* CBS 2…
Rauner invited members of the media to Springfield for one-on-one interviews. He wanted to talk about, among other things, the enormous challenge facing Chicago’s budget and what happens if the city’s pension liabilities become too much to bear. […]
CBS 2’s Rob Johnson pressed Rauner on whether bankruptcy is a viable option, if public pension costs cannot be tamed through legislation. Rauner’s proposals include making the option legal for Illinois communities.
“Many other states have allowed local governments to decide whether they need to declare bankruptcy,” Rauner tells Johnson. “Bankruptcy law exists for a reason. It’s allowed in business so that businesses can get back on their feet and prosper again by restructuring their debts.” […]
Mayor Rahm Emanuel’s office issued a statement that said balancing the state budget on the backs of the local governments is itself a “bankrupt” idea. Rauner has proposed sweeping cuts in state assistance that have angered local officials.
* And he drove that point home again yesterday when talking about the Chicago Public Schools…
“The state has a crisis, the city has a crisis. I’m concerned that [CPS] is going to have to go bankrupt,” he said during a moderated discussion at a Chicago Public Education Fund luncheon. “Bankruptcy code exists to help the organization get out of financial trouble. There’s a reason for the bankruptcy code.”
Then he told the sympathetic audience – which minutes later gave him a standing ovation – that unions are partly to blame for why municipalities and school districts in Illinois can’t file for bankruptcy in order to renegotiate debt.
“Insiders in our system currently have made bankruptcy in government units illegal because some people never want to restructure contracts – contracts brought into place through insider deals,” said Rauner, who also advocated for right-to-work zones.
“The municipal bankruptcy bill is not currently moving in Springfield,” [Mayoral spokeswoman Libby Langsdorf ] said. “The governor’s suggestion is not part of our plan. Instead of proposing to solve the state’s fiscal crisis on the back of local governments, he should be working to ensure that Chicago, the biggest economic driver in the state, gets back on sound footing.” […]
Chicago Board of Education member Carlos Azcoitia said the district meanwhile is “taking measures to be able to prevent [bankruptcy] and be able to get our house in order,” adding that the district and Rauner agree that pensions should be reformed. “But I don’t see bankruptcy as any solution, and it’s not going to happen,” Azcoitia said.
Afterward by telephone, Chicago Teachers Union President Karen Lewis denounced Rauner’s bankruptcy suggestion, saying “to throw the entire system into chaos, financial chaos is irresponsible.”
Calling the governor “basically a robber baron,” engaged in “union busting,” Lewis wondered “how much respect does Bruce Rauner have for people who walk away from their debts, for regular, ordinary people who walk away from their debts?”
“I’m sure he has special names for them: deadbeats.”