Thursday, January 21, 2016

Chicago State University Now Preparing For Bankruptcy, May Skip Bond Payments

The news coming out of next door Illinois keeps getting worse. Now Chicago State University is drawing up bankruptcy-like contingency plans to remain solvent, which may include skipping bond payments. From Bloomberg:
A university in Chicago’s South Side is on the brink of running out of money as soon as March because of Illinois’s budget impasse, providing the most prominent example yet of the consequences of the seven-month political standoff.
Chicago State University, a 5,200-student institution founded in 1867, is considering drawing up a financial exigency plan, equivalent to college bankruptcy, as soon as next month, according to Tom Wogan, a spokesman. The move would be a first step to keep the school afloat as it hemorrhages cash to cover the loss of state funds. All options are on the table to get through the current semester, including missing payments on $12 million of outstanding tax-exempt bonds, he said.
The school, with a 70 percent black student body, would become the most visible casualty of the stalemate between Republican Governor Bruce Rauner, a former private-equity executive, and legislative Democrats, with leaders from Chicago, over a spending plan for the year that began July 1. While other public universities can draw on endowments or raise funds from alumni as the impasse persists, that’s not the case at Chicago State, whose students count on federal and state grants.
“A place like Chicago State University doesn’t have the same political clout of other institutions,” said Howard Cure, head of municipal research in New York at Evercore Wealth Management, which oversees $5.9 billion. “They serve a segment of the market that’s often overlooked, and some of the people who can benefit the most from a higher education degree. It’s a completely different -- and completely vulnerable -- business model.” . . . 

6 comments:

Anonymous said...

The bond holders who invested in those instruments need to take the proffered haircut and pray that Illinois will tell its legislative leaders to change the serial cartoon that is the running pictures of their collective heads. This little problem is designed to pressure Governor Rauner to capitulate and appease those who will not be appeased. We often see group stupidity in action in small minded legislatures. Public sector unions in Illinois have allowed themselves to become public enemies. They have long been recognized as such in Indiana, most pertinently was their recent funding of the flee baggers to Illinois of all places rather than maintain their obligations. Voters punished them. Of course, I'd opine that it was the rural voters of Indiana that did so...the ones most dissed by our stupid Republicans who seem to think that all of a sudden we'd forget how cozy their donors have been with the other party (similar to Illinois where there is a Combine that runs things behind the scenes)...we'd forget our residual distrust of Republicans...the most stupid of whom seem to believe that the people have all of a sudden "Seen the Light" of Republican Virtues.

Anonymous said...

With a Rauner proposed 31% cut in state supported higher education, CSU is only one of several Illinois universities who are confronting the prospect of going cold turkey. The Chicago public school system faces bankruptcy and possible state takeover of the system without sufficient state funding. It looks like charter school privatization is the goal of the tea party governor.
Rauner's proposed budget also cuts an additional $200 million plus from other public services including burying the homeless, HIV programs, and assisting those with autism. With state corporate revenue at 9%, it would seem that there would be room to maintain services that affect the lives of Chicagoans. If it is the idea of the billionaire governor to intentionally not reach a budget agreement and let institutions wither and die, then Illinois may become another Kansas and Chicago another Flint.

Anonymous said...

That would be "so called" "higher" education. Would anyone really miss CSU or about half of Indiana schools similar? I think it was Kansas that had the yellow brick road, Dorothy, and some critter awarded a worthless piece of paper....just like Indiana's 15,000 Mike Pence High School Grads who, believing they are college material go on, apply, are accepted, and then informed their education was so deficient that they require "remediation". The Bosma/Long Axis continues this policy of lying to kids about the quality of their education and they seem to pine for the day when they could lower the cut scores on ISTEP to a level of rigor so low that all kids would be above average. There are no failing schools in Indiana...for the NOT LOOKING. Think about, for a change, all those kids in Indiana with a deficient "education", a worthless High School Diploma for College level work (or any work requiring a high school education, for that matter) who DON'T get the word about how they were lied to. The "remediation" doesn't really work well. Those uniformed spend their lives in ignorance and lower standards of living than they could have had IF their schools (all of whom were rated so highly) were held to account.
Think problem. If you wanted to demolish student academic achievement from what was reported last year to what is going to finally be reported this year...what, exactly, would you have done? Do you really think you could affect student academic performance that drastically with whatever you came up with? So, the student academic achievement didn't DROP at all. The reported scores dropped meaning only that they more accurately reflected actual student academic achievement on a particular ISTEP. The difference is not on teachers, schools, parents or kids. But, it is on Mike Pence, Brian Bosma,and David Long as he exemplars of Indiana educational lying....serial lying and for a long time.
As for Chicago, it long ago was worse than Flint or Detroit but for the same reasons among which are Democrat thieves. Charter schools cost the taxpayers a whole lot less, by the way. Best would be to get OUT of government schooling since it is beyond their competence and it allows too much lying....see Indiana.

Pete Boggs said...

This is liar, not higher "education."

Anonymous said...

If you want to see what a charter school physically looks like just drive by an old America's Best motel location or an abandoned Value City furniture store in a strip mall somewhere.


Pete Boggs said...

Anon 4:31: You describe many public treasury tapped, 5013C fronts...