the resources that are available for each school. Further, we have
limited flexibility in how we spend federal revenue (and a portion of the state revenue).
The money can be used only for certain types of expenses, such as reading and math
instruction and teacher professional development.

Fund balance
To help fill the remaining gap between estimated revenues and expenditures, it is
necessary to draw from our operating fund balance. The Chicago Board of Educa-
tion has been carefully accumulating a general fund balance, generated by unspent
funds, over a number of years to protect against unforeseen financial emergencies.
This safety net will be reduced by approximately 25 percent to help balance the
budget in FY2009.
Chicago Public Schools

Operating funds pay for the day-to-day operations associated with running the school system, such as salaries, textbooks,
furniture, utilities and transportation. These funds are generated from property taxes and state and federal revenue.

3
 Where does the money go?
Overall spending
Because of continued state under-
funding and declining enrollment,
it is especially important to budget
our dollars where they will make
the biggest difference for children
— in classrooms and schools.
Salaries and Benefits Make Up Two-Thirds of the Budget
51%
33% Salaries
Nonpersonnel
16%
Benefits
FY2009 operating budget by expense
Chicago Public Schools
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One way to look at spending is by types of spending. The majority of the
operating budget (67 percent) pays for salaries and benefits for our more than
43,000 employees — 87 percent of whom are located in the schools, serving
our 405,000-plus students.
Only 4 percent of our employees are in the central office, supporting administrative
and programmatic functions. The remaining citywide positions are mainly service
providers who travel to multiple schools.
Salaries
The Chicago Teachers Union contract determines the starting salary of teachers.
Teachers earn more as they gain experience and tenure. Teachers also earn more if
they obtain advanced credentials, such as master’s degrees, doctorates or National
Board Certification.
1,800 – Administrative positions
3,700 – Citywide personnel
13,900 – School support
personnel
600 – Principals
700 – Assistant principals
87% – School-
based
positions
22,800 – Teachers
FY2009 CPS positions
The average CPS teacher salary for 2007–08 was
$65,000. The average salary for CPS principals and Teacher Pension Costs Up
assistant principals was $116,000. Dramatically
School support personnel include teacher aides, $ 425
security officers, school clerks, cooks and janitors.
400
Citywide personnel are primarily teachers, coaches 375
and special education staff who travel to multiple
350
schools. These also include nurses, social workers,

Dollars in millions
psychologists, speech pathologists, physical therapists 325
and teachers who teach temporarily homebound 300
students. 275
250
Benefits
225
Benefits include Medicare/social security; pension;
health, dental and life insurance; and unemployment 200
compensation. When individuals’ salaries increase, 175
the costs of their benefits increase as well. 150
’96 ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09
A major challenge is the dramatically increasing pen-
Fiscal year
sion costs for our retirees. Although the state governs
how CPS funds the Chicago Teachers’ Pension Fund, it
provides minimal support.
Other expenses
To cover the gap, CPS must increase our contributions
to the fund every year, amounting to approximately Nonpersonnel costs make up the remaining 33 percent of the budget and include
$150 million in FY2009 — close to the cost of our the costs of contracted custodial services, utilities, transportation, and funding for
after-school programs and the district’s literacy and charters and other nontraditional schools. Just like salaries and benefits, nonper-
math initiatives. sonnel expenses increase annually.

Rising fuel costs mean more money is required to fill the gasoline tanks of school
buses, and higher natural gas and electricity costs mean it is more expensive to
heat schools during the winter (and consider that there are more than 600 school
buildings in the district).

Chicago Public Schools

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 Where does the money go? (continued)
spending at the schOOl level
Another way to look at spending
is by how money is distributed
to schools. Two basic factors
determine how much money
each school receives:
■■ The number of students at the school, and
■■ The special needs of these students, such as pov-
erty, disabilities and limited English proficiency.
traditiOnal public schOOls: These make
up the majority of CPS schools (86 percent) and
include neighborhood schools, magnet schools,
alternative schools, vocational schools, military
schools, achievement academies, selective
enrollment schools, math/science academies
and special education schools.
nOntraditiOnal public schOOls: These
include charter schools, which are indepen-
dent public schools; contract schools, which
are managed by independent nonprofit orga-
nizations; and performance schools, which are
operated by CPS with CPS teachers and staff.
These schools have increased flexibility but,
like all schools, are accountable for student
Chicago Public Schools
achievement. They are governed by an agree-
ment or plan entered into with the Chicago
Board of Education.
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Allocating school resources
Student enrollment is the main factor driving school budgets, which is why declin-
ing enrollment affects the resources available to schools.
At traditional schools, the number of students projected to enroll in the fall deter-
mines the number of teachers and support staff each school receives based on for-
mulas. That is, enrollment translates into staff positions, which translate into salaries
and benefits, which translate into budgets. For instance, an elementary school with
461 general education students (56 kindergarten, 151 primary and 254 intermedi-
ate/upper) is allocated positions for one principal, 15 general teachers, 2.5 ancillary
teachers, one counselor, one clerk and so on. Nonpersonnel items such as textbooks,
supplies, repairs and equipment also are allocated on a per-pupil basis.
Although the formulas mainly drive how these schools must spend their money,
every year principals, teachers and local school councils work together to prepare
budgets that reflect schools’ specific needs for the upcoming year. The budgets
are based on the School Improvement Plan for Advancing Academic Achievement,
called the SIPAAA.
Nontraditional schools also receive funds based on their enrollment, but they
get a specified amount per student, which pays for all of their operating expenses,
including salaries and benefits. Funding is not tied to positions, which gives these
schools much more flexibility in deciding how to spend their budget dollars.
86 Percent of CPS Schools Are Traditional
8
Contract schools 16
Performance schools
67
Charter
schools
576
Traditional
schools
FY2009 CPS schools
Providing additional resources
Schools also receive additional resources to serve special education students
and students with limited English proficiency. At traditional schools, a fund-
ing formula that takes into account student enrollment and specific school needs
determines funding for support-services personnel, building operations and mainte-
nance, custodial supplies and custodial staff, and security personnel.

Depending on the percentage of its students who receive free or reduced-price

lunch — which can be substantial — a school also may receive additional dollars
from either the state or federal government. These discretionary funds are used to
help traditional schools fulfill their goals as outlined in the SIPAAA.

Based on their enrollments, nontraditional schools also receive these additional

resources.

Schools receive additional resources in excess of $400 million to support other

specific school needs and districtwide initiatives. Some examples include early
childhood education, summer school, after-school, literacy, desegregation, evening
and education-to-career programs.

Student enrollment translates into

staff positions — a principal, teachers,
counselors, clerks, etc. — which translate
into salaries and benefits, which
translate into budgets. That is why
declining enrollment affects how much
funding is available to schools.
Chicago Public Schools

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 Where does the money go? (continued)
spending On citywide
priOrities
Another way to look at our budget
is by where the district budgets
Our Top Three Educational Priorities
To ensure the district’s budget reflects our educational strategies,
we have focused our work and resources on three related priorities.
In FY2009, more than $60 million will be given to programs that
support these priorities significantly.

the funds: at schools, in a central Investment examples include:

Providing excellent Attracting and Expanding options and
office, or in a citywide unit or instruction developing talented opportunities for all
people students
program. While the vast majority
of funds go directly to schools, in
2008–09 CPS also has $1.5 billion o Readin
• Chicag /Science
g
• Principal selection
• Turnaro
und scho
ols
M ath and development • Monte
and ssori and
s magnet
of the $5.2 billion operating budget Initiative • Teacher evaluation sch
a n Conne
ction expansio ool
• Freshm th-grade pilot and performance ns
• Gradu
(8th-to-9 management ation
to invest strategically in citywide transitio
n)
• Sister cities Teacher
Pathway
s
h Sc hool Recruitment program
• Hig
priorities and central office support Transfo rm ation

of our schools.
FY2009 program costs

Nearly Three-Quarters Central office dollars (4.4 percent of the budget) pay for the administrative activities
of Funds Go Directly performed and used districtwide, such as human resources, principal development,
information technology and program administration of our literacy, math and after-
to Schools school initiatives.
4%
Central office Citywide dollars (the remaining 25 percent) are funds that the district strategically
invests in the programs serving students who need them the most. Although these
funds pay for teachers, programs and other school resources, they are often man-
aged by central office program administrators. This allows us to have the greatest
impact with the comparatively few discretionary dollars we have.
25%
Citywide

71%
School-
based
Chicago Public Schools

FY2009 operating budget

by location of dollars

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Capital expenses for facilities
While day-to-day expenses come from operating funds, capital funds pay for the
Since starting our Capital
construction of new schools and the renovation and expansion of existing schools.
Improvement Program (CIP) in Capital funds are generated by issuing bonds, which is similar to taking out a home loan
1995, CPS has funded more than today and repaying it over time. The five major areas of the CIP are described below.
The most recent report issued by the Illinois State Board of Education on school construc-
$5 billion in building improvements.
tion needs estimates that CPS’ overall need is greater than $4.5 billion. However, FY2009
will be the fifth consecutive year that the state has not provided any capital funds.
CPS must thoroughly assess each building and include it within the CIP. To learn
more about the CIP, please visit www.cps.k12.il.us/Operations/cip.html. To access the
assessment database and learn more about the capital needs at your school, please
visit www.csc.cps.k12.il.us/servlet/CIP?ASMT=Y.

Modern Schools Across Chicago

In June 2006, Mayor Richard Daley announced the Modern Schools Across Chicago program,
which will provide more than $1 billion for new school construction. This program addresses
Chicago’s highest-priority needs, including elementary and high school creation to relieve
$255 overcrowding and major high school renovations to improve existing facilities.
million
Existing CPS schools
Capital funds are spent to extend the useful life of existing CPS buildings. Examples include
purchasing new boilers, replacing roofs and installing energy-efficient windows.

Major facility construction and renovation

In some situations, a school is just not adequate to meet the needs of its
students. In those cases, we must build additions to accommodate more
$172 students or renovate the existing building.
million
Technology
These funds pay for new wiring, computers and equipment,
Internet access, and fire alarm system upgrades.

Other
These funds cover everything from installing a wheelchair ramp
or enlarging a school bathroom to comply with the Americans
with Disabilities Act, to buying new furniture, supplies and
equipment for new schools. The Department of Food Services
uses these funds to remodel school kitchens. Capital funds also
pay for project management services for capital projects.

$50 $51
million million Capital funds pay for the design and
$22 construction of new schools, expan-
million sion of existing schools, and major
Chicago Public Schools

renovation of older facilities. Capi-

tal expenses are paid for by issuing
bonds. These borrowed funds are then
repaid over a number of years through
FY2009 CIP ($550 million)
local revenue.

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 Going forward
There is much work to be done
if we are to meet our goal of
becoming the best urban school
system in America. We cannot
accomplish this work with our
existing resources.
Our Per-Pupil Funding Is Low
$10,290 – Los Angeles, CA
Chicago Public Schools
Source: National Center for Education Statistics, http://nces.ed.gov/edfin/search/search_intro.asp, 2004–05.
10
The state of Illinois ranks 49th in the coun-
try in the level of support provided for
public schools. In 2006, only 30 percent of
our school funding came from the state,
compared to the national average of 47
Illinois’ rank for the level of
percent. As a result, our per-pupil spend-
public school funding the
ing is very low compared to neighboring state provides.
districts and other large urban systems.
State underfunding, combined with continued enrollment declines, makes it all the
more important that we put the dollars we have where they will make the biggest
difference for our children. Schools are using their discretionary dollars to hire more
teachers, plan student enrichment activities, provide additional professional devel-
opment, and strengthen security and school support services.
At the same time, we have improved business services (human resources, finance
and operations) to schools, and principals say they are increasingly satisfied with
the quality of service.
$19,827 – Evanston HS, IL
$10,732 – Naperville, IL
$10,579 – Springfield, IL
$9,830 – Rockford, IL
$9,689 – Chicago, IL
$16,078 – Detroit, MI
$13,104 – Columbus, OH
$15,500 – New York City, NY
$12,220 – Philadelphia, PA
$11,428 – Baltimore, MD
$17,809 – Washington, DC
Note: Total revenue amount per student.
The FY2009 budget reflects the district’s commitment to supporting and sustaining
this progress. Although we are making and continue to make gains, we need help.
Additional funds could make a major difference for children. For instance, with ...

■■ $16 million ... we could make all kindergarten

classrooms full-day.
■■ $40 million ... we could provide universal pre-
kindergarten for 7,000 new children or add a recess to
all elementary schools.
■■ $112 million ... we could transform all schools
to Community Schools (open 12 hours a day).
■■ $142 million ... we could lengthen the school
day by 30 minutes for all CPS schools.

Additional resources also could allow us to reduce class sizes significantly:

■■ $22 million would reduce K–3 class sizes

to 20 (at 100 schools).
■■ $125 million would reduce K–3 class sizes
to 20 (at all schools).
■■ $30 million would reduce 9th grade
core class size to 20.
■■ $90 million would reduce all high school
core class size to 20.

We will continue to advocate at the state level for school funding reform, and we
will continue to efficiently align our resources with our educational priorities —
ensuring every child in every school is on track to graduate prepared for success
in postsecondary education and employment.
Chicago Public Schools

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FY2009 Budget Calendar

Septems prbepearration October

Budget proces
ing Launch budget process Novem
activities, includ
development of
a process with revenue and Februa ber–
calendar, system
changes expenditure estimates St ry
rategic
plannin
ovements identific g and
and process impr ation of
prioritie funding
s by sen
leadersh ior
ip and s
chools

March–April
Schools, program manage
rs Mayand finalize
and central office
Review et
June
administrators develop d budg
propose Develop budget book
their proposed budgets

July August
Budget bo Public hearings held to invite
ok availab
for public le
review comments on proposed
budget; feedback incorpo-
rated into budget; and board
adopts final budget

Chicago Public Schools

Office of Management and Budget
Floor 13
125 South Clark Street
Chicago, IL 60603
www.cps.edu