CHICAGO - The financial oversight authority for the Chicago Board of Education approved the board's revised $2.6 billion fiscal 1993 budget late Monday, a day before the start of the new fiscal year and the deadline for approval.

Following the last-minute elimination of an $84.6 million deficit, the budget was approved unanimously by the five-member Chicago School Finance Authority, according to Stephen Dragich, the authority's legal counsel.

Under state law, the oversight board assumes broad powers over the school system if the overseer says the system's budget is not balanced. Since 1988 the schools have been free of that control.

The board filled its budget gap over the weekend with assistance from the Chicago Teachers Union, the state, and the authority.

In a marathon meeting brokered by Mayor Richard M. Daley, the teachers union agreed to $14.9 million in concessions, while the board cut $5.7 million from its budget.

In addition, Gov. Jim Edgar of Illinois agreed to give the board its $42.3 million September state aid payment before the start of the new fiscal year, while the authority agreed to release $21.7 million in reserve funds.

Though the agreement still needs approval by union members, union spokeswoman Jackie Gallagher has said she did not expect any significant opposition. The union's 750-member House of Delegates was expected to vote on the agreement yesterday. The 31,000 teachers in the union will vote next week.

After the authority approved the budget, Board President Florence Cox said in a release Monday that the board will immediately address the projected fiscal 1994 budget deficit that is estimated at about $300 million.

"We know what our plight is, and we won't wait until next year to begin dealing with it," Ms. Cox said. "At the same time, everyone from the finance authority to elected officials has acknowledged that public education may only improve with additional funding."

The Chicago Public School system has a BBB rating with a negative outlook from Standard & Poor's Corp. and a Baa rating from Moody's Investors Service for its $30.3 million of outstanding general obligation debt.

Rating agency officials have said they will scrutinize the final budget before making any specific comments.

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