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.
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I remember Obama making big promises to all the black people in Chicago.They all got conned into voting for a fuckin' idiot.
These people that created this collosal monster of a mess are educators?
Don't act so surprised
this is exactly where the Federal Reserve and a fiat, unbacked currency backs up the corrupt, so-called "progressive" nanny state.
They should have been bankrupt years ago - but everyone knows that they will be bailed out by state and Fed.gov
public schools are totally over-rated. A kid who stays at home and reads books for 6 hrs a day, plus crunch numbers, etc, will be 1000 x smarter than the avg dufus out there on the street the taxpayers wasted $30,000 per year on. And you can go online and get all the classics free, and a substantial treasure trove of other worthy books free, and you can get textbooks for math and calculus, science, law, music, whatever, you name it, a few editions back for pennies, or free as well.
A home schooled kid ends up much smarter, and saves us a lot of money. As a bonus, they wont be indoctrinated by the scum state demons, the doctrines from hell.
I've always made my case by observing nature. Few species have their offspring which are raised by others that end up being successful. Even in herds, the offspring stick next to their mothers. With children having genetics aligned with that of their parents, it makes sense that learning and skills would be chanelled naturally in their presence. Weakened families result in government filling in the gaps and taking more control and power. It's in your face everyday out there.
What do you really expect?
When you have the communist democrats in charge?
FUBAR!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
I've read that in the old Soviet Union, where the leaders always promised utopia, citizens were not allowed to point out that utopia had not yet happened. They were expected to nod their heads in positive affirmation and exclaim "Today is utopia!" So there you go Chicago! Today is utopia!
exact same scenario in Detroit
Another Democrat bastion of communist utopiaism.
My neice got a job teaching Spanish at the CPS with a starting salary of more than 80k. Who the hell pays a spanish major from a state college 80k for a starting wage ... the government, only.
Yeah, but she is helping to destroy American culture by making sure people do not have to assimulate. So it's worth it.
And Barry is doing the same thing on a national level. The pos has added more to the national debt than every other president combined. And not a peep from the msm about it. Liberals are truly sick twisted bastards.
www.usdebtclock.org
DOOMED!
And the next President will probably follow suit. Exponential functions always play out like that. The next doubling is always more than all the others combined. Thankfully Americans don't understand this concept or else there'd be real panic in the streets...
looks like mayor emanuel keeps rahming them. political agenda trumps common good and common sense under the current bunch of politicos.
This is gonna end REAL bad.
Actually, at the moment it looks like it's ending real good.
CPS: Waaaaah, I need money.
Governor: Go get a fucking job, you lazy piece of shit.
The school district will sell bonds at any rate to anyone dumb enough to buy them - but - like Confederate Bonds, don't expect much of a return unless they achieve a collecter status. I'd rather keep my Stonewall Jackson $1000 bond, worth a lot more.
Do you all want to see Chicago murder crime statistics? Here is the website that tracks it, appropriately named.
www.heyjackass.com
19 killed so far this year, 120 total shot so far this Jan 2016.
looks like mayor emanuel keeps rahming them. political agenda trumps common good and common sense under the current bunch of politicos.
Tell the public parasite to get in line behind Illinois lottery Winners (who deserve it more)
Wouldn't it be ironic if some Sucker won the Powerball and got nothing except a card of thanks from the CPS?
Just a note...they are paying out lottery winners now. They did pass a spending bill for some "critical" things and it was included.
What Springfield considers "critical"? Well that's a whole other discussion.
Okay, it's math time.
Less than 400,000 students divided by more than 20,000 teachers leaves us with a teacher to pupil ratio of more than 1 teacher for every 20 students.
In all my life, I don't think I ever attended a class that wasn't in the 30-1 range except for a few honors and AP classes. So what's up with that shit? I wonder how many administrators are piled on top of that obscene ratio?
Oh, and think about this for a moment.
Take one class of 30 kids. Assume that the state pays 15,000 a year per head for educating them. That's 450,000 a year for every classroom.
You could buy a house, fill it with computers, pay 150,000 for staff, and still have money left over at the end of every year-- when you give the computers away to the kids and the house gratis to one lucky family before buying new stuff for the next school year.
People have no real comprehension about how much money is actually being wasted in the Adolf Hitler Schools.
And the results are exactly what they want them to be-- just enough learning to follow instructions from their thought leaders.
First of all, I need to commend your financial " literary growth" on Zero Hedge.
If I were a teacher, it would be mandatory reading.
Children are taught how to conform, and never, how to balance an "check book".
I commend you.
Thanks, I think.
Statistics are the way in which unpleasant facts are hidden in plain sight for everyone to see and yet not understand.
Public schools in the USA are much more a property-tax paid child day care system than any kind of education, which ranges in quality from non-existent to mediocre.
I had to self-educate myself in math and science because the teachers in the public schools in my ghetto were mostly incompetent and taking out their frustrations and despair over their miserable lives on the students. The general science teacher was a drunk and used to put me in charge of teaching the general science class to my student peers while she went out to suck pain-relief from a bottle.
I was a little more fortunate. The Advanced Placement program was just getting started, so they took the very best students (including me) and put them in with the very best teachers-- which, of course, robbed those who really needed instruction from the most capable instructors.
Crap deal for everyone else in order to create an intense experience for the favored few. My senior English class had two teachers-- the department head and the teacher with the most seniority for a class of 17 kids. I think the teachers loved every minute of it and thought of it as some sort of reward for putting up with all the other boneheads.
The AP World History class which technically covered two periods in a row didn't require any attendance at all and was taught by the school principal, Doctor Dean. Once a quarter or so, he'd slip us a note suggesting that we show up so he could ask if we needed anything from him. Answer: no.
If it were me, I'd put the super teachers in with those poor souls who need the benefit of their expertise but that's not how the reward system of the world is run.
Go T-Birds.
"...just enough learning to follow instructions from their thought leaders."
You forgot to add "...and continue to re-elect democrats."
Every day Chiraq looks more like Iraq.
Why don't they just close the schools down and mandate home schooling or at least strongly encourage it and consolidate what's left. Budget shortfall solved.
Benefits:
1. Reduces or eliminates burdensome costly political bureaucracy and the constant conflict and legal issues resulting between School Administration staff and Teachers Unions.
2. Transfers property, tax, maintenance, liability and other current school facility operating expenses to the parents.
3. Encourages smarter students since it is a long proven fact that homeschooling students learn more, faster and are smarter than public school students on average.
https://www.hslda.org/docs/nche/000010/200410250.asp
http://psycnet.apa.org/journals/cbs/43/3/195/
4. Eliminates the immediate school budget issues plus future pension payment shortfalls and future lawsuits.
5. Should result in a tax break for all U.S. Citizens and "voluntary" tax payers. - Steve Miller, former IRS Director
https://www.youtube.com/watch?v=XNICz9CZOgw
6. Frees students from the involuntary brainwashing such as the Communist Core Curriculum and other state (actually corporate) sponsored indoctrination, psychological crimes against humanity, mental and emotional terrorism.
7. Teachers can become private tutors as needed and make higher salaries. (Approx. hourly rate for Chicago $60-$75 per hour)
8. Closes down dangerous human child factory farms, prisons and criminal breeding grounds now called schools.
9. Increases safety of all teachers. (The last teachers in my family quit due to potential of violence, threats of violence or actual violence by the junior thugs being groomed inside the current school prison system.
Of course you could always eliminate all your taxes and free yourself from corporate slavery by just ending your U.S. Citizenship. If you like being an American you can keep being an American.
Maybe as a first homeschooling project you could teach your children how you freed yourself and them from corporate slavery which was a Corporation operating fraudulent as a Country called the "United States" a "Federal Corporation" (28 US Code § 3002 section 15). Start with answering the thesis: Why did the former IRS director Miller & House Rep. Xavier Becerra say taxes are voluntary when if you don't pay taxes you will be publicly defamed as a tax evader, terrorized and possibly put on trial (fraudulently) for not voluntarily paying?
That is if some Corporate bureaucratic agents and armed thugs don't try to threaten you out of your "voluntary" compliance or kidnap and jail you and your children to force you into remaining a corporate slave first.
If you and your children know who the KKK are Kim, Khloe & Kourtney but have no idea what I'm talking about above then they're studying the wrong curriculum. Good luck.
looks like mayor emanuel keeps rahming them. political agenda trumps common good and common sense under the current bunch of politicos.
You're right it is pretty much the same thing in politics from all sides.
As for the Kardashians that was only one example who everyone is familiar with that is highly public. It would have been more accurate to say the propagandists as whole leading everyone astray with various types of distractions.
Rauner was elected in 2014. Look at this map of the election results:
http://www.politico.com/2014-election/results/map/governor/illinois/#.Vp...
The Democrat won heavily populated Cook County, where Chicago is. Rauner won the rest of the counties.
The voters outside of Cook County said, "Hey Chicago, you caused your own mess, and we ain't going to bail you out."
Go long dog food?
I thought this would be a story about how illiterate Chicago city school students were at graduation. The education bubble inflated by ignorant taxpayers who vote in the largely Democrat office holders who in turn overly reward the educators with large amounts of cash and promises they cannot keep. And still with all that cash chucked into the public schools, the kids have become more bubble headed than ever in U.S. history and in comparison with even third world countries.
Public education wasn't meant to educate... just enough to operate the machines.
This is your typical result of inner city schools, they think money will fix education yet fail to see the societal impact that these poor kids don't give a shit about speaking proper English!
It's the Republicans fault! Didn't they hold some offices about 50 years ago in Chicago somewhere? Anyway, we have to disregard this news, because the President of the US says everything is fine and he is totally optimistic about the future. And we know he always tells the truth.
Just to clarify something I keep seeing, lottery winners are paid out in Illinois now. That started a few weeks or a month ago again. For whatever that's worth...I just keep seeing references to it on the board so I thought I would fix that.
But the disaster that is Illinois is largely created and controlled by one man...and his name is Michael Madigan, Speaker of the Illinois house now since 1983.
While governors galore have found their way to various penal institutions over the last few decades, Mike Madigan (despite his consolidated power over Illinois government) never seems to "get caught" doing anything wrong. It must be all despite Mike I guess (sarc)...or I guess a "conspiracy theorist" might even wonder if Mike didn't have a lot to do with those GOVs ending up taking the fall a time or two.
But as the heat really starts getting hot, Mike's daughter become IL AG in 2003...that's gotta work out well covering for dear old dad eh?