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Without New State Aid, Chicago Won’t Open This Fall, CEO Says

By Daarel Burnette II — June 03, 2016 3 min read

This post was written by Denisa Superville and originally posted on the District Dossier blog.

News for the Chicago school district went from bad to worse this week, when Chicago Schools CEO Forrest Claypool said that schools won’t open in the fall if the district does not get additional state funding.

In an interview with Education Week in April, Claypool painted a dark picture of what the city’s schools could look like if the state did not step up with more money: larger class sizes, fewer programs, and lost positions.

School officials said at the time that they faced a severe cash crunch and would end the year with enough operating cash on hand for two days—the standard is 90 days.

But Claypool stopped short of saying that schools in the nation’s third-largest school district may not open. Philadelphia, another cash-strapped urban district, considered that possibility two years ago amid similar financial constraints.

With the Illinois fiscal year ending this week without a budget—including a separate education spending plan—Claypool told the Chicago Tribune: “Chicago schools would not open, and I suspect most of the schools in the state would not open.”

My colleague Stephen Sawchuk and I took a deep dive last month into how the nation’s third-largest school district came to the brink of financial collapse and the human costs associated with the year-to-year uncertainties. And Daarel Burnette II, our state education reporter, also explored how the Illinois budget stalemate was affecting districts across the state.

The Chicago school district has been mounting a no-holds-barred campaign to boost state education funding for the city’s schools.

Gov. Bruce Rauner had proposed his own education plan that would have increased state education funding by $55 million. But CPS officials did not like Rauner’s plan, saying that it would still cut the city’s school’s funding by $74 million.

The district faces a $1 billion budget deficit this coming year. With a series of credit downgrades, it may not be able to borrow more money at sustainable interest rates. Earlier this year, the district sold $725 million in bonds at a very high yield, 8.5 percent.

“We found the last investor willing to buy sub-junk credit from us,” Claypool said. “We finally have to balance the budget. We can borrow no longer, we can defer no longer, we can kick the can no longer.”

The district also has an expired contract with its teachers union, and it has contended that it cannot afford the union’s demands. Claypool has also said that the district would not agree to a labor contract that will add to the school district’s deficit.

Officials from the teachers’ union did not take kindly to Claypool’s prediction that schools may not open in September without state aid, and they blamed the governor, Mayor Rahm Emanuel, and school district officials for the current crisis.

At a press conference on Thursday, CTU Vice President Jesse Sharkey said that Claypool’s statement was “an admission of failure,” and he urged Mayor Emanuel to “show some leadership” and come up with a revenue-producing plan to fund the schools.

The union had proposed its own set of measures, including new taxes, that it says will raise about $500 million for the school system. But Emanuel has panned those suggestions.

“Running down to Springfield and begging for money is not a plan,” Sharkey said.

Sharkey criticized the district’s new campaign “20% for 20%,” saying that the district needed revenues not slogans.

The district’s “20 % for 20%" campaign is intended to advance the argument that the city contributes about 20 percent of the state income tax, has 20 percent of the students, yet receives only 15 percent of state funding. Claypool argues that the current funding system costs Chicago’s schools $500 million annually.

And Sharkey accused Gov. Rauner of holding Illinois’ children “hostage” to his agenda.

CTU president Karen Lewis said that the union might be willing to forego raises amid its negotiations with the district.

Still, Sharkey said that the union was willing to strike over the district’s proposal to end the long-standing practice of picking up 7 percent of union members’ pension payments. The union is planning a June 22 rally downtown Chicago, he said.

Sharkey said that Claypool may be right that without state funding schools in Chicago and others around the state might not open in the fall.


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A version of this news article first appeared in the State EdWatch blog.

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