George Schmidt, who taught for many years in the Chicago Public Schools but was fired by Paul Vallas for releasing test questions, edits Substance News. Here is his analysis of Chicago’s perennial budget crisis:

Sorry this is very long, but I have a hunch that many people will want to know how the “austerity” lies that feed all those “necessary school closings” and teacher layoffs are created in the fictional propaganda offices of school districts across the USA — not just Washington D.C.

The “deficit” claims have to be reported (and accepted) as “fact” in order for the liars who are operating the “school reform” offices get away with all these attacks.

But: Let’s not give Michelle Rhee credit where she was only following a script that was previously written and perfected in — you’ll never guess — Chicago. As long ago as when Michelle Rhee was failing as a Teacher for America “teacher” and using masking (or duct) tape to maintain order in her classes, Chicago had perfected the process of “eternal austerity” in its education budgets. Every year (except one) during Arne Duncan’s term as “CEO” (2001 – 2008), Duncan held a press conference to announce that CPS was facing an enormous “deficit.” Duncan’s predecessors had been doing the same for a decade, concocting a “deficit” using what the former Board Secretary told me was their “magic number.”

That’s right — a “magic number.” According to Tom Corcoran, who first laid out the plan for me after his retirement, CPS officials would meet and decide what was needed to have a certain “deficit” (the “magic number”) and then arrange the preliminary numbers in the next year’s budget to create that “deficit.” Throughout the 1990s, the “magic number” every year was “$300 million!” That number then became a headline across the top of the front page of the Chicago Tribune, and was repeated endlessly until it was believed by everyone who was paying attention to the official version of reality.

Anyone familiar with a budget process knows how easily a “deficit” can be created in a future budge:

Overestimate expenses.

Underestimate revenues.

And this was the “Chicago Plan” from the days when MIchelle Rhee was still learning to “pass” her literature classes in high school thanks to Cliffs Notes.

Because the Chicago budget is projected for the next fiscal year, it’s difficult to challenge the magic number except based on history. The audited financial statements of Chicago’s public schools do not come out until six months after the end of the fiscal year, and that has been the first time the city has an accurate accounting of its school finances, since the lying about the magic number has been going on now for more than two decades.

Anyone interested can read the CAFR (the Comprehensive Annual Financial Report) of Chicago Public Schools, because they are public (by law) in December of each year. Unfortunately for the truth, the CAFR for a fiscal year comes out nearly two years after the BIG LIE of each magic number is created and spun to the public. Therefore, the CAFR for the current fiscal year we’re in in Chicago won’t be available until December (when it’s presented to the Board of Education members) and January (when we squeeze it out of CPS using the Freedom of Information Act). The FY 2013 CAFR will be available in December 2013, but FY 2013 ended two months ago, on June 30, 2013. And the Magic Number (another billion) was lied around and picked up by the corporate media in Chicago during the early months of 2012, during the first year of Rahm Emanuel’s Board of Education.

“Everyone” knows that Chicago’s public schools were facing a “billion dollar” deficit for the current fiscal year (FY 2014, July 1, 2013 through June 30, 2014). Everybody can read hundreds of stories from the past eight months in Chicago’s corporate media citing that figure. The New York Times repeatedly cited it, so, as most intelligent people knew, it HAD to be true.


The “Billion Dollar Deficit” was concocted the same way it always was, and then repeated over and over propaganda style in a way that would have been approved by the tyrants of the 20th Century.

One of the features of that “Billion Dollar Deficit” was that Chicago had “zeroed out” its “reserves.” That part of the big lie was part of the story told by Penny Pritzker and others on Rahm’s Board during that first year (leading up to the Chicago Teachers Strike of 2012). “Everyone” knew that CPS was facing a “Billion Dollar Deficit!” just by reading the newspapers and the quotes, from the Chicago Tribune through The New York Times. Blach Blachhhh Blahhhhhhh…

Suddenly, on July 24, 2013, CPS announced that its proposed budget had eliminated that Billion Dollar Deficit! — partly by “finding” more than $600 million in “reserves” it didn’t have. Of course, the July 24 report to the Board took place after Barbara Byrd Bennett and the Board had ordered the closing of 49 of the city’s real public schools (because of the need to save money because of that “Billion Dollar Deficit!”) and fired about 3,000 school workers (most of them, teachers) because everyone knew CPS was facing a “Billion Dollar Deficit!”

Anyone who wants to read the Power Point that shows how CPS “balanced” its new budget after telling the latest version of Magic Numbers for six months, with the help of the city’s (and nation’s) corporate media can go to the CPS Website:

where there are videos of the presentations of the Board meetings.

In the third video, national readers can witness Tim Cawley, who currently serves as “Chief Administrative Officer” for CPS, and Barbara Byrd Bennett, who was brought to Chicago after helping destroy the public schools of Detroit, do a Power Point about that FY 2014 proposed budget. The public can also download that Power Point to have while watching the video of Cawley reading carefully from his scripts.

Cawley is just the latest in a long line of CPS officials who have presented the Magic Numbers with a straight face to an uncritical public.

Not one of the city’s corporate media noticed that a “reserve” that had been “zeroed out” supposedly 13 months earlier had not only fattened up, but reached a historic high — more than $600 million. And “everyone” who was reading the papers (including as I’ve said, The New York Times) knew that CPS had been facing a “Billion Dollar Deficit!”

The difference this year is that leaders of the Chicago Teachers Union began studying how CPS budgets in the room from which I’m writing this five years ago. We began, not with news clippings or CPS “Proposed Budget”, but with the CAFRs. Each year, we were able to track the same lies.

This year, as everyone read on the front page of The New York Times, the reason for the “Billion Dollar Deficit!” is the teacher pensions! And just in case The New York Times missed it, Tim Cawley repeated that over and over and over in his presentation the you can view on line.

But just so people reading this know, the New York Times reporters who did that front page story about the CPS “pension crisis” never called the Chicago Teachers Union or the Chicago Teachers Pension Fund to check the facts they were reporting — as “news” — from Rahm Emanuel and his allies and minions.

While it would be nice to say that Michelle Rhee was responsible for the “austerity” nonsense that drives all those teacher layoffs (and not, “pension reform”) and other “reforms” (close 49 “underutilized” schools, as in Chicago), as a matter of historical fact, one of the place that invented this whole scam was Chicago. Back when Michelle Rhee was honing her mendacity skills in elementary and high school.


All you need to reach a “Magic Number” for a “deficit” is to:

First: Underestimate revenues and

Second: Overestimate expenses…


MOST IMPORTANTLY:Enjoy the services of a corporate media trained to treat a quote from an authoritative “source” (Michelle Rhee; Tim Cawley; Jean-Claude Brizard; Barbara Byrd Bennett) as if it were a “fact” even when the facts contradict the words oozing out of the mouth of the latest talking heads of “school reform.”

But you don’t have to believe me. Just read that front page story in The New York Times from a month ago about how Chicago’s schools will be broke because of the high price of all those teacher pensions. Here we go again…