CHICAGO – It’s T-minus one week for Chicago Public Schools.
As schools let out for the summer, CPS administrators are scrambling to come up with a more than $600 million teacher pension payment due at the end of the month and the district has zero reserves, according to media reports.
The problem is further compounded by a more than $1 billion school budget shortfall for the next fiscal year and an angry teachers union hell bent on securing another raise the district can’t afford. With no plan, no money and no where to turn, Chicago Mayor Rahm Emanuel seems to be focused solely on a state bailout as the solution.
“Springfield has to step up and help in this case, not only as it relates to just the pension payment, (but also) the educational opportunities of our children,” Emanuel said, according to the Chicago Tribune. “Because a payment will then begin to impact … the classroom.”
And CTU could soon partner with its mortal enemies at City Hall to lobby state lawmakers for more money.
“Right now, the district needs us,” CTU VP Jesse Sharkey told the news site. “The politics of (Chicago Mayor) Rahm Emanuel going to Springfield are a lot different than the politics of Rahm Emanuel and (CTU President) Karen Lewis going to Springfield.”
The dire financial situation comes amid a federal investigation into a $20 million no-bid contract to a previous employer of former CPS superintendent Barbara Byrd-Bennett, who resigned this month.
“It feels like a complete mess,” Better Government Association senior editor Sarah Karp told ABC 7.
Karp doesn’t think recently elected Republican Gov. Bruce Rauner, who ran on a platform of fiscal restraint and criticized union influence in Illinois, is receptive to calls for a bailout. He previously suggested that bankruptcy may be the best way out for CPS, ABC 7 reports.
“Now, Chicago Public Schools does not have somebody in the State House that is a Democrat or is seemingly sympathetic at all to what’s going on here,” Karp said.
Meanwhile, school ended for the summer on Friday, and principals around the city are left scratching their heads in planning for next school year.
“Normally you do your planning in the summer and you can’t do too much planning without the actual dollar amount,” Coles Language Academy principal Jeff Dase told ABC 7.
Dase said many Chicago principals are concerned that the budget turmoil, and looming possibility of layoffs and program cuts, could convince many of the city’s teachers to seek jobs elsewhere.
The Tribune reports the city council could authorize CPS to increase taxes on residents, or secure some sort of bailout, or negotiate concessions with CTU, but not even all three combined could put the budget back on track. And then there’s another $228 million payment coming due for costs related to interest rate swaps on the district’s debt.
“ … (E)ven if CPS wins concession from the City Council, state lawmakers and CTU, the district won’t be able to close its annual $1 billion budget gap, according to a May 22 report by Ernst & Young, which spent four weeks meeting with school finance officials and analyzing budget documents,” the Tribune reports.
“The report shows that even with a capital improvement tax, a separate, even-larger property tax increase, additional state aid, increased state funding of teacher pensions, concessions from the CTU and $150 million with of budget cuts, CPS would still face an annual $350 million shortfall.”
Next June’s teacher pension payment is set to balloon to $700 million.