July 12, 2012
The Civic Federation announced its support for the City Colleges of Chicago FY2013 tentative budget on July 12, testifying at a public hearing and releasing its analysis of the proposed $659.5 million budget. The budget demonstrates continued fiscal discipline and attention to financial best practices as City Colleges enters the third phase of its multi-year Reinvention effort.
The FY2013 proposed unrestricted operating budget, over which City Colleges has the most discretion and control, will decrease by $2.4 million or 0.8%. With the exception of negotiated salary increases, appropriations for all unrestricted funds will decline from FY2012.
The FY2013 Tentative Budget projects that 56.9% of all unrestricted operating resources will come from state and local government sources, and approximately 36.1% will be provided by tuition and fees.
The Civic Federation applauds City Colleges’ fiscal restraint in keeping its property tax levy flat for the third consecutive year, at $123.3 million. In-district tuition rates also remained flat and a strong fund balance of 15.2% of operating expenses is maintained, a dramatic turnaround from the 1.1% fund balance ratio reported in FY2000.
City Colleges is now in the third phase of its multi-year reorganization effort called Reinvention. The program includes improving student outcomes, as well as the financial and operational health of the colleges system, by using zero-based budgeting to better align resources with goals. Under Reinvention, the District has achieved operational savings of $41.0 million that have now been redirected toward instruction and other quality improvements. The Civic Federation strongly supports the City Colleges’ reorganization and its progress to date. It is a model that the Federation encourages other governments to emulate.
The Civic Federation is concerned that City Colleges provided an insufficient five working days from the budget release to the first public hearing, limiting time for public review.
The Federation’s full analysis also includes several recommendations based on recent fiscal developments in the State of Illinois and City of Chicago. The Civic Federation strongly urges the District to prepare for a potential shift of pension costs from the State of Illinois by incorporating a proposed phased-in shift of the normal cost of the District’s pension benefits into its expenditure forecasts. Also, the District’s future capital budgets should provide full disclosure of information about investors and contracts when engaging in projects related to the Chicago Infrastructure Trust.
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Civic Federation Senior Research Associate Rebecca McAlpine testifies in support of the FY2013 budget at a City Colleges Budget Hearing on July 12, 2012.