SUBSCRIBE to Capitol Fax      Advertise Here      Mobile Version     Exclusive Subscriber Content     Updated Posts    Contact
CapitolFax.com
To subscribe to Capitol Fax, click here.
14 months of revenue for a 12-month budget

Wednesday, Jun 18, 2014

* I missed this Phil Rogers story from the other day. Wow

Ten months after the biggest realignment in CPS history, the stage is set for a cataclysmic budget debacle, which could top $1 billion.

“It’s completely nuts,” says Chicago Teachers Union vice president Jesse Sharkey. “And unless we do something about it, we’re going to be facing a billion dollar budget crisis.”

At issue is a board plan to take 14 months of revenue for the coming 12 month school fiscal year, essentially borrowing money from the 2015-2016 school budget. School board president David Vitale did not dispute the number.

“It does allow us to avoid laying off thousands of teachers,” Vitale said. “It will lead to a serious problem a year from now, but the alternative is not very pretty, and it’s our judgment that we should do everything we can to maintain the quality we can for our kids.”

The CTU says it sees a more sinister motive for the budget sleight of hand.

“They don’t want to do it during a mayoral election,” said Sharkey. “So they’re kicking it to the following year.”

Man, oh, man.

- Posted by Rich Miller        


35 Comments
  1. - Shemp - Wednesday, Jun 18, 14 @ 10:08 am:

    Mind boggling.


  2. - OneMan - Wednesday, Jun 18, 14 @ 10:13 am:

    You think Quinn is calling his budget guy right now?


  3. - wordslinger - Wednesday, Jun 18, 14 @ 10:16 am:

    See? All the problems in the Chicago Public Schools are the teachers’ fault.

    If only a sharp businessman ran the school board, and a legendary (in his own mind) politician was mayor…..


  4. - Brilliant - Wednesday, Jun 18, 14 @ 10:18 am:

    Similar though less transparent moves being undertaken by Chicago for 2015.


  5. - walker - Wednesday, Jun 18, 14 @ 10:19 am:

    I thought the headline was referring to the State budget.


  6. - PhoenixRising - Wednesday, Jun 18, 14 @ 10:20 am:

    From a April 23rd Reboot article…
    http://www.rebootillinois.com/2014/04/23/editors-picks/billmorris/placate-illinois-taxpayers-fix-chicago-public-schools-looming-budget-crisis-2015/7111/?utm_source=daiytip_20140423&utm_medium=email&utm_content=&utm_campaign


  7. - Rod - Wednesday, Jun 18, 14 @ 10:31 am:

    The IL General Assembly helped create this CPS problem by granting Mayor Daley virtually total control over CPS. Why wouldn’t Mayor Emanuel use the CPS lever of power to grant various constituencies perks, like the massive expansion of selective high schools and the cost of many millions of dollars, or the expansion of overcrowded elementary schools in both poor and middle class communities, or air conditioning, and on and on. None of these things CPS can afford to do given the situation with the pension fund and the low property tax rate in the city.

    The Il General Assembly and ISBE do not want to take responsibility for CPS and therefore handed it off to the Office of the Mayor of Chicago who appoints every member of the school board by state law. There is no popular vote for school board members in the city.

    Both the ISBE and the General Assembly are now reaping the fruits of political control over the largest school district in the state. If CPS blows up, the state will have to create the bail out framework just as it did in 1979 which is the last time the district went belly up.


  8. - RonOglesby - Wednesday, Jun 18, 14 @ 10:33 am:

    More budget tricks to kick the can farther down the road.
    CPS has some issues when it comes to management. The way the board is appointed, the one study where something like 40% of CPS teachers w/ kids sent their own kids to private schools, and on and on.

    Add on top of that that the Chicago population is not growing and they are seeing a shrinking number of kids. Yet costs aren’t changing.

    How to fix? no simple solution. But its politically expedient to kick the can down the road and more than likely not have to pay politically for it. Its illinois. Why expect any different.


  9. - Downstate - Wednesday, Jun 18, 14 @ 10:38 am:

    So, Mr. Banker, here is my plan.
    I was able to get a 16% wage increase for next year, because I’m now adopting a 14 month calendar.

    And next year, I’ll likely be able to give myself an even bigger raise!!!


  10. - Mason born - Wednesday, Jun 18, 14 @ 10:38 am:

    14 months for 12 = 10 months for 12 next year. Whoever proposed this ought to resign.


  11. - OneMan - Wednesday, Jun 18, 14 @ 10:51 am:

    14 months for 12 = 10 months for 12 next year. Whoever proposed this ought to resign.

    No, they are going to just keep ‘paying it forward’ then in 2021 There is going to be a great new ‘everyone home school for a year’ program


  12. - Steve - Wednesday, Jun 18, 14 @ 11:10 am:

    What David Vitale is also praying for is that the national economy doesn’t fall into to a recession. This slow recovery started in June 2009. If the economy should go into a recession in the next 24 months things will be much more “challenging”. CPS doesn’t have enough of a reserve fund or a backup plan for the next recession. This isn’t a small issue. Lastly, who else but the public sector could get away with such “kinky” accounting?


  13. - Downstate Illinois - Wednesday, Jun 18, 14 @ 11:17 am:

    There ought to be a law against this, or course, they would just ignore it.


  14. - Demoralized - Wednesday, Jun 18, 14 @ 11:19 am:

    ==Lastly, who else but the public sector could get away with such “kinky” accounting?==

    Not real in tune with the corporate world are you. They’ll get away with it for a while until the bill comes due. Same thing happens in the corporate world. They’ll get away with accounting gimmicks for a while, and then they’ll turn into the Enron’s of the world.


  15. - Yellow Dog Democrat - Wednesday, Jun 18, 14 @ 11:22 am:

    OneMan: Hilarious!


  16. - wordslinger - Wednesday, Jun 18, 14 @ 11:22 am:

    It’s a win-win for Emanuel — but only him, not citizens, students, teachers, etc.

    Kicks the can down the road until after the election, then he can use the “crisis” he created to take revenge on the teachers who beat him like a rented mule during the strike.

    Nice to see such sold “leading” citizens on the board enabling this selfish and petty fiasco.


  17. - RonOglesby - Wednesday, Jun 18, 14 @ 11:23 am:

    @Demo
    Yes, but in Enron and other cases people get prosecuted (or should). Will any of that happen here? probably not. As I mentioned above the only recourse is political and in Chicago there is no recourse.


  18. - Steve - Wednesday, Jun 18, 14 @ 11:27 am:

    - Demoralized -
    No company listed on the NYSE could keep the books that CPS has for years and years without the SEC knocking on there door. Pension plans in the corporate world have to be at least 80% funded, those that aren’t have legal consequences.


  19. - wordslinger - Wednesday, Jun 18, 14 @ 11:27 am:

    Dude, hinky accounting in the private sector is the American way.

    If you’re privately held, you hide as much as you can from the tax man and run as many personal expenses as you can through the business to knock down profits and benefit yourself.


  20. - a drop in - Wednesday, Jun 18, 14 @ 11:35 am:

    If this is true, Rahm is not running for reelection. This is a poison pill for the next mayor.


  21. - zatoichi - Wednesday, Jun 18, 14 @ 11:36 am:

    This is a shock? DHS has done the same thing in past years when some programs started running out of cash in March.


  22. - RonOglesby - Wednesday, Jun 18, 14 @ 11:40 am:

    @word,
    But a publicly held company cannot to that and pass an audit/SEC scrutiny without fines and possible charges depending on the actual violation. I think the thing that gets people here is that those in charge think it is just fine and many (even here commenting) seem to be ok justifying because some others may get away with it.


  23. - wordslinger - Wednesday, Jun 18, 14 @ 11:43 am:

    –Pension plans in the corporate world have to be at least 80% funded, those that aren’t have legal consequences.–

    Consequences being walking through bankruptcy court to shed pension, laying off liabilities on the PBGC, then going back to business like nothing happened.


  24. - Bill White - Wednesday, Jun 18, 14 @ 11:45 am:

    Its the same problem Springfield faces - no one wants to be accountable for choosing between:

    A. More revenue

    B. Devastating cuts

    Thus, “magic tricks” and denial have become standard operating procedure.


  25. - Hit or Miss - Wednesday, Jun 18, 14 @ 11:47 am:

    Any such plan is fiscally irresponsible. Appears to me to be a trick to put off telling people the ‘bad news’ until after the next election.


  26. - Bill White - Wednesday, Jun 18, 14 @ 11:47 am:

    In Rauner-world, looting private sector pension plans is old school stuff. And since most private sector pension funds have already been looted, its time to find new targets.


  27. - wordslinger - Wednesday, Jun 18, 14 @ 11:49 am:

    Ron, I’m not sure that the SEC is the barracuda some are making them out to be.

    As far as the audit requirements, well, the outside auditors are in business to make money, too.

    My sister ran a private pension and benefits fund and for a number of years. Arthur Andersen (the late Chicago company, not our paisan) would send out some kids, they’d take a cursory look at the books and then try to upsell her on “consulting service.”

    They were more salesmen than auditors.


  28. - Chris - Wednesday, Jun 18, 14 @ 12:29 pm:

    “If this is true, Rahm is not running for reelection.”

    Why? Seems like a classic ‘put off the bad news til after election day, then have 4 years to figure it out’ move.


  29. - Union Man - Wednesday, Jun 18, 14 @ 12:45 pm:

    Fire all the teachers, let the kids roam the streets for a year or two until the budget is balanced. CPS just like the state knew a day of reckoning would come and they just ignored it!! Let them take the fall!! Not the teachers!! Someone needs jail time!!


  30. - Demoralized - Wednesday, Jun 18, 14 @ 12:46 pm:

    @Steve:

    We have been subject to consequences from the SEC for not disclosing our pension liabilities accurately in our bond sales.

    I guess my point is no matter the gimmick, it will eventually come back to bite you in the rear end, whether you are a government or not.


  31. - Arthur Andersen - Wednesday, Jun 18, 14 @ 1:07 pm:

    Thanks for the clarification, word.

    Pointing out (with heaping helpings of snark) the fiscal follies of Blagoworld was how this handle came to be, for those that don’t know.


  32. - Precinct Captain - Wednesday, Jun 18, 14 @ 3:45 pm:

    Enron & the SEC was the same old story it’s always been and is still today. The SEC wasn’t paying attention because the ratings agencies and independent auditors were giving the client what they wanted to hear. CPS really oughta just get in on that game.
    http://usatoday30.usatoday.com/money/industries/banking/2002-10-06-sec_x.htm


  33. - Robert the Bruce - Wednesday, Jun 18, 14 @ 5:04 pm:

    ==Nice to see such sold “leading” citizens on the board enabling this selfish and petty fiasco.==

    I wonder if there was any dissent - does retired Northwestern University president / CPS board member Dr. Bienen really need to do whatever the mayor wants? http://www.cpsboe.org/bios/4


  34. - Bill White - Wednesday, Jun 18, 14 @ 10:11 pm:

    In related news, there are calls to legalize insider trading:

    http://www.cnbc.com/id/101766558

    Yup, the SEC is a barracuda and 401(k) managers have our best interests at heart.


  35. - Rich Miller - Wednesday, Jun 18, 14 @ 10:22 pm:

    ===there are calls to legalize insider trading:===

    One call. From an obvious moron.


Sorry, comments for this post are now closed.


* Reader comments closed for the weekend
* CUB Poll: 84% Oppose Exelon Bailout - Solar Poll: 81% Oppose Demand Charges
* SUBSCRIBERS ONLY - New cable TV buys and fundraiser calendar
* Question of the day
* *** UPDATED x1 - Friends of the Parks responds *** Lucas pulls plug on museum
* "Dead. Yes, dead."
* Radogno shares some deets on stopgap, blames Chicago for holdup
* Maybe this will convince Democrats to cut a deal?
* Nobody's right if everybody's wrong
* Another way Chicago is behind the times
* More on that Cullerton meeting
* Creating a workaround for new CPS debt?
* Settlement talks in Duckworth case "initiated by the judge"
* Hostage dies
* Close on 6-month stopgap, not there yet on K-12
* Yesterday's blog posts

Support CapitolFax.com
Visit our advertisers...

...............

...............

...............

...............

...............


Search This Blog...

Search the 98th General Assembly By Bill Number
(example: HB0001)

Search the 98th General Assembly By Keyword

  
* Android might be getting another navigation button redesign
* OK, Europe: It’s your move
* You can help stop human trafficking with the TraffickCam app
* iPhone OLED progress, Alcatel Idol 4 retail & more – Pocketnow Daily
* Galaxy Note7 confirmed as device name, Samsung does indeed skip a number
* Incipio will purchase Skullcandy for $177 million
* Okay, we’ve seen this vivo X7 Plus before…

* Smooth sailing for Sale in MLB-best 13th win
* Smooth sailing for Sale in MLB-best 13th win
* Quintana aims to shake off June struggles
* Morneau takes BP for 1st time since surgery
* Heavy usage taking a toll on White Sox bullpen
* The other time the White Sox hit seven homers
* Less than 5 days left to cast your All-Star vote

...............


Main Menu
Home
Illinois
YouTube
Pundit rankings
Obama
Subscriber Content
Durbin
Burris
Blagojevich Trial
Advertising
Updated Posts
Polls

Archives
June 2016
May 2016
April 2016
March 2016
February 2016
January 2016
December 2015
November 2015
October 2015
September 2015
August 2015
July 2015
June 2015
May 2015
April 2015
March 2015
February 2015
January 2015
December 2014
November 2014
October 2014
September 2014
August 2014
July 2014
June 2014
May 2014
April 2014
March 2014
February 2014
January 2014
December 2013
November 2013
October 2013
September 2013
August 2013
July 2013
June 2013
May 2013
April 2013
March 2013
February 2013
January 2013
December 2012
November 2012
October 2012
September 2012
August 2012
July 2012
June 2012
May 2012
April 2012
March 2012
February 2012
January 2012
December 2011
November 2011
October 2011
September 2011
August 2011
July 2011
June 2011
May 2011
April 2011
March 2011
February 2011
January 2011
December 2010
November 2010
October 2010
September 2010
August 2010
July 2010
June 2010
May 2010
April 2010
March 2010
February 2010
January 2010
December 2009
November 2009
October 2009
September 2009
August 2009
July 2009
June 2009
May 2009
April 2009
March 2009
February 2009
January 2009
December 2008
November 2008
October 2008
September 2008
August 2008
July 2008
June 2008
May 2008
April 2008
March 2008
February 2008
January 2008
December 2007
November 2007
October 2007
September 2007
August 2007
July 2007
June 2007
May 2007
April 2007
March 2007
February 2007
January 2007
December 2006
November 2006
October 2006
September 2006
August 2006
July 2006
June 2006
May 2006
April 2006
March 2006
February 2006
January 2006
December 2005
April 2005
March 2005
February 2005
January 2005
December 2004
November 2004
October 2004

Blog*Spot Archives
November 2005
October 2005
September 2005
August 2005
July 2005
June 2005
May 2005

Syndication

RSS Feed 2.0
Comments RSS 2.0
WordPress

Loading


* Local Illinois legislators say party leaders co.....
* Illinois Republican Criticize Democrats For Not.....
* Road projects at risk in Illinois budget stando.....
* Road projects at risk in Illinois budget stando.....


* Economic woes cause drop in number of Illinois boaters
* Rauner signs ID law making Illinois comply with federal law
* Illinois police sue town, claim body cameras record nonstop
* Study: Rotting trees caused mysterious holes in huge dunes
* 1 dead, 1 injured after boats crash on Rock River
* US Rep. Duckworth settles workplace retaliation lawsuit
* Workplace retaliation lawsuit against Tammy Duckworth settled
* Chicago police arrest teen in slaying of city dispatcher
* Lucas abandons plan to build museum in Chicago after lawsuit
* Illinois women hit hard by state budget impasse

* Stalemate threatens $2B in road projects
* Illinois women hit hard by state budget impasse
* Economic woes cause drop in number of boaters
* Chicago school money seen as potential deal-killer
* Chicago school money seen as potential state budget deal-killer
* Survey: Nearly 1 million human service clients affected by budget impasse
* Illinois lawmakers to reconvene Wednesday as budget deadline nears
* Illinois State Museum given path to accreditation
* Illinois insurance co-op sues feds over health law payments
* Gun bill at Illinois Capitol gets support from Rifle Association

* Who's sitting in Chicago's cushiest board seats?
* The fall and rise of Chicago real estate in three acts
* At Chicago law firms, a salary war breaks out after years of deep freeze
* Why overbanked Chicago has even more banks
* One suburban manufacturer's answer to shortage of skilled workers


* Editorial: A steep price when jail guards abuse sick time
* Laura Washington: Grieving father serves food to soothe the soul
* For the Cubs to get where they want, bats will be necessary
* Fire officials: 7 seriously injured in crash on Dan Ryan
* Three shot in North Lawndale
* Monday Letters: Rauner is driving faculty, students from Illinois
* Andy Shaw: Quinn is back to shaking up political system
* Kapos: The Renaissance man who’s still building parks in Chicago
* Kanye West lounges with naked Bush, Swift in ‘Famous’ video
* Handicapped man reported missing from Chatham


* Old East Aurora High School stadium to get rousing farewell party
* At least 6 stabbed at neo-Nazi event outside Capitol in Sacramento
* Lawndale shooting sends 3 to hospital
* Pope Francis says gays and others marginalized deserve an apology
* At least 6 stabbed at neo-Nazi event outside Capitol in Sacramento
* British political turmoil deepens after EU referendum
* IOC official says it's unclear if Rio doping lab will be ready for Olympics
* Sunday's recap: White Sox 5, Blue Jays 2
* 6 badly hurt included 2 kids in Dan Ryan wreck
* Sunday's recap: Marlins 6, Cubs 1


* Illinois women hit hard by state budget impasse
* Economic woes cause drop in number of boaters
* Chicago school money seen as potential deal-killer
* Chicago school money seen as potential state budget deal-killer
* Angie Muhs: The threshold for national news on our front page
* Their View: Separation of powers prevails
* Statehouse Insider: Lawmakers coming back to Springfield? We're saved
* Bernard Schoenburg: Davis opposes school bathroom transgender rules from DC
* Dr. Rebecca Green: When will the gun madness end?
* Charles Krauthammer: Clinton offers empty rhetoric


* Accidents clog I-74 near Mahomet
* College football extra: 2016's top 10 running backs
* Getting Personal: Mike Metzler
* Letter from Birdland: A look at the colorful past, present of Ireland
* Susan McKinney: Eric Liddell: The runner who lived and died for God
* Reluctant Townie: It's my birthday and I'll write what I want to
* Kelly Strom: Behind the Music
* For the retirees, June 26-July 3, 2016
* Patricia Hruby Powell: Many voices tell of 'Incident on the Bridge'
* Library events, June 26-July 3, 2016


* Get rabies shots for pets Wednesday in Elk Grove
* Mt. Prospect food pantry, in low supply, asks public for donations
* District 128 board to talk budget
* Ortiz wins another term
* Last call for art submissions

* House lawmakers overcome hurdle on key tra...
* Rodney Davis talks funding with Bloomingto...
* The agency that fought Illiana gets a new ...
* Rep. Dold takes educational cruise down Ch...
* Lawmakers decry high turnover rate of VA h...
* CBD Oil, and politics
* Simon considering state Senate bid
* Killer Congressman Tom MacArthur trying to...
* Shutdown? State may not notice
* Rep. Bob Dold

* Illinois to get $17 million for HIV assist......

* Is Tammy Duckworth a sure bet to beat Mark......
* Duckworth Settles Workplace Retaliation Ca......

* Paul Ryan isn’t the first guy to try to stop a sit-in.
* Six Clinton delegates on the Platform Committee who voted against a $15 minimum wage.
* "Pride at Montrose" Happening At The Lakefront 11am-6pm
* A Pride Of Lion(s)
* Local Pride!
* #Oaxaca.
* The Sunday Times.
* #TestForFlu Bug Hits Town
* Edgewater Shooting Ends At Foster/Sheridan
* "We Are Uptown Proud!"


* Emergency Management Officials, National Weather Service Encourage Winter Preparedness - November is Winter Weather Preparedness Month in Illinois
* Keep Your Family Safe This Winter - November through February are leading months for carbon monoxide related incidents
* Governor Takes Bill Action
* Illinois Department of Labor Director Hugo Chaviano Awards Governor’s Award for Contributions in Health and Safety to the Illinois Refining Division of Marathon Petroleum Company LP
* State Regulator Elected Treasurer of Interstate Medical Licensure Compact




Hosted by MCS -- CapitolFax.com Privacy Policy -- SUBSCRIBE to Capitol Fax -- Advertise Here -- Mobile Version -- Contact Rich Miller