Op-ed: City Colleges of Chicago earns high marks for fiscal prudence

August 03, 2011

The following opinion piece by Civic Federation President Laurence Msall appeared in the August 1, 2011 edition of Crain’s Chicago Business.

Recently, a government official was quoted in Crain's asking, “Is the Civic Federation ever happy?”

It is true that the federation has a 117-year reputation of delivering the hard truth about our local and state governments' financial difficulties. However, it is also true, though less well-known, that we like to acknowledge when governments get it right. A very promising example is Mayor Rahm Emanuel's decision to retain City Colleges of Chicago Chancellor Cheryl Hyman, who is leading a serious effort to meet the colleges' programmatic and financial challenges in a fiscally prudent way that doesn't lose sight of long-term goals.

Chicago's City Colleges has nearly 49,000 full time-equivalent students and an operating budget of $652 million. It faces daunting issues, such as multimillion-dollar budget gaps in the next two fiscal years, an inconstant partner in the state of Illinois and plenty of bureaucratic difficulties that stem from a decentralized seven-campus system with classes in six radically different areas ranging from college credit programs to vocational education.

To better manage this complex enterprise, City Colleges has launched an ambitious multi-year reorganization effort called Reinvention to improve student outcomes and bolster the system's financial health. Reinvention will measure progress on program and financial outcomes and use zero-based budgeting to better align resources with goals. The Hyman administration will for the first time hold individual colleges accountable using a performance-monitoring scorecard.

The school district also has employed prudent fiscal management strategies in next year's budget. It has exercised fiscal restraint, freezing the property tax levy for the second year in a row and increasing general operational spending by only 1.7%. The administration is emphasizing both enhanced revenue through phased tuition increases and cost-containment strategies such as cooperative purchasing agreements. Crucially, City Colleges also is developing a long-term plan to address its future budget gaps and in the meantime is assisted by unusually healthy reserve funds that total approximately 20% of operating expenses.

City Colleges faces enormous challenges in meeting the needs of a diverse student body in an era of ongoing financial stress. Revenue is limited. Problems are likely to arise in the implementation of the Reinvention program. However, City Colleges is making great strides toward improving the management of its finances and its programming. It has acknowledged its problems and is addressing them in a reasonable and rational manner—a great model for all governments.

City Colleges' Reinvention plan is far from complete, but there is plenty of evidence that it is moving toward great improvement and deserves our support.