Chicago's Schools To Open on Time

Budget Finally Balanced With City Hall's Help And Creative Financing

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The Chicago schools will open this week after all, on a $1.8-billion budget wrestled into balance with a variety of budget cuts, onetime revenues, and the power of the mayor's office. The district, which is forbidden by state law to open its schools without a balanced budget, passed the last major obstacle Wednesday, when the finance authority approved its spending plan for this school year.

But the cost of arriving at a budget acceptable both to the teachers' union and to the Chicago School Finance Authority was high. And the 450,000-student system, the nation's third largest, is far from being on the solid financial footing its leaders sought during a summer of turmoil. The finance authority has ordered the board to develop a long-term financial plan including balanced budgets for the next two school years.

After rejecting a two-year teachers' contract that would have cost $42.5 million this school year, the board renegotiated a one-year agreement that will cost some $14 million more and, if the benefits are maintained, the cost could exceed $100 million next year.

Under the new agreement, reached in a marathon bargaining session in the mayor's office, employees will receive no salary increases this year, but the board will start making payments into the teachers' pension fund earlier than it had planned. Take-home pay will increase by up to 9 percent as a result, and class sizes and working conditions will remain the same as last year.

The contract won the overwhelming approval of the union's leadership; the members are expected to ratify it Friday.

The board apparently was willing to pay the extra cost so that it could enter the 1982-83 school year with no contractual obligations.

With a property-tax increase a political impossibility, the board last spring closed some 30 schools and devised some novel measures to balance the budget.

For example, the board and Mayor Jane M. Byrne arranged for new property assessments· to be used ahead of schedule, yielding approximately $60 million. The technique can be used in future years, but the yield will be lower.

Mayor Byrne, keeping her vow to open the schools on time without any new taxes, also turned over to the schools $6.5 million of the city's federal community-development funds.

If the money is spent for vocational education, as planned, the transfer probably is legal, according to an official of the Department of Housing and Urban Development. If the plan falls through because of federal restrictions, the Mayor has pledged to ask the city council to give the schools $6.5 million out of the city's general fund.

Two more boosts, totaling more than $15 million, came earlier in the summer. First, Governor James Thompson signed legislation allowing the district to use excess investment earnings for operations. Then the board sold Midway Airport to the city in a complex transaction that yielded a saving of $2.2 million.

Vol. 01, Issue 01, Page 5

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