Chicago School Opening Prospects are Better

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Some shrewd financial maneuvering and a timely contract settlement with the teachers' union have considerably brightened the Chicago schools' prospects for opening as scheduled on Sept. 9.

Just two weeks ago, when a change in the state-aid formula reduced its revenues by $7 million, the nation's third-largest school system faced a budget deficit of $74.7 million for the upcoming school year. Under Illinois law, no district may open its schools without a balanced budget.

Since then, Mayor Jane M. Byrne and the city school board have arranged for new property tax assessments to go into use six months ahead of the usual schedule, a move which is expected to yield $64 million to $79 million on a one-time basis for the system this school year.

In addition, the school board voted last week to sell a local airport to the city for $16.5 million in cash and a city waiver of its $700,000 annual sewer charge to the schools. The Midway Airport property is one of the few parcels of land still owned by the board under the Northwest Ordinance of 1787, which set aside the 16th section of every 36-square-mile township to help finance public schools, and has since been replaced by a more conventional school-finance system based on state and local taxes. The board has for several years leased the airport to the city for $24,000 per year.

The proceeds from the Midway sale may not be used for educational purposes, and so cannot be applied directly to the Chicago schools' general-fund budget deficit, but school officials hope the money can be used to release other funds for operating expenses.

Another boost came when Gov. James Thompson waived a state regulation and allowed the school board to shift $13 million in its investment earnings, usually not available for operating expenditures, to the general fund.

The teachers' contract, approved last week by the school board, calls for no salary increases in the coming school year. Instead, the board will assume pension-fund payments previously made by employees, at a cost of $33 million. Salaries will rise by approximately 7 percent in 1982-83, at a cost to the board of $45 million.

The board "will have sufficient money" to meet the terms of the contract this school year, said school board President Raul Villalobos, but will need more revenue to meet the second year's costs.

Both the airport sale and the teachers' contract are subject to the approval of the Chicago School Finance Authority, an oversight agency created by the state General Assembly after the district's 1979 financial collapse. The teachers' contract also is subject to ratification by the union's members.

Vol. 01, Issue 00, Page 4

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