No property tax increase for CPS

July 23, 2008 4:14:21 PM PDT
For the first time since the mid-1990s, Chicago property owners will not face a new tax increase to fund the city's public schools. Mayor Richard M. Daley says the poor economy is part of the reason for his decision.

In the short term, this is good news for the hundreds of thousands of people who own Chicago real estate. But it's not such good news for city public schools, where district officials say recent successes might be stalled because of money problems.

The mayor offered two reasons behind his decision not to increase real estate taxes for schools: falling home prices and what Daley says is an economy in recession.

"I think it's going to be much deeper and much longer. That's my prediction. I would be very frank. I think there is no magic solution coming out of Washington," Daley said.

So here's how the CPS found the dollars to balance next year's budget.

  • It will save $35 million by delaying a bond sale until next year.
  • Another $12 million will not be spent in the central office
  • And $50 million will be withdrawn from the district's reserve fund in addition to $50 million it already planned to withdraw for use in next year's operations.
  • "We are planning to take 50, taking $100 out. You cannot do that year after year and maintain our great credit rating with the rating agency," said Arne Duncan, Chicago Public Schools CEO.

    The largest percentage of city homeowners' property tax bills goes to the public schools, and the levy has been raised each year for the past 12. The mayor says the only long-term relief must come from the state government, which in recent years has resisted efforts to raise other taxes to support public education.

    And without help in the near future, the mayor would not rule out the possibility of a tax increase next year.

    "I just work it one year at a time. Let's work it one year at a time and then try to find out how it's going to go. No one could predict that. Even the federal government can't. Even the economists can't," Daley said.

    Duncan said the district has several successful pilot programs in place that cannot be offered to more students because there is not enough money to expand them.

    Duncan said there would be no cutbacks in the number of teachers or existing classroom programs.


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