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* Amid all the harumphing about no state bailout for the Chicago Public Schools comes this pertinent reminder…
The most pressing financial concern for CPS is a $676 million payment to the Chicago Teachers Pension Fund due on June 30.
CPS has no choice but to make that payment in full, whether Springfield rides to the rescue or not. […]
But after making that payment in full, CPS will have just $24 million left in the bank. That’s enough to cover just 1.5 days of payroll.
Because property tax revenues won’t start rolling in until early to mid-August, that means CPS would essentially be forced to operate “bone-dry” through the month of July.
And that’s probably just the position where the governor wants CPS.
All this murmuring by Democrats about how Rauner will cave on his Turnaround Agenda once stuff starts shutting down ignores the fact that he has put constant fiscal pressure on CPS since he took office. A shutdown would play right into his hands.
Just sayin…
posted by Rich Miller
Friday, Jun 3, 16 @ 9:59 am
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I fear that you’re right. We’re all doomed.
Comment by DHSJim Friday, Jun 3, 16 @ 10:09 am
Might be a good time to consider moving to a different state. Minnesota sounds nice right about now.
Comment by DHSJim Friday, Jun 3, 16 @ 10:11 am
Busloads and Busloads to Winnetka. Check the Board of Elections website and the use waze or mapquest or whatever you want.
This guy is only going to care about the damage he’s doing when his neighbors complain.
No school kids, we are going to Camp Bruce today…and remember when you see the giant houses that the people living in many of them think the system is screwing THEM.
Comment by LizPhairTax Friday, Jun 3, 16 @ 10:12 am
This boil that is CPS has been festering and coming to a head for years. It needs to lanced and totally disinfected. Many will try and blame Rauner, maybe even say he “owns it.” That is short-sighted and incorrect.
Comment by Big Muddy Friday, Jun 3, 16 @ 10:14 am
I believe the private equity types call it “creative destruction.”
Comment by Ricky T Friday, Jun 3, 16 @ 10:14 am
–A shutdown would play right into his hands.–
I’m not so sure. I think all politicians, including the governor, would take a royal beating on a shutdown.
And if some kid gets shot out on the street when he should have been in school, and you’re the one holding back the money to open them up…. spin yourself silly. But it won’t do any good.
Comment by wordslinger Friday, Jun 3, 16 @ 10:14 am
===A shutdown would play right into his hands.===
I’ve run out of words to describe the intentional destruction Rauner has done to Illinois.
He’s doing all this damage for what? To end collective bargaining as we know it, to lower the incomes of Illinois families, to limit the rights of injured workers and consumers.
This is class warfare, and the plutocrats are winning.
Comment by 47th Ward Friday, Jun 3, 16 @ 10:17 am
–This boil that is CPS has been festering and coming to a head for years. It needs to lanced and totally disinfected. Many will try and blame Rauner, maybe even say he “owns it.” That is short-sighted and incorrect.–
I’m confused — does he own the boil or the disinfectant?
I’ll stipulate that Rauner is not responsible for what happened before he was in office, if you’ll stipulate that he is now the governor and has the responsibilities to deal with them.
And he is also accountable for the horrible problems he is creating all on his own.
Comment by wordslinger Friday, Jun 3, 16 @ 10:22 am
I do believe that this has been the gov’s plan all along -
use the Chicago pension payment as leverage to bust the whole union/labor/collective bargaining thing wide open
it’s been like waiting for the other shoe to drop. Surprised it took this long.
Do you really think the mayor cares about Chicago teachers or retirees?
What do Rahm and Rauner have in common?
Hatred for Karen Lewis.
Comment by TinbyDancer(FKA Sue) Friday, Jun 3, 16 @ 10:30 am
The wanton destruction of the State of Illinois by Mr 1% who campaigned on *Quinn bad*; featuring a starring role by Mrs. 1%.
He represents everything that is wrong with the Republican party. No different than its presumptive Presidential nominee.
Comment by John Reynolds Friday, Jun 3, 16 @ 10:32 am
The CPS crisis has been assisted by CPS being the only school district in the State responsible for paying the employer’s pension contribution for its teachers.
Comment by anon Friday, Jun 3, 16 @ 10:33 am
=This boil that is CPS has been festering and coming to a head for years. It needs to lanced and totally disinfected. Many will try and blame Rauner, maybe even say he “owns it.” That is short-sighted and incorrect.=
Let’s remember this boil was created by hundreds of millions in state budget cuts to CPS and hundreds of millions in new pension obligations imposed by Springfield that no other school district in the state must pay.
Rauner didn’t cause the problem but he’s defending the two-tiered education funding system that brought us here, and falsely arguing (for raw political purposes) that Chicago gets more, when in fact it gets less.
Comment by Northeasterner Friday, Jun 3, 16 @ 10:34 am
CPS and their respective Union care nothing for the education of the children - it is all about the money and the greed . Rauner is cure for what ails CPS. More like this please.
Comment by DunkinDoNUTS Friday, Jun 3, 16 @ 10:34 am
==The CPS crisis has been assisted by CPS being the only school district in the State responsible for paying the employer’s pension contribution for its teachers.==
Except that they don’t pay the entire contribution and 2/3 of the districts in the state pay at least part. Many districts do pay all, but Chicago isn’t one. Otherwise, this is an excellent point.
Comment by Carhartt Representative Friday, Jun 3, 16 @ 10:36 am
Bankruptcy is the only option that makes any sort of sense. Not enough revenue to cover liabilities. Business class 101
Comment by Anonymous Friday, Jun 3, 16 @ 10:36 am
==CPS and their respective Union care nothing for the education of the children - it is all about the money and the greed . Rauner is cure for what ails CPS. More like this please.==
Yes, why else go into teaching if not for the big bucks?
Comment by Carhartt Representative Friday, Jun 3, 16 @ 10:38 am
Carhartt Representative, you are 100% incorrect. But nice try.
Comment by From the 'Dale to HP Friday, Jun 3, 16 @ 10:39 am
“CPS and their respective Union care nothing for the education of the children - it is all about the money and the greed . Rauner is cure for what ails CPS. More like this please.”
Take this ignorance to a Trump rally. It just clutters up the bandwidth here.
Comment by Northsider Friday, Jun 3, 16 @ 10:41 am
Chicago Teachers Pension Fund was nearly 100% funded as recently as 2003 - it didn’t fail - it was murdered.
http://www.ctpf.org/general_info/advocacy.htm
Comment by TinyDancer(FKA Sue) Friday, Jun 3, 16 @ 10:41 am
“Bankruptcy is the only option that makes any sort of sense. Not enough revenue to cover liabilities. Business class 101″
The only option?
One could raise revenue. (Next time, stick around for the second day of class.)
– MrJM
Comment by @MisterJayEm Friday, Jun 3, 16 @ 10:42 am
@Dunkin - If everyone in CPS and the CTU cares nothing about kids, why did Rauner lie about his residence and use his political clout to get his unqualified daughter into a CPS union-taught high school?
And LOL about Rauner being a cure for greed. That’s a good one.
Comment by hisgirlfriday Friday, Jun 3, 16 @ 10:44 am
Sorry - this link should be more specific - history of CTPF funding:
http://ctpf.org/general_info/advocacy/mistakesofpast.pdf
Comment by TinyDancer(FKA Sue) Friday, Jun 3, 16 @ 10:45 am
Those back payments into the retirement fund really sting when you’ve neglected and shorted them for years. Can we get away with that in our own personal lives—credit cards, mortgage payments–and be forgiven?
Comment by AnonymousOne Friday, Jun 3, 16 @ 10:45 am
I am not convinced of a CPS “crisis.” just read CPS is planning on opening a new school downtown and expanding schools in Lincoln Park and on the sw side. What about those +50 empty schools which continue to run a electric and heating? If there where a true crisis CPS and Rahm woud eliminate tifs, freeze capital expansions cutoff the duplicative top heavy charter schools and eviscerate central office largess including the useless CPS board staff. Instead they want to continue with business as usual and ask for a massive tax increase from the taxpayer. CPS needs drastic drastic change, Rauner is right to stand his ground.
Comment by atsuishin Friday, Jun 3, 16 @ 10:46 am
https://www.youtube.com/watch?v=_kM7NvQTUDU
Comment by Soccermom Friday, Jun 3, 16 @ 10:46 am
MrJM, that was hilarious.
Comment by Soccermom Friday, Jun 3, 16 @ 10:48 am
=Chicago Teachers Pension Fund was nearly 100% funded as recently as 2003 - it didn’t fail - it was murdered.=
CPS pension fund is better funded that the State pension fund–52% vs. 42%. Both got “murdered” by the Great Recession, declining returns, more retirees and fewer workers paying in.
Comment by Northeasterner Friday, Jun 3, 16 @ 10:49 am
What is Rauner’s #1 issue with Chicago Public Schools?
Is it all about his dislike of their Teachers’ Union or is there more to the story?
Comment by Mama Friday, Jun 3, 16 @ 10:51 am
=Bankruptcy is the only option that makes any sort of sense. Not enough revenue to cover liabilities. Business class 101
=
Right, so then the governor should sign a bill restoring the dedicated property tax.
Comment by TinbyDancer(FKA Sue) Friday, Jun 3, 16 @ 10:53 am
“And that’s probably just the position where the governor wants CPS.”
It is sick when Governor Rauner wants the largest school district in IL to fail!
Comment by Mama Friday, Jun 3, 16 @ 10:55 am
=Carhartt Representative, you are 100% incorrect. But nice try.=
Good resource.I am very much philosophically 180 degrees from the IPI, but here’s their report https://www.illinoispolicy.org/understanding_teacher_pension_pick_ups/
Comment by Carhartt Representative Friday, Jun 3, 16 @ 10:58 am
@Carthartt Rep
=Yes, why else go into teaching if not for the big bucks?=
Ask anyone teaching in a private school in Illinois where you’re paid the market rate for teachers, about 60% of what the average is for public teachers in Illinois, and you don’t have the gold plated, highly taxpayer subsidized retirement programs they receive.
You do it because you love teaching and the kids, and you understand how vital quality education is to the community, the state and the nation.
Been there, done that for three years and despite taking a $70K per year pay cut to do it, I wouldn’t have traded the experience and what the kids taught me for that kind of money.
I know your comment was snark, but it still deserved a serious response.
Comment by Illinois Bob Friday, Jun 3, 16 @ 11:00 am
=CPS pension fund is better funded that the State pension fund–52% vs. 42%. Both got “murdered” by the Great Recession, declining returns, more retirees and fewer workers paying in.=
Fund would have been healthy enough to withstand stress of recession if they hadn’t murdered it:
Great recession in 2008 - pension-shorting began in 1995 - that’s thirteen years of underfunding with predictable results.
Comment by TinyDancer(FKA Sue) Friday, Jun 3, 16 @ 11:01 am
Even without a State budget CPS may not have the legal right to fully shut down, particularly because it is arguing it will not be able to make payroll.
As long as ISBE transfers federal funds to CPS, regardless of General State Aid, or State Special Education funds, CPS will have some legal responsibility to educate its students with disabilities. It is possible CPS and ISBE could be faced with litigation in that situation from advocacy organizations for students with disabilities. A federal judge could rule CPS must provide education services for students with disabilities regardless of a shut down. It would be similar to the current court orders that are in effect for various human services and health care services covering the FY 16 budget.
Comment by Rod Friday, Jun 3, 16 @ 11:03 am
@Carhartt Rep said: “Except that they don’t pay the entire contribution and 2/3 of the districts in the state pay at least part. Many districts do pay all, but Chicago isn’t one.”
Please explain this statement. Unless I’m missing something, I think you are completely wrong.
Comment by Ricky T Friday, Jun 3, 16 @ 11:07 am
Today, Mr. OodaLoop is dividing the North (CPS) from the South (downstate).
On July 1, the day CPS has $24m in the bank, Mr. OodaLoop will be declaring that we must do something to save these poor disadvantaged students.
As stated elsewhere in the news today, we need Governor Rauner to state coherent policies and lead in that direction.
This OodaLoop Circus Ride is getting tiresome.
Comment by cdog Friday, Jun 3, 16 @ 11:08 am
I agree that the closure of CPS won’t concern the governor one bit. The lack of k-12 funding will become a big issue for him, though, once schools start shutting down in Republican districts. That is when he will start feeling the heat from his own side.
Comment by Pelonski Friday, Jun 3, 16 @ 11:10 am
Illinois Bob
Perhaps they should work for free for all the warm fuzzies. Why should teachers worry about providing for their OWN children? Can’t they all just live on those good feelings? If it was so great, despite the $70k pay cut, why did you leave? To provide for your family, perhaps?
Comment by AnonymousOne Friday, Jun 3, 16 @ 11:19 am
That cut from the Sun-Times really lays out the reality of the situation: CPS’s financial crisis is really a pension funding crisis.
Both the General Assembly and the Chicago Board of Education have created it. The GA eliminated Chicago’s pension property tax levy in 1995 and has repeatedly failed to live up to an agreement made that year to annually appropriate 30 percent of CPS normal employer costs. The GA has also given CPS numerous pension holidays. The Chicago Board of Ed, under Daley, ignored the mounting pension crisis for years and failed to make payments even during times when it was flush with property tax revenue in the late 90’s and early 2000’s.
Comment by Tom S Friday, Jun 3, 16 @ 11:20 am
Illinois Bob -I really don’t think it was. Here’s a question though. My mom was a public school teacher until she had kids. She came back to teaching at Catholic school after her kids were gone. Did she suddenly lose those greedy impulses?
Ricky T - CPS doesn’t pay the entire employee share. They pay 7%.
Comment by Cathartt Representative Friday, Jun 3, 16 @ 11:25 am
=CPS’s financial crisis is really a pension funding crisis.=
No, it’s a school funding crisis. If the schools had proper funding, they wouldn’t have to keep borrowing money from the pension fund. Borrowing money from the pension fund to fund the schools is what caused the crisis - just like the state borrowed from TRS to fund the underfunded state.
Comment by TinyDancer(FKA Sue) Friday, Jun 3, 16 @ 11:33 am
Cathartt Representative, ah I see what you mean now. You’re only talking the pick up, not the entire pension payment. The employee pick up is about $150m; CPS then has to make another $700m payment on top of that iirc.
Unlike every other district, CPS does have to play the employer portion.
Comment by From the 'Dale to HP Friday, Jun 3, 16 @ 11:50 am
=Fund would have been healthy enough to withstand stress of recession if they hadn’t murdered it:
Great recession in 2008 - pension-shorting began in 1995 - that’s thirteen years of underfunding with predictable results.=
According to Aon actuarial report, $200 million of the $700 million in current payments by CPS to pension fund is the result of the years of skipped payments (authorized by the General Assembly rather than comply with their own 1995 statutory pledge to pay CPS pensions). A significant contributing factor, yes, but not the biggest.
Comment by Northeasterner Friday, Jun 3, 16 @ 12:03 pm
=Unlike every other district, CPS does have to play the employer portion.=
Ah, I see what you’re talking about now. Sorry for the confusion. I meant that other districts have to pay part or all of the employee part–not the TRS CTPF boondoggle that does hurt CPS.
Comment by Carhartt Representative Friday, Jun 3, 16 @ 12:15 pm
I see no leverage for the Governor in forcing CPS into a cash crisis or near shutdown. I agree he appears to want to do this.
But there is no leverage there. Reality ultimately strips away all spin and the reality is that Illinois needs a healthy CPS.
Comment by peon Friday, Jun 3, 16 @ 12:33 pm
CPS needs municipal bankruptcy. It’s the only real solution.
Comment by Tone Friday, Jun 3, 16 @ 1:27 pm
Tone -
think hard and I bet you can come up with a better solution to CPS’s financial problems… That is if that is what your post means. If you mean Municipal bankruptcy is the only real solution to breaking a Union… You’ve got me there. So tell me please what you meant. Thank you.
Comment by Triple fat Friday, Jun 3, 16 @ 2:07 pm
Forgive me for sounding like a broken record here, but CTPF, and perhaps by extension CPS, should have used the State contributions sent to CTPF starting in FY 1996 for the intended purpose, pensions, instead of playing a little flim-flam and spending the money on retiree healthcare subsidies.
I’m not for a dime for CTPF until they acknowledge this error and promise it will stop.
Comment by Arthur Andersen Friday, Jun 3, 16 @ 2:17 pm
==better solution to CPS’s financial problems==
Bankruptcy and deep cuts will be the best solution for the chicago taxpayer. It will allow cps to get out from under its massive pension debt, and transform from a bloated job corps into a school district.
Comment by atsuishin Friday, Jun 3, 16 @ 3:18 pm
Illinois’ leaders for the past five decades have evidenced about as budgetary acumen as the apocryphal guy who asks how he can be overdrawn if he still has checks in the checkbook. Declining revenues plus increasing expenses plus shorting pension contributions: what could possibly go wrong? Making room in the prisons for all of the criminally negligent contributors to the current state of affairs would require paroling everyone but the multiple murderers.
Are there really no grownups in the Capitol willing to tell taxpayers that they’ve gotten a reduced-price for half a century, so now they’re going to have to expect less and pay more? Never mind, questions I know the answers to I don’t need to ask, right?
Comment by CEA Friday, Jun 3, 16 @ 4:18 pm