CHICAGO — Chicago Public Schools announced plans Thursday to shutter 54 of its 681 schools, a move defended by district leaders as needed to better direct resources and "right-size" a financially strapped system strained by a looming $1 billion deficit.
The action proposed by the district's chief executive officer Barbara Byrd-Bennett is expected to save $560 million in capital costs and $43 million annually in operations over a 10-year period. The district called the schools slated for closure underutilized and under-resourced and sought to stress that students would be moved to better performing schools. Another 11 schools would share space with other schools and six schools are slated for an academic overhaul known as "turnaround."
The closings won't do much to help the nation's third largest public school district's near-term deficit and it nearly drained reserves to erase red ink in its current budget. The district plans an infusion of $155 million for capital and $78 million for operations at the 55 schools set to take on more students. Improvements include new libraries, air conditioning, increased safety personnel, and iPads for 3rd to 8th graders. Savings from the closures will cover half of the operating tab and all of the capital expenditures. The closures would impact more than 30,000 students and result in hundreds of teacher layoffs.
"As a former teacher and a principal, I've lived through school closings and I know that this will not be easy, but I also know that in the end this will benefit our children," Byrd-Bennett said in a statement. "Like school systems across the country where enrollment has dropped, Chicago must make tough choices and by consolidating these schools we can focus on safely getting every child into a better performing school close to their home."
Byrd-Bennett, Chicago board of education members, and Mayor Rahm Emanuel — who appoints the board and installed Byrd-Bennett to lead the district last fall — have portrayed closures as painful but needed to "right-size" the district. At least 140 schools are more than half empty. District press releases of late have noted that $1 billion deficits loom in each of the next three fiscal years while the district "currently supports over 100,000 empty desks." The district's enrollment stands at 403,000.
"Consolidating schools is the best way to make sure all of our city's students get the resources they need to succeed in the classroom," Emanuel said in a statement.
The announcement drew criticism from union leaders and some in the affected communities and their City Council members concerned with the safety of moving students across gang lines and the impact a school loss has on neighborhoods. Critics of school closures argue that past closures here and the experiences of other urban district don't bear out projected savings and the impact is disproportionately felt by minority students. Published reports called Chicago's proposal to close 54 schools the largest single-year action by a school district.
The district began laying the groundwork for the action late last year with the appointment of a special commission to make recommendation on closures and consolidations. High schools, and newer elementary schools or ones that had recently underwent a district-imposed turnaround process, were eliminated from consideration and the commission sought to avoid forcing students to travel more than a mile to a new school.
The commission removed 276 schools from consideration and concluded that up to 80 schools could be safely closed. CPS has previously closed about a dozen schools in one year. The district has said it would impose a five-year moratorium on future closures. It faces an end of March deadline to submit its educational facilities master plan to the state. Public hearings are slated on the action and the CBOE is expected to vote on the plan at its May 22 meeting.
The closure announcement comes six months after the district and Emanuel resolved another contentious issue. Teachers went on strike in September for the first time in more than two decades over their contract.
The board late last year restructured $110 million of general obligation bonds to help fund a new four-year contact. All three rating agencies affirmed the board's ratings ahead of the sale after previously hitting it with a series of downgrades earlier in the year.
Fitch Ratings assigns the board's $6 billion of GO debt an A rating and negative outlook. Moody's Investors Service rates it A2 with a negative outlook and Standard & Poor's rates it A-plus with a stable outlook.
An initial round of downgrades came after the district decided to nearly drain its reserves by using more than $400 million to help close a $665 million gap in the $5.2 billion fiscal 2013 budget. Analysts were also concerned over the looming spike in pension payments in 2014 of $338 million to $534 million due to the expiration of a three-year pension holiday.
The seven-day strike in September and pressures posed by the new four-year, $300 million teachers' contract, prompted additional negative action. The district can't rely on the cash-strapped state for extra aid and faces property tax caps. "Fitch believes significant actions will be necessary in fiscal 2014 to avoid a deficit position," analysts wrote.
The board last year cut future borrowing plans, approving $750 million over the next three years, which is down from $2.3 billion authorized for the prior three years.