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Less than a week after nixing the Chicago school board`s budget, the School Finance Authority rejected the board`s systemwide reform plan, asking for an overall plan that makes decentralization the highest priority of this school year.

The news angered a group of more than 50 school board employees and reform activists who crowded into the finance authority`s meeting room in the Sears Tower. And it left members of the Chicago Board of Education panicked about how they could revise their reform plan and eliminate a $43 million budget deficit with less than a month before school starts.

”Work remains,” authority chairman Martin ”Mike” Koldyke told the crowd, ”but it`s the Lord`s work, so let us begin.”

That comment set off a round of shouting, finger-pointing and arguing among the politicians, school reformers, local school council representatives and parents who had attended the meeting.

One of the most acerbic confrontations involved Democratic State Rep. Monique Davis, who is also a board employee, and Bernie Noven of Parents United for a Responsible Education, a local reform group.

”The status quo has not serviced our children for the last 25 years,”

Noven said, speaking in support of the finance authority. ”And if we don`t decentralize, it won`t (ever) serve our children.”

Davis accused Noven of being an enemy of public education.

”Mr. Noven, you are in favor of privatization,” she shouted.

”And you are a coordinator for the Board of Education,” Noven responded. ”You have a stake in saving your job, and that`s what this is about.”

Davis struck back: ”You`re trying to get one.”

It was the largest turnout at a school finance authority meeting since late spring, when the panel started moving school reform to the top of its agenda.

By law, the finance authority must approve the board`s budget and its reform plan by the end of this month in order for schools to open on time Sept. 8. But historically, the panel has focused primarily on budgetary matters and kept its hands out of reform plans.

This year, newly appointed chairman Koldyke convened a ”focus group”

comprised of 60 local school council representatives, teachers and principals to discuss ways to move school reform along.

The focus group`s recommendations were put in draft form and passed along to the board two months ago, with a warning from Koldyke that this year`s reform plan would be tied to the budget.

The board reluctantly, and over the objection of Schools Supt. Ted Kimbrough, adopted a few of the focus group`s recommendations to be effective this year. As a result, when school starts, individual schools will have greater control over money used to pay for normal building repairs, staff development and curriculum.

The focus group recommendations have come under fire from district school council representatives, the local school council representatives who have been elected by their peers to a higher level.

The district representatives, along with a number of board employees, have said Koldyke bypassed the school system`s democratic process by not seeking the input of more local school officials.

The finance authority`s action Wednesday further enraged those objectors. James Deanes, of the Parent Community Council, said the finance authority was becoming a second bureaucracy.

”This is the top-down approach again,” he said. ”We fought against that on Pershing Road (the board`s headquarters), and we`re fighting against it in the Sears Tower now.”

The finance authority`s rejection of the entire reform plan puzzled a number of board members, including Florence Cox, board president.

Board members said they had been led to believe that the focus group`s recommendations were the finance authority`s main concern. To have the whole plan rejected on such short notice made it difficult for the board to implement reform effectively, Cox said.

”We are operating under severe budgetary constraints,” Cox said. ”And we are in the process, even as we speak, of moving staff out of the central office.

”The place is in chaos in terms of staff support. This is bordering on the edge of impossible in terms of time constraints and the staff that we have available with which to do this.”

By day`s end, officials from the board and the finance authority had agreed that the goal for reform is to ensure that it shapes how money is allocated, and not vice versa.

In a taping of WBBM-AM`s ”At Issue” Wednesday afternoon, Koldyke said that he is not sure if the reform plan can be revised in time for schools to open.

If not, he said, the board and the school finance authority would continue to work to put a plan in place as soon as possible.