Chicago Schools In "Dramatic Trouble": "They're Looking At A Disaster," Illinois Governor Warns
Back in September, we noted that Chicago’s schools are in trouble. Deep trouble.
Amid Illinois’ intractable budget crisis, the city’s public school system opened with a budget shortfall of nearly a half billion dollars.
Borrowing and trimming the proverbial fat helped close some of the $1.1 billion hole but once the board reached the point where “further cuts would reach deep into the classroom” (to quote system chief Forrest Claypool), the schools asked Springfield to make up the difference which amounts to $480 million.
The Chicago Public School (CPS) system has nearly 400,000 students and more than 20,000 teachers. Around 1,400 jobs were eliminated in an effort to save money and more layoffs may be just around the corner if Springfield - which is mired in budget gridlock - doesn’t step in.
One problem is the CPS pension liability. As WSJ noted four months ago, “the district’s pension costs have more than doubled in recent years after the board took a partial 'holiday' for three years from paying the amount needed to put the retirement system on a path to long-term solvency.”
“It is like the board is a desperate gambler at the end of their run,” remarked Jesse Sharkey, vice president of the Chicago Teachers Union.
Governor Bruce Rauner wants nothing to do with bailing this “desperate” bunch of “gamblers” out. “Let’s be clear Chicago Public Schools are in dramatic trouble,” he said last week. “They’re looking at a disaster somewhere in the next nine months in the Chicago public schools.” As Bloomberg reminds us, "CPS is the only state district that pays for its teachers pensions."
Rauner went on to predict that Springfield would be blamed if (or perhaps “when” is the better word) disaster finally strikes: “For them to say ‘hey you owe it to us, it’s Springfield’s fault, pick up our pension liability and let us kick the can in the rest of our pension liability, no, no, not happening.”
“No, no, no,” and that means it’s back to the bond market for CPS, where investors are set to punish the board for their abysmal financial predicament.
As Bloomberg goes on to note, the system’s GO debt is trading near its lowest levels since September and the Chicago Tribune’s editorial board isn’t happy about it. “While Springfield yawns, CPS borrows money it shouldn't, at rates that it (read: that taxpayers) can't afford,” the Tribune lamented, in a piece written late last week. “The cost of that borrowing now is nosebleed steep: CPS recently agreed to shell out 10 times the interest rate that a healthy district would typically pay its lenders. Ten. Times.”
Here’s more:
But CPS won't stop. The district plans to sell as much as $1.2 billion of debt later this month. The rate CPS pays again will be punishing.
Punishing, that is, to nearly 400,000 school children. Every dollar CPS spends on debt service cannot be spent on classrooms, teachers, books — education.
That is, every dollar that pays back this astonishing level of borrowing, for years on end, won't go to teaching kids.
The ephemeral Springfield bailout? Prospects for that are as grim as ever.
Gov. Bruce Rauner says he will help CPS if Democrats in the legislature grant some of his demands for political and government reforms that public employees unions oppose.
In the last week, a frustrated Emanuel has accused Rauner of using Chicago schoolchildren as pawns "in a political game in Springfield to get an agenda done that people don't agree with."
Chicagoans have heard this accusation from Democratic politicians for months now. But Rauner (you, unlike Madigan and Cullerton, may recall that he won the 2014 election for governor of Illinois) evidently won't be bullied or bought off. The Democrats in Springfield and, yes, Chicago will have to deal with his demands. They will have to compromise. To the extent any pol uses those children as pawns, everyone in this tragicomedy uses them as pawns. None more, none less.
CPS officials said Friday that layoff notices for central office staffers should start going out by mid-January.
CPS bonds are rated as junk. More downgrades seem likely. Even higher interest rates loom.
Claypool told us last month that he expects "at some point" lenders would stop lending to CPS. "You build such a deep amount of cash debt that you can't ever pay it back."
Right. Which means a taxpayer bailout here is inevitable whether it's through an outright cash injection from Springfield, higher taxes, or both. As a reminder, Chicagoans are already the most-taxed residents in Illinois.
"Politicians in City Hall arrogantly assume that Chicagoans will stomach more and more tax hikes," Illinois Policy writes. "The expectation of higher property taxes to bail out the city’s other pension funds and the nearly bankrupt state of Chicago Public Schools will only make out-migration worse."
In other words, Springfield doesn't want to help (and even if they did, the budget boondoggle would probably constrain Rauner's ability to help) and taxpayers in Chicago are already grossly overburdened. Meanwhile, CPS is on the brink of being priced out of the bond market.
With no viable options, the base case is now that described by Chicago Democrat John Cullerton last year: the system will lose 3,000 teachers and will be forced to shorten the academic year.
(10 votes)
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for 3/4ths of chicago youth, no school is already a reality, but remain open as a networking hub for crime
Democrats really do manage finances well, don't they?
Chicago Dems are an exceptional brand of stupid...Just look at what resides in the Oval Office.
"Democrats really do manage finances well, don't they?"
The Elite are all rich aren't they? Oh, you meant as a matter of good governance.
FORWARD PROPERTY TAXES, EVER FORWARD!
The public sector unions have painted themselves into a corner, overpaid and understaffed with angry masses of zombies at the gates.
But but unions will save the middle class with great wages and benefits while driving costs through the roof. Unions killed labor in this country. At one point in history they worked miracles, but now are just another leech on the system.
Grearer problem are the banks and the traitorous politicians serving them who are willing to completely fuck the middle class in this country and destroy the earth in order to make a few extra cents off every commercial piece of shit made with slave labor that were conditioned from birth to want. Shipping shitty products and toxic food thousand of miles around the earth when it can be made more easily, safely, and ethically nearby. The big picture problem here is the fault of unions only so far as they've sided along with these motherfuckers and completely lost the teeth they once had.
Edit: on the smaller issue here in Chicago, yea, the teachers union is grimy and def doesnt have students best interest in mind
Clearly, the Chicago schools are destroyed.
Invest for the coming expansion of the prison complex.
Chicago is off to a great start this year.
January to Date
Shot & Killed: 19
Shot & Wounded: 101
Total Shot: 120
Total Homicides: 19
http://heyjackass.com/
That was the plan of passing ESEA.
"An original bill to reauthorize the Elementary and Secondary Education Act of 1965 to ensure that every child achieves."
From ABCs of dumbing down: Neocons should be pleased they at least got their tax-funded school choice agenda (necessary for Soviet workforce training) included in the bill they claim to detest.
On Communist Core they may appear to have won their battle to defeat it, but it is hidden away in the 1000 plus-pages... if they care to look.
Next up charter skools & fed control of property taxes.
Communist core.
See how your senator voted. My guess they couldn't read the bull & had to pass it before they could find out what was innit.
http://www.senate.gov/legislative/LIS/roll_call_lists/roll_call_vote_cfm.cfm?congress=114&session=1&vote=00334
Chicago has a 50 percent literacy rate so Id say Chicago schools have been a disaster since about 1967
"According to the State Board of Education, per pupil operational spending in CPS (2014) is $13,433."
http://www.chicagotribune.com/news/opinion/commentary/ct-chicago-public-schools-charter-catholic-archdio-20140908-story.html
Surely, they'll say the literacy rate is abysmal because they don't have enough money.
No one ever said you need to be able to read your EBT card.
In Chicago, they only need them literate enough to vote the straight (D) ticket 3-4 times per election.
Think about the children! (rallying cry of pandering dems)
Equally, no child left behind.
When I was a kid, I did half of every school year up in Chicago. Nothing pissed me off more than when my friends in public school got to play around those extra first weeks of what were supposed to be the beginning of the school year because the teachers usually decided to go on strike at the beginning of each year. I tried to point out to my parents that more time off was an advantage of a public education over a strict private education, but they saw it otherwise. Meanies.
Actually, we're rather stoic about it.
When it comes to pensions, we support the firemen...the cops and politicians can eat it...streets aren't safe and the Govt sucks...No soup for you!
The nice German folk finance pension plans for the good officers who turn their guns back in force.... Wait?
Look at surrounding suburban Chicago HSs where teachers with 25 years are making well over $100,000/year
Here are just a couple.
==================
Thomas A Fidler
Hoffman Estates High School,IL
Add to Compare High School Teacher
$175,816
32 Years of service
==================
Michael A Wietlispach
Hoffman Estates High School,IL
Add to Compare High School Teacher
$169,969
32 years of service
=============
http://illinois-teachers.findthedata.com/
The get to retire at a pension with 75% of their salary. Good reason for Illinois going broke.
don't hate the playas hate da game.
like you would take a pass on making six figures for pullin your pud 180 days a year...
what's that? you would? liar.
the center will not hold.
You get...NOTHING !!!!!!!!!!!!!!!!111111111
Dont shoot the messenger. I say fuck em too.
Da Playas will hate the game soon enough. Pity they won't figure out how it happened.
FORWARD DOG FOOD EATING SOVIET!
How a glorified baby sitter make $175 a year, and after sucking tax payers for 32 years, retire with 75% of that!!???
Needs congressional action for new bankruptcy law that allows public entities across the board to go BK and shed all the pensions and bonds and start over
paying pensioners $30-150,000 per annum forever is not in the cards - give them 20 cents on the dollar of contract liability and reduce the property and income taxes 50% or else the whole local game is going to implode - too many alternatives out of state - whatever the state may be
You see it happening every year. IL is always in the top 5 states for outbound moving vans. Taxpayers just keep voting with their feet. Cant blame them. Just dont move to SC.
They move alright and then commiefy wherever it is they move to. Did it to Virginia, are doing it to Texas and North Carolina as we speak. Just a matter of time before they hit critical mass there and turn them blue unless it's stopped soon. Never thought I'd see the day that my beloved Virginia was commiefied but we are little more now than South Maryland at this point, especially in the NoVa area.
Born in MD, but spent most of my life in VA. NoVa has crept out west to Winchester and south to Fredericksburg. Virginia is losing it's identity to souless DC. Regarding Maryland, never will you see a better case for breaking up a state. The three areas have absolutley nothing in common. I've often opined that the eastern shore should join Delaware to make it a real state, western MD should hold a vote and either join PA or West Virginia, and the central area should consume DC (they really should have voting rights/representation) to make one concentrated liberal hub. Baltimore, PG, Montgomery County, etc.... Watch it implode.
close 'em all. let the fuckin' streets take over. start from scratch.
Liberals suck.
I know a retired school teacher. We were talking about shortfalls a few years back. She said to 'tax business'.
'Have you ever had to meet payroll, make enough to cover expenses, go after receivables while vendors are shutting their doors as they didn't get paid, pay all those fees and taxes and yet people like you are demanding more?'
'No', she said.
Try cutting anything from the teachers, cops or firemen and they get violent.
There should be a cap on their pensions. That would put an end to their abuse of multiple pensions.
One fire debuty cheif in Illinois worked at sdispatch for 9 years drawing a $17,500/yr pension while drawing the regular pension for his 30 years at $105,000/yr.
Abuse in Illinois by the public unions is out of control.
Whenever one of those fucks gives me an attitude I just think of what their pension is worth (zero). Don't forget about that Oathkeepers!!!
That is everywhere. In Canada I read magistrates make 1/4 million a year. These guys don't judge the bad cases. They don't put in 40 hour weeks. Never mind teachers and other civil servants and there are a ton of them.
However, keep in mind if we fire the lot of them or cut back their pay the whole economy will basically shut down as the government directly or indirectly though regulation which requires accountants and people in business to insure they are compliant is the largest employer now that manufacturing has left Noth America and agriculture is largely automated, employing a fraction of what it used to.
Best is to let the FED keep on printing and hiding what is out there. Sometimes what we don't know won't hurt us. Our society hooked on small screens and Kardashian won't know how to survive when the economy and governments break.
Fuck the IL schools. SHTF is already going down. Today, Chicago retirees don't get paid. Tomorrow, socsec old people don't get paid. I have a military retirement check every month (thanks taxpayers) and I expect it to not get paid one day. The keynesponzifsashitshow is drawing nigh to a close. The hefty girl with blonde plaited hair and a funny hat is warming up off stage.
I suppose if you're a politician you'd fuck up/over the military (ex) last; makes sense, they're not that stooopid.
Uh, next to last, no way the military will get a dime and leave those shit heads pensionless. Im looking forward to seeing the 3 branches of govt eating cat food, spoiled fish.
The architect of Zerocares little brother will fix the shortfall in a jiffy...
This problem dates as far back as late 1970's. The Machine is absolutely to blame. They wanted votes and have soaked taxpayers and Springfield year after year.
Sorry to the pensioners and current educators, but in a sense you have yourselves to blame. You sold yourselves and sold out the future educators for a few shekels, not to mention your neighbors and fellow taxpayers. Perhaps you should have paid more attention to the astronomical salaries for adminstrators and NOT paid all of those kickbacks to your elected criminal politicians.
For my entire life the war cry of the Union, admisitrators and the educators was "WE deserve more". Well, reap the whirlwind.. Your standard of living was far beyond that of your neighbors, and most middle class families. When the time comes, setlle for 50% of what you were PROMISED, grab your SS and think about those who come after you. We''ll not even mention that the education provided is severely sub standard. Make all of the old excuses you want. The fact is you had a responsibility and did not deliver.
My education came from right across the state line where educators were paid fairly, never went on strike, and provided me with an excellent education.
Impeach Rahm, as in tomorrow, what a douche.
http://chicago.suntimes.com/chicago-politics/7/71/352887/deborah-quazzo-...
Chicago is definitely not a first choice for me, but if I had to live there, it is right on Lake Michigan, there are some attractive things about Chicago. Minus the whole IOU on lotto tickets thing. The public schools are obviously a disaster.
If you live anywhere near Chicago, flee! Crime is going to go off the charts when the schools finally close.
Cut the Teachers in Half to 10k and stick the savings on the next Goldman IPO; Problema Solved; NEXT?
And I should give a shit why?
Keep in mind all those pensions were promised when Chicago has a booming manufacturing sector and the state was very wealthy. Over the years due to free trade and globalization, all those good paying manufacturing jobs are now gone and the state is broke.
Not completely correct. Most of the 80's werre very lean times in the Rustbelt, yet the teachers continued to threaten or actually go on strike. By the 90's manufacturing was decimated and nearly non existent.
Most middle classers found rough treading. Auto, steel, and refining jobs disappeared, never to return, yet the Union and their members continually demanded more. Fact is everybody deserved more. Hard working, loyal folk with modest means made due. Teachers kept demanding.
Not that long ago, the President of the Chicago Teachers Union, Karen Lewis, proposed this solution to the problem of paying the pensions of retired public schools teachers: a tax on transactions at the Chicago Board of Trade and the Chicago Mercantile Exchange. A Chicago libtard journalist also thinks this is a swell idea.
They seem not to realize, that the CBOT and the Merc will leave the state if they are going to be taxed. Oh, the Board of Trade and the Merc could easily move to Florida, or Texas, or Kansas.
The leader of the public school teachers advocates this batshit idea. No wonder the publich schools are in trouble.
Time to throw more money at the problem. It never worked before. Keep on doing it.
That is the communist democrat way. Money to them is just toilet paper with ink.