Wednesday, January 20, 2016

Illinois Proposal Would Allow Chicago Schools To Declare Bankruptcy And Put Under State Control

Illinois Republican lawmakers are unveiling legislation today to allow the financially-strapped Chicago Public Schools to declare bankruptcy and to place the state's largest school system under the control of the state according to the Chicago Tribune. Chicago Mayor Rahm Emanuel has in the past opposed the idea of bankruptcy, instead wanting the state government, which has its own insurmountable debt problems, to bail out the troubled school district. Emanuel is seeking a half billion dollars from the state to bail out the troubled school district.

Democrats are criticizing the bankruptcy idea because it would allow CPS to get out from under its union contracts. Illinois' Republican governor, Bruce Rauner, appeared open to the idea when asked about it by reporters. "I'm worried that the mayor is failing," Rauner said. "The mayor gave in and caved on the (teachers) strike 41/2 years ago. Hurt the taxpayers, hurt the schoolchildren as a result. I'm very concerned about the trajectory of where we're going with CPS. And right now, the mayor's only real message to the state government is 'Hey, we failed financially our schoolchildren, send us half a billion dollars. That's not a reasonable position for the mayor to take,'" Rauner told reporters.

I've said it before, and I still maintain that there is no path to solvency for CPS, the City of Chicago and the State of Illinois unless they all go through bankruptcy. CPS and Chicago can file for bankruptcy under existing federal law, but the state would require permission from Congress, which it has granted on a number of occasions in the distant past. Indiana went bankrupt back in the 1840s because of its reckless infrastructure spending on constructing a series of canals around the state.

An interesting side story to CPS's financial woes. The Chicago Sun-Times reports that the school district lost track of thousands of laptop computers, desks, text books and other equipment left over when it closed 50 schools because of low enrollment.


Anonymous said...

Credit where credit is due. Sometimes republicans get it right.

Illinois Republican “Senator Kirk has once again proven his leadership, by becoming the first Republican Senator to co-sponsor of the Equality Act,” said HRC President Chad Griffin. “His support for the Equality Act sends a strong message that fairness and equality are bipartisan values. It also reflects the view of the overwhelming majority of all Americans who believe that everyone, including LGBT people, should be able to have a fair chance to earn a living, provide for their families, and live free from fear of discrimination.”

Polling conducted by Greenberg Quinlan Rosner (GQR) has found that 63 percent of LGBT Americans report having experienced discrimination, most frequently in the workplace.

GQR’s polling has also shown strong support among Republican voters for the Equality Act’s non-discrimination protections. Nearly two-thirds (64 percent) of all likely Republican voters support protecting LGBT people from discrimination, as do 90 percent of Democrats. Nearly eight out of 10 Americans — an overwhelming majority — support non-discrimination protections for LGBT Americans.

Gary R. Welsh said...

This post has nothing to do with Sen. Mark Kirk, but he doesn't have a prayer of being re-elected now that you brought him up.

Anonymous said...

Let's provide some balance to this article.

As quoted in today's Chicago Sun Times:

"“The governor is defending a school funding system that is separate but unequal,” CPS CEO Forrest Claypool said in a written statement. “Our children are facing systematic discrimination. CPS represents 20 percent of state enrollment but gets just 15 percent of state funding, even though 86 percent of our children live in poverty.

“The missing 5 percent represents nearly $500 million, the exact amount of our budget gap. Our children’s futures are just as important as those in the suburbs and downstate. But the state does not value them equally.”

Quinn also decried the proposed new legislation as Rauner’s handiwork.

“If the governor was serious about helping Chicago students, he should start by proposing — and passing — a budget that fully funds education and treats CPS students like every other child in the state,” Quinn said in an emailed statement."

Rauner, who purchased the Illinois governorship with his wealth, failing to resolve the budget crisis has cost himself any future political office.

Gary R. Welsh said...

CPS could raise a hell of a lot more from the local property tax in Chicago if the TIF districts that encompass the lion's share of the most valuable property in the Loop weren't consuming so much of city's property tax base. Also, CPS has the same problem IPS has in that students and accompanying state dollars are being siphoned off by the growing number of charter schools.

LamLawIndy said...

Look, "fairness" is irrelevant. CPS is broke. The City is broke. The State of Illinois is broke. Either they all eventually enter an orderly bankruptcy proceeding or a disorderly default will come one day.

Anonymous said...

"Where ignorant armies clash by night". If I were the Bankruptcy Trustee in charge of CPS it might take several weeks to restore fiscal sanity but it would require that striking teachers be jailed, and fined, and fired.

Anonymous said...

We, the Citizens, need to be out from the slavery of government pensions. We can't find jobs, while government workers live like kings and will receive payments from us until we die.

Perhaps it would be better to tear down the country and erect a new one that will not subjugate its citizens to being beasts of burden for government employees. If they don't want to tear down the country, default on government pensions.

It's the fair thing to do.

Anonymous said...

3:56 PM - substitute "social security" for "government pensions" in your statement above and see how you like it.

Pete Boggs said...

Intellectually, public / government schools are bankrupt.

Anonymous said...

I know of no Social Security benefit package that affords one the lap of luxury like a government pension.

LamLawIndy said...

Actually, as a self-employed Gen-Xer, I must "contribute" 12.4% of net earnings to Social Security knowing full well that there is no way in HELL that the net present value of my "investment" is positive.

Anonymous said...

Yes, Lam, your contributions are defined.

Government workers' benefits are defined.

Understand the distinction?

LamLawIndy said...

No, not really. I just see 12.4% of my income going down a rathole instead of into my pocket.