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When the new management team took the helm of the Chicago Public Schools in July 1995, it realized that success would depend on sound financial management.  A top priority was to eliminate bureaucracy, become more efficient and reinvest resources on what mattered most -- the children.

In the first 18 months of the new administration, stability and fiscal order were brought into the system, wasteful and inefficient operations were cleaned up and improved and the district’s credit rating was restored and upgraded. As a result, standardized test scores have improved, attendance increased and enrollment has risen beyond expectations as people’s faith in the public schools has been restored.

Underlying the success is a commitment to a balanced budget and sound fiscal management. These are essential components to implementing the necessary and new initiatives that are enhancing the educational environment. Fiscal responsibility was achieved when:

• A four-year labor contracted was negotiated with the Chicago Teachers Union and other employee groups, bringing with it a stability that had been absent in Chicago since 1979, when the school district underwent a major financial crisis.
• A balanced budget was adopted and achieved in 1996, 1997, and 1998. This eliminated a projected 4-year $1.3 billion shortfall while providing financial security and expanding educational services, all without an increase in class size.
• Financial solvency restored the fiscal position of the Chicago Public Schools and allowed CPS to obtain an investment grade rating from three major bond-rating houses as well as subsequent rating increases. This enable the school district to sell bonds on its own credit.
• Efficient management helped renegotiate contracts to get fairer prices, streamlined central administration, eliminated waste in food services and warehousing and privated activities that could be provided better and more competitively by private firms, such as real estate management, property management, food services, custodial services, and warehousing.