CHICAGO (STMW) – Two months into the school year, Chicago Board of Education officials Tuesday were already estimating next school year’s deficit at $700 million.

Plus, the State of Illinois now owes the Chicago Public Schools more money than it did in August, when CPS officials scraped together enough cost savings, last-minute revenues and rainy-day reserve fund-raiding to balance the system’s budget.

The sobering news emerged during a meeting of the newly formed CPS Finance and Audit Committee.

During the meeting, officials revealed the state still owes CPS $164 million from last school year and has been late on an additional $206 million so far this school year.

The committee members also learned that Fitch Ratings dropped CPS’ bond rating one notch in October, from AA- to single A-plus — still considered investment grade.

In doing so, Fitch cited late state aid payments, a “high . . . overall debt burden,” and the expiration of one-time revenues.

Neither Moody’s nor Standard & Poor’s changed their CPS ratings.

Fitch is one of two rating agencies to lower the City of Chicago’s bond rating in the last two weeks.

Without new education revenues, CPS Budget Director Christina Herzog projected next year’s deficit at $700 million — still less than the projected $1 billion deficit CPS officials say they whittled down to zero by August.

Chicago Sun-Times, via the Sun-Times Media Wire

(Source: Sun-Times Media Wire © Chicago Sun-Times 2010. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)

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