96 Comments - sss - Thursday, Apr 16, 15 @ 10:17 am: A whole lot of “they” for a Chicago resident. - Fiscal Con - Thursday, Apr 16, 15 @ 10:17 am: When the G’s start droppin’, look out. - VanillaMan - Thursday, Apr 16, 15 @ 10:18 am: We have a governor advocating that governments declare bankruptcy. Talk about shunning responsibilities, accountability and shunning leadership in government. Bankruptcy should not be advocated or seen as any type of government solution, especially by a government leader. It would be similar to having a military leader advocating surrender. - NovMan - Thursday, Apr 16, 15 @ 10:21 am: This strategy is what made him a billionaire. - Anon - Thursday, Apr 16, 15 @ 10:22 am: “Ain’t” followed by a dropped g. Nice. - Rusty618 - Thursday, Apr 16, 15 @ 10:22 am: Maybe homeowners in Chicago need to start paying property taxes (currently based on 1/6 of the assessed value) like homeowners in the rest of the state (currently based on 1/3 of the assessed value). That would be a start! - Em - Thursday, Apr 16, 15 @ 10:22 am: I’m so sick of Rauner. Bankruptcy is not a smart solution to the CPS problem. The fact that a Governor would advocate for that as a solution is mind-blowing. - Crispy - Thursday, Apr 16, 15 @ 10:22 am: sss — Yeah, it’s like he doesn’t even think Chicago is part of Illinois. Fiscal Con — I know. I had to read the story to confirm that it’s a direct quote. The guy’s from Winnetka, for cryin’ out loud! - old-pol - Thursday, Apr 16, 15 @ 10:23 am: Rahm- you mean the dual taxation system that Daley accepted as part of the deal to control Chicago Schools? Are you suggesting eliminating the dual tax as part of a new arrangement concerning the Mayor’s control over the Chicago school board? - Juvenal - Thursday, Apr 16, 15 @ 10:23 am: === “But there are things we can do to help them restructure and get their government and their schools turned around, and I’d like to help them.” === Like end the practice of Chicagoans paying the pensions of downstate teachers, and using that money to pay their own teachers’ pensions instead? I think we have found the basis for an agreement. - Anonymous - Thursday, Apr 16, 15 @ 10:24 am: So Rauner has assembled a high paid team of “superstars”, and the big brains have come up with bankruptcy as the best option. Sheesh. I have an aunt that’s probably never made more than $10 an hour that could have came to that conclusion. She’s done it twice. Pathetic. - Crispy - Thursday, Apr 16, 15 @ 10:26 am: Is one of Rauner’s ideas to push for an “Emergency Manager” law, such as was instituted in Michigan after the 2008 down-turn? If so, that would seem to dovetail with the bankruptcy talk. - Shemp - Thursday, Apr 16, 15 @ 10:26 am: Well, given that Chicago and Illinois can’t print money, it’s hard to imagine alternatives beyond either a massive property tax increase in Chicago, austerity measures or bankruptcy. This problem was created over years, er, decades and blaming a new governor for addressing it is akin, to well, “watching an arsonist criticize the fireman for the manner in which he put out the arsonist’s fire.” - Ray del Camino - Thursday, Apr 16, 15 @ 10:27 am: I think there must have been a class at Dartmouth: “Communications 201: How to speak like the little people.” - Juice - Thursday, Apr 16, 15 @ 10:27 am: Maybe someone with a little more expertise on this matter can enlighten us, but it was my understanding that an entity looking to declare bankruptcy typically has to go through a wide range of cost cutting measures before a court will allow you to restructure your obligations. So, in the case of CPS, wouldn’t that mean laying off thousands of teachers and increasing the number of kids per classroom, eliminating after school programs so kids can just go hang out on the street, and probably canceling contracts with the Governor’s precious charter schools? I really hate making “think of the children” type arguments, but is he really suggesting that the 400,000 students of CPS are going to have to go through years of suffering simply because he hates Karen Lewis that much? - Anonin' - Thursday, Apr 16, 15 @ 10:29 am: Hey how about an end to the free lunch school pension system so Chicagoans don’t shell good money for pensions in the ‘burbs and downstate? The “bankruptcy” was what the GOPies and Edgar were hoping for under Daley. He fooled them by putting Vallas in charge and getting the teachers to get themselves under control. Can’t wait for all the Oakland ideas to be tried. That might make Scabistan and West Indiana look good. - Crispy - Thursday, Apr 16, 15 @ 10:32 am: Ray del C: Hilarious! Prerequisite: “How to ’share sacrifice.’” - Crispy - Thursday, Apr 16, 15 @ 10:35 am: Juice, what’s wrong with “think of the children” arguments? Seems like more people ought to be making those. … - Arsenal - Thursday, Apr 16, 15 @ 10:43 am: “watching an arsonist criticize the fireman for the manner in which he put out the arsonist’s fire.” This line doesn’t get any less dumb with repetition. That there is a problem doesn’t render the governor immune from all criticism for his response to that problem. Some of his actions may not fix the problem. Some of his actions may make it worse. It does the state no good- in fact, it actively does it ill- to not say so just because you can’t tell criticism apart from arson. - nona - Thursday, Apr 16, 15 @ 10:43 am: The CPS pension fund was in good shape when Daley took over. He asked for and received a long-term pension holiday. As a result, the fund’s solvency has dropped precipitously. Daley’s not around anymore, but some of the legislative leaders who approved the pension holiday still are. So the state helped to create the CPS pension crisis, and now wants to tell the city to go bankrupt. If bankruptcy does become reality, however, then some state management would seem appropriate, given that local control hasn’t worked so well. - Belle - Thursday, Apr 16, 15 @ 10:45 am: He is obviously trying to remind the rest of IL why they don’t like that big, expensive, nasty, dangerous, filled-with-minorities-City in the north. That City where he bought a condo so his daughter could attend one of the schools with the over-compensated teachers. That city that brings in the tourists, jobs, sales taxes, and manages the airport and stunning Lakefront..yeah…that one. - Formerly Known As... - Thursday, Apr 16, 15 @ 10:45 am: This is the same CPS currently operating a 12 month budget based on 14 months of revenue? The one that “balanced” their budget on paper by “taking” 2 months of revenue from next year? Genius. - Carhartt Representative - Thursday, Apr 16, 15 @ 10:47 am: Don’t forget, Rauner sent his own daughter to a CPS school. She may not have been entitled to, but he did. - Anon. - Thursday, Apr 16, 15 @ 10:47 am: ==I think there must have been a class at Dartmouth: “Communications 201: How to speak like the little people.”== Be grateful we’re not in the south. Can you imagine him trying to pronounce “y’all” properly? Ain’t happenin’. - AnonymousOne - Thursday, Apr 16, 15 @ 10:53 am: Heck, just close down all the schools. Save tons of cash. Home school since teaching is so easy. Snark. - Suburbanon - Thursday, Apr 16, 15 @ 10:56 am: Rusty618 - You’ve got the Cook County property tax inequities wrong. Although Cook County residential assessments are based on 10% of market value, not 33% as in rest of state, the equalizer jacks the “equalized” assessment back up to 25%-30% range, closer to statewide rate. It is the businesses who get screwed with equalized tax assessments far higher than 33%. - Just Observing - Thursday, Apr 16, 15 @ 11:00 am: === Maybe homeowners in Chicago need to start paying property taxes (currently based on 1/6 of the assessed value) like homeowners in the rest of the state (currently based on 1/3 of the assessed value). That would be a start! === 1. The levels of assessment you speak of are Cook County-wide, not just Chicago. 2. Assessment levels simply represent the proportion of total taxes owed. Doubling, tripling, quadrupling, etc. the assessment levels does not mean governments get more money. Governments declare how much they need and then the the County Clerk determines how much everyone pays. You have it reversed. 3. That said, the levels of assessment in Cook County merit review. - Anonin' - Thursday, Apr 16, 15 @ 11:02 am: Speaking of Rauner and money anyone else notice the New Yorker managin’ the “blind trust” got tossed from Chase over Enron loans WOnder if BVR will ever tell us what they are buyin’ and sellin’ now. Guessin’ he is shortin’ various IL entities who get sacked with the spendin’ cuts. - Wordslinger - Thursday, Apr 16, 15 @ 11:03 am: Rauner isn’t “concerned” that CPS will declare bankruptcy, he wants to force it and other munis to declare bankruptcy as a means to break contracts and shed pension liabilities. It’s all in plain sight. That’s why he wants to grab back half of the munis share of the income tax, that’s why he’s pushing a muni bankruptcy bill. Adding the risk factor of possible bankruptcy would cost all taxpayers money in the muni markets. Rauner never claimed to build any successful businesses in the private sector, but he built quite a record of milking them dry and driving them into bankruptcy. That’s what passes for a “conservative business leader” in some circles these days. - Cheryl44 - Thursday, Apr 16, 15 @ 11:03 am: Another option would be for Bruce to write a big fat check in gratitude for the education his daughter received from the CPS. - zatoichi - Thursday, Apr 16, 15 @ 11:06 am: It is easy to throw ideas like bankruptcy out as an option for CPS, but what happens to all those companies and people who have provided services and supplies to CPS in good faith? Tough luck and too bad for them? How a Governor would even be bringing up this option is unbelievable. Let’s run government as a business. The little guys don’t matter as long as the big picture works out. CPS is just a large business like a nursing home chain. It’s just business. Nothing personal. - One to the Dome - Thursday, Apr 16, 15 @ 11:11 am: Crisis creates leverage… - Downstate - Thursday, Apr 16, 15 @ 11:12 am: Bankruptcy has gotten turned on it’s head in the last few years. The GM and Chrysler Bankruptcies, which pushed bond holders to the back of the line, in favor of unions, was a complete rewrite of existing bankruptcy law. There is no longer a guarantee as to how a bankruptcy might go down. As a result, EVERY stakeholder has a right to be worried. - Anonymous - Thursday, Apr 16, 15 @ 11:18 am: Amazing. Even if you disagree with the proposals people still are delusional that somehow this mess will work itself out. Rauner is right: The damage can’t be fixed without major cuts and a massive infusion of new taxes. But boy, is the city clean!!! - Frenchie Mendoza - Thursday, Apr 16, 15 @ 11:19 am: If Rauner had advocated bankruptcy as a solution during the campaign he would have lost. Period. This is his big idea? This is what we’ve been waiting over a year to hear? These are what his over-paid advisors are advising? “Bankruptcy.” - Juice - Thursday, Apr 16, 15 @ 11:21 am: Anonymous, how exactly is Rauner right? He has not come up with a proposal for major cuts or for a massive infusion of taxes. He walked into his office, looked up at Indy, and declared for all of the people to hear, “I think we should take a mulligan!” Leadership and superstars at their finest. - Wordslinger - Thursday, Apr 16, 15 @ 11:34 am: FM, good points. The “comprehensive, detailed plan” we’ve been waiting on was bankruptcy. If Rauner had whispered “bankruptcy” during the campaign, he would have lost in a landslide. - Anonymous - Thursday, Apr 16, 15 @ 11:36 am: - major cuts and a massive infusion of new taxes - That’s not what Rauner is proposing, moron. He’s proposing bankruptcy, which is just walking away from your obligations. - Angry Chicagoan - Thursday, Apr 16, 15 @ 11:37 am: Disaster capitalism. It’s the only capitalism Bruce Rauner knows. And that’s front and center of his agenda. - Grandson of Man - Thursday, Apr 16, 15 @ 11:39 am: Good one, Juvenal. Kudos to Emanuel also for this and his stance against right to work zones. I support a gradual cost shift away from Chicago taxpayers. I’m hearing that Rauner has a CPS bankruptcy proposal: sell the assets to a group of wealthy investors and bundle up the liabilities into an “office equipment package” for sale to graphic designers. - ChiTownSeven - Thursday, Apr 16, 15 @ 11:40 am: The ability to declare bankruptcy for CPS and maybe Chicago itself is the ace in the hole that Rahm wants Rauner to give him. With that leverage in place, Rahm can extort a whole lot of wage, condition, and pension concessions from public employees and public retirees. Why Chuy never took a position AGAINST municipal bankruptcy is a mystery to many. - Rod - Thursday, Apr 16, 15 @ 11:41 am: I want to comment on the other aspect of Rich’s post and links. That is the idea that there will be no bail out authorized by team Rauner for CPS. Yesterday, ISBE along with removing Dr. Koch also approved transferring about $33 million to CPS out of the $97 million school bail out fund created by the legislation that cut $1.6 billion from the remaining FY 15 budget. That is about 34% of the bail out pot (ISBE calls it the Partial Hold Harmless Eligibility fund), which is more than the total student weight of CPS in the state. The student weight of CPS is about 19.3% of all students in the state. But given how ISBE set up its formula for districts CPS which had under 30 days cash on hand would not have been able to make payroll for May without this funding or more extensive short term borrowing. Easily ISBE could have given CPS 20% of the pot or about $19 million and distributed the other $78 million to school districts around the state that are equally broke. But the consequences of CPS possibly not making payroll in May were too big for the state as a whole, so effectively the first CPS bail out of the Rauner administration has just happened. I have to say to some of my fellow bloggers who predicted that CPS would get a high percentage of the 97 million fund beyond what could be considered to be fair that they were right. I incorrectly assumed ISBE would have the pain shared equally and I was wrong. I would also suggest that the Governor was aware of the CPS cash on hand figures when he made his bankruptcy statement. I don’t support the bankruptcy proposal just for the record, but the fiscal situation of CPS is not good even just based on cash flow and credit ratings let alone with longer term obligations to the pension fund. - Cassandra - Thursday, Apr 16, 15 @ 11:52 am: Shouldn’t we hear from Mayor Rahm on the bankruptcy issue. I know he said no way, but how about some more detail on Chicago’s contribution to solving this problem. Details over and above Chicagoans’ famously low property taxes stay low while I, outside Chicago, pay higher income taxes to help them out. - OneMan - Thursday, Apr 16, 15 @ 12:00 pm: Fix a lot of the CPS issues if they paid the same school property tax rate I did… - Carl Nyberg - Thursday, Apr 16, 15 @ 12:06 pm: How can CPS be in so much trouble? Rahm Emanuel is doing an OK job, right? - DuPage - Thursday, Apr 16, 15 @ 12:13 pm: The suburban voters have had many referendums over the years to raise taxes for school districts. Rahm needs to have the people in Chicago vote on a referendum to raise their school tax. - Judgment Day - Thursday, Apr 16, 15 @ 12:18 pm: “Bankruptcy has gotten turned on it’s head in the last few years. The GM and Chrysler Bankruptcies, which pushed bond holders to the back of the line, in favor of unions, was a complete rewrite of existing bankruptcy law. There is no longer a guarantee as to how a bankruptcy might go down. As a result, EVERY stakeholder has a right to be worried.” —————— That is exactly correct. Nobody really knows how municipal bankruptcies are going to go down, because there are so few of them (to date). But, there are some ‘tendencies’ occurring, and three of them are very interesting: 1) Retirement benefit haircuts. Yes, they are happening. But the cutbacks initially proposed in the reorganization plans are being substantially softened from the original proposals. 2) Bonded indebtedness. Now this is interesting, in that the initial reorganization plans tend to start off treating the bonded indebtedness lighter, but as time goes on, the bonded indebtedness tends to get treated much more harshly - MAJOR haircuts. In fact, that’s where much of the litigation is coming from. 3) Operations. This is really where the squabbling is occurring. It’s all about how work gets done, should a unit of government be doing some things, etc, etc. That’s where the winners and losers are getting sorted out. All the finances and payments need to be presented to the courts before they can be paid. That makes a lot of the current TPTB (The Powers That Be) very uneasy. There could be some ’strange bedfellows’ here - you could see the CTU, CPS management, and the holders/issuers of the CPS bonded indebtedness all on the same side - vehemently opposed to anything like bankruptcy for CPS. The only winners could be the taxpayers. Kind of makes one wonder….. Btw, if bankruptcy is so bad, and CPS has been doing such a great job, please explain how having to potentially make as much as $660 million in termination payments for bond ’swaps’ (which are ‘out of the money’) works out “for the children”. Here’s the link: https://medium.com/@munilass/how-chicago-has-used-financial-engineering-to-paper-over-its-massive-budget-gap-872d911dd363 - Nebraska Bill - Thursday, Apr 16, 15 @ 12:20 pm: All this debate in the media will have a very negative impact on property values in Chicago. Rahm really needs to get together a detailed and realistic plan for paying for CPS debts and avoiding insolvency and bankruptcy or he may end up launching a wave of panic selling from parents that don’t like the open discussion of a CPS bankruptcy and who were already contemplating a move to the suburbs for more stability in their children’s education. If Rahm does not clearly and decisively address the reasons why CPS isn’t insolvent, the safe play for many will be to make a move to the suburbs. - GraduatedCollegeStudent - Thursday, Apr 16, 15 @ 12:31 pm: A Rauner never pays his debts. - better days - Thursday, Apr 16, 15 @ 12:31 pm: God Bless Gov Rauner as he stops the Illinois Democrat / union money laundering machine Illinois Giving CPS more money, is giving it all to Chicago teacher unions Let CPS go bankrupt as they truly are….. no matter how much money is tossed at the CPS cesspool - better days - Thursday, Apr 16, 15 @ 12:33 pm: Chicago ,CPS are bankrupt… as bonding rating falls to junk the lowest in America - Oswego Willy - Thursday, Apr 16, 15 @ 12:35 pm: - Nebraska Bill -… ===- Nebraska Bill - Wednesday, Apr 15, 15 @ 10:56 am One thing to consider. If it’s eventually going to go belly up because we truly have kicked the can too many times to ever catch up on our debt, why deliver painful tax hikes for 3 or 4 years only to get voted out of office by a public willing to use BK as a solution? Quinn tried this and his legacy of making the proper pension payments may have cost him the election and get undone this year or next year by Rauner who is offering the voters pain free debt relief via BK.=== So, - Nebraska Bill -, what are you saying today? - better days - Thursday, Apr 16, 15 @ 12:42 pm: Chicago ,CPS bankrupt as $$ 1.7 Billon property tax dollars are diverted each YEAR to T.I.F funds Wake up Chicago .. The Chicago tax money is diverted to millionaire developers, democrats, cronies, big money donors LOL Chicago - forwhatitsworth - Thursday, Apr 16, 15 @ 12:44 pm: How low will our politicians, led by our governor, continue to stoop in advocating bankruptcy as the solution to weasel out of financial obligations? Shameful !! What is happening to the moral fiber that made our country so strong and different from others? - Nebraska Bill - Thursday, Apr 16, 15 @ 12:45 pm: OW - “what are you saying today?” I think that the time for posturing is over. The Governor is forcing a debate on whether CPS is truly insolvent or not. Given the last CPS budget - that was balanced by tapping future revenues - and the size of retirement benefit debt, the Governor may be correct if everything else stays the same. We all know that we can alter “everything else” but until some details emerge, you are going to have some very nervous homeowners in Chicago - who Rahm just promised not to raise their property taxes (and then had a staffer say it wasn’t a promise). Right now the situation appears very chaotic and, like I said before, the safe play may be to just pack it in and head to the suburbs for more stability. - Oswego Willy - Thursday, Apr 16, 15 @ 12:49 pm: - Nebraska Bob -, So the CPS should file BK (lol) and as they do, everyone should move out of Chicago? Such courage! Rauner likes BK (lol) for the profits, not stability, you should remember that. - Nebraska Bill - Thursday, Apr 16, 15 @ 12:53 pm: OW - time to pull your head outta the sand - the world is not as black and white as you dream it to be. - Rusty618 - Thursday, Apr 16, 15 @ 12:54 pm: @Sububanon “Cook County residential assessments are based on 10% of market value, not 33% as in rest of state, the equalizer jacks the “equalized” assessment back up to 25%-30% range” Not so sure about that. I still pay twice as much in property taxes for a house in southern IL than my brother does for a condo on LDS. - Oswego Willy - Thursday, Apr 16, 15 @ 1:06 pm: ===OW - time to pull your head outta the sand - the world is not as black and white as you dream it to be.=== Yeah, here’s what I do know; BK (lol) by munis here in Illinois isn’t passing as Rauner wants it, and Pensions are protected by the Constitution. Pretty black and white. Good luck with your thoughts, since history and political standing aren’t making your pipe dream(s) possible. So everyone shoukd bail out of Chicago? BK (lol) by the wealthy means profits, in governments, it means instability, married with near impossible governing. But I’m known as a dreamer around here, not a pragmatist, so… - JS Mill - Thursday, Apr 16, 15 @ 1:14 pm: What is the impact on Illinois businesses if CPS is allowed to declare bankruptcy? I think the real idea is just to get out of paying the pension debt and lower the earnings of city/CPS employees. I doubt they will actually stiff any vendors. The money not paid into the pension funds (city or state) was spent somewhere else. Whether it be on salaries, services, infrastructure, or goods Illinois businesses and taxpayers (BTW- teachers and public employees are taxpayers too!) benefited either directly or indirectly from the expenditures. So everyone bears the responsibility of the debt. BTW- @Rod said it correctly- CPS gets a disproportionate share of state revenue that more than equalizes their so called double taxation (which is just taxation not double taxation, it would only be double if they were taxed for CPS pensions twice and even that is just taxation). In the end bankruptcy is a canard forced on us by a bunch of wealthy business people that 1) do not want to fund their proportional share of public education 2) don’t want to pay taxes 3) do not want to fund any other public obligations. They (Rauner) have co-opted a bunch of small town boobs to work on their behalf when they are actually betraying the financial interests of these smaller communities. - Rod - Thursday, Apr 16, 15 @ 1:16 pm: I think those who are clamoring for the property tax rate to go up on my 1888 Victorian home on Chicago’s north side have a point. But Bankruptcy will not cause any increase in my property tax rate, no court will order a rate increase as part of a Bankruptcy proceeding. Rather the solution to my lower property taxes and the long term implications for funding education in this city will have to be some type of oversight authority combined with legislation that removes the PTELL cap for CPS. The oversight authority blocks adoption of CPS budgets and forces CPS to raise property taxes beyond the cap to pay bills in order to have a real balanced budget. The citizens of Chicago will not support any of this by an overwhelming majority and it will have to be forced on us by the rest of the state. That would be very ugly indeed and no I am not selling my house in the City because in part I do not believe the Assembly would have the courage to force such a tax increase. Just for a comparison the builders of my home in 1890 built an identical home on the same size lot in Evanston that house is taxed $3,500 more than my home is currently with very similar upgrades in an equally nice area. - nona - Thursday, Apr 16, 15 @ 1:17 pm: Best comments of the day: == Rauner isn’t “concerned” that CPS will declare bankruptcy, he wants to force it and other munis to declare bankruptcy as a means to break contracts and shed pension liabilities.== (Wordsllinger nails it in one sentence.) == Fix a lot of the CPS issues if they paid the same school property tax rate I did… == (One Man says what many suburban homeowners may be thinking.) == The suburban voters have had many referendums over the years to raise taxes for school districts. Rahm needs to have a CPS referendum. == (Constructive suggestion from Rod. As I recall, the last Chicago school referendum was in the 1960s.) == so effectively, the first CPS bailout of the Rauner administration already happened. == (Rod makes a persuasive point.) It’s remarkable how in GOPspeak, the term “fiscal responsibility” has come to mean welshing on government debts. - Oswego Willy - Thursday, Apr 16, 15 @ 1:26 pm: - Nebraska Bill -, With no muni bankruptcy, and with Pensions protected as they are, and will more likely continue to be when the ILSC rules on Pensions again, how is my head in the sand, when I seem to be facing the realities? Your solution is to move out of Chicago? Then move. The problems stay. If your solutions aren’t realistic, what realistic solution will you finally suggest. To - nona -, You are correct, nice catch on - Wordslinger -. That’s what’s at play here. Again, Pensions, Unions, Liabilities…it “leveraging” that’s going on, not solving. - Last Bull Moose - Thursday, Apr 16, 15 @ 1:35 pm: Per the City of Chicago FYI 15 budget property taxes in Chicago for all taxing entities totalled $4.26 billion in 2013. Would a $2 billion increase for CPS and the City wreck the economy? There are 1 million housing units plus commercial and industrial property. Values would drop, but nothing real changes until people and business leave. Would the Governor support changes that would allow such an increase? That would not be a bailout, just lettin’ folks fix their own problems. - Anonymous - Thursday, Apr 16, 15 @ 1:59 pm: Rusty618 “I still pay twice as much in property taxes for a house in southern IL than my brother does for a condo on LDS.” That is probably the result of tax rates, not assessments. See Just Observing post at 11 AM - Anonymous - Thursday, Apr 16, 15 @ 2:02 pm: OW - so you’re okay with ILSC (lol) and but not BK (lol)??? You gotta get over it man! No, the solution is to do what’s best for you family. There is a debate on CPS insolvency with little details on the fix. My point is that if a family was already contemplating a move from the City to the suburbs (very normal when a couples starts having kids), the utter lack of detail on a fix and the Governor’s insolvency rhetoric may be the deciding factor in listing the house in the City for sale. - Nebraska Bill - Thursday, Apr 16, 15 @ 2:03 pm: That was me at 2:02… - Anonymous - Thursday, Apr 16, 15 @ 2:10 pm: If Chicago property taxes were not being diverted from the Chicago public schools to TIF’s the issue would not even be discussed. The abuse of TIFs has caused the CPS budget deficit only no politican wants to admit these slush funds do much more harm than good. - Midway Gardens - Thursday, Apr 16, 15 @ 2:11 pm: Rusty618, the assessed valuation is lower but then the state comes along with an equalization factor to get to all residential properties to 1/3 of market. - Oswego Willy - Thursday, Apr 16, 15 @ 2:15 pm: - Nebraska Bill -, If CPS being solvent or not is ahead of the schools your kids might attend, I really can’t help your… decision making. Good luck with all that. So you freely admit that muni bankruptcy isn’t going anywhere as written, and the pension solutions need to be constitutional, how about not starting my head is in the sand since you agree, and instead of seeing BK (lol) as a solution, recognize you already know it’s probably impossible as the bill is written. Thanks. - Wordslinger - Thursday, Apr 16, 15 @ 2:24 pm: NB, commercial and residential real estate in Chicago is red hot, a seller’s market. Ten years ago, Sears Tower was a white elephant. Now it’s going for $1.3 billion. JD, a federal judge would laugh himself silly if CPS filed bankruptcy with that property tax base and those property tax rates. And the city? Give me a break. Let’s see, I’ll take your airports, your water works, your park district…. It’s a rabid ideological pipe dream that has nothing to do with solving fiscal problems, but advancing a reactionary social agenda. - Nebraska Bill - Thursday, Apr 16, 15 @ 2:26 pm: OW - I think you’re missing the bigger picture. It’s irrelevant what the ILSC (lol) does on pensions and whether this year’s BK Bill does if the rhetoric and lack of detail cause a mass exodus to the suburbs. That’s the beginning of the Detroit death spiral that Emanuel warned Chicago voters would happen if Garcia was elected Mayor. - Nebraska Bill - Thursday, Apr 16, 15 @ 2:29 pm: WS - I agree but the Mayor needs to provide some calming details - just like you have done - ASAP to counter Rauner’s over the top rhetoric. - Oswego Willy - Thursday, Apr 16, 15 @ 2:33 pm: ===It’s irrelevant what the ILSC (lol) does on pensions and whether this year’s BK Bill does if the rhetoric and lack of detail cause a mass exodus to the suburbs.=== So, the constitutionality of solving the problems of pebsion reform are less important than people moving to the suburbs? I should be more concerned about John and Jane Smith and their kids Timmy and Susie moving to a suburb, than finding a constitutional solution to Illinois biggest economic, governmental problem? You are a dope. Also, anyone using BK (lol) and then claiming Chicago is the next Detroit really is clueless. Real estate is booming in Chicago. H - Nebraska Bill - Thursday, Apr 16, 15 @ 2:33 pm: Rahm’s solutions so far have been almost entirely based on state support. He needs to look in the mirror and talk local taxes, cuts and how that will impact education, public safety and parks. If he continues to play it cute and try to pin the blame on the state or rely too much on state solutions, Rauner will do his best (as he is now) to burst Rahm’s bubble on help from the state. - Demoralized - Thursday, Apr 16, 15 @ 2:34 pm: Of course the Governor would push bankruptcy as a solution. That would allow union contracts and pension obligations to be “restructured” thereby achieving the Governor’s goal of reducing wages and pension benefits. The Governor has a viewpoint that he religiously adheres to and that viewpoint involves lower wages and fewer benefits. This will help accomplish that. - Oswego Willy - Thursday, Apr 16, 15 @ 2:37 pm: Chicago is not Detroit. Period. Please learn. - Chris - Thursday, Apr 16, 15 @ 2:53 pm: “a federal judge would laugh himself silly if CPS filed bankruptcy with that property tax base and those property tax rates.” What’s the judge gonna do? Order the repeal of PTELL??? Order the City to dump all the TIFs??? Be serious Slinger, Bruce Black can laugh all he wants, but that (hypothetical) derision ain’t coming close to empowering him to re-write Illinois statutes. Or did I miss where the judge in the Orange County bankruptcy tossed it out because Prop 13 keeps tax rates too low…CPS’s effective tax rate is only low because (1) its levy is capped, and (2) the aggregate assessed value of Chicago property keeps going up. - Mason born - Thursday, Apr 16, 15 @ 2:54 pm: I have a question for all the smart folks on here. If the ISC rules that Pensions cannot be diminished as it appears they will. IF CPS goes to a bankruptcy court how does that play out? Pension holders take a haircut and it violates the State Constitution. If Pension Holders are protected you would have to take bigger haircuts from vendors, teachers, and bond holders. Or does Federal Law trump the State Constitution and everyone loses? I wonder if our Wundergov has asked for any kind of legal opinion. - Nebraska Bill - Thursday, Apr 16, 15 @ 2:54 pm: OW - Why do you insist on name calling when you are discussing an issue? I’ll leave it to others to judge who is the dope. - Rich Miller - Thursday, Apr 16, 15 @ 2:55 pm: ===ain’t coming close to empowering him to re-write Illinois statutes=== Um, perhaps you’re missing the entire reasoning behind bankruptcy. It’s all about nullifying state laws and existing contracts. - Buzzie - Thursday, Apr 16, 15 @ 3:00 pm: The fact is that the State Board of Education has the legal authority to take over a school district for financial and/or operational purposes. Among their authority is to replace the school district superintendent (replacement named by ISBE), remove any and all school board financial decision-making powers (authorization assigned to an ISBE selected panel) and that panel’s ability to increase the school district’s levy/tax rate to any amount without the need for a referendum. - Oswego Willy - Thursday, Apr 16, 15 @ 3:00 pm: - Nebraska Bill -, Chicago isn’t Detroit. Further, your logic to where you seem you understand what’s is going on here? Is lacking. Bankruptcy, today, is not an option. The Bill trying to get muni bankruptcy, as written now, won’t pass, and with the pending Supreme Court ruling solidifying the pension protection aspect of what Rauner would like nullified… …besides warning of the Smith’s moving outside Chicago and that idea Chicago is Detroit, what are you really saying? - Demoralized - Thursday, Apr 16, 15 @ 3:21 pm: OW At least we’ve moved from the Detroit AND Greece references. Now it’s only Detroit. You have to recognize progress, man. - Oswego Willy - Thursday, Apr 16, 15 @ 3:27 pm: - Demoralized -, Well, you got me there… my bad. - jimbo2 - Thursday, Apr 16, 15 @ 3:31 pm: Most “solutions” mentioned above do not address the need. TIF’s are a PART of the problem. The, relatively, low taxes I pay in Chicago are also a PART of the problem. The connected school board and the practices of some members, administrators and some charter schools are part of the problem. Past deals like the way Chicago pensions were shortchanged by Daley and and the state over the last 10 years (http://goo.gl/G7Q75V)are also part. I’m happy to see my Real Estate taxes raised (25% would be fine) If laws were passed to address all the other problems at the same time. Jim - Carhartt Representative - Thursday, Apr 16, 15 @ 3:41 pm: Most “solutions” mentioned above do not address the need. TIF’s are a PART of the problem. The, relatively, low taxes I pay in Chicago are also a PART of the problem. The connected school board and the practices of some members, administrators and some charter schools are part of the problem. Past deals like the way Chicago pensions were shortchanged by Daley and and the state over the last 10 years (http://goo.gl/G7Q75V)are also part. I’m happy to see my Real Estate taxes raised (25% would be fine) If laws were passed to address all the other problems at the same time. Jim= Agreed, but I’d add that this isn’t all Daley dealings. Rahm’s move to borrow money to pay for early childhood was fiscally irresponsible. - chi - Thursday, Apr 16, 15 @ 3:53 pm: =A Rauner never pays his debts.= And it’s GraduatedCollegeStudent for the win! Funniest comment here in months. And first GoT reference too. - Rod - Thursday, Apr 16, 15 @ 4:35 pm: There is no question that there are more problems at CPS than the low property tax rate Jim I agree with that. The TIF fund withdrawals from the CPS tax base are probably a smaller part of the problem than other factors. With the current Federal investigation of the CPS CEO Barbara Byrd-Bennett corruption has to be considered a factor too. Given the fact that the issues relating to Barbara Byrd-Bennett also involve the CPS Inspector General who investigated this issue and apparently could not resolve it for a long period of time it also could lead to problems with other high level CPS officials. There were big problems with the charter school operator UNO. Then there is the cash flow problem too. Mayor Emanuel now has a real hot potato on his hands. Let’s recall past CPS Board President Scott shot himself apparently over debt, and past CPS Board President Sharon Grant went to jail for tax evasion. CPS has been a problem for a long time and Jim is right about that. If my taxes go up I certainly don’t want some CPS bureaucrat giving out $20 million dollar no bid contracts and having the Board President defend it either. - Judgment Day - Thursday, Apr 16, 15 @ 5:34 pm: “If the ISC rules that Pensions cannot be diminished as it appears they will. IF CPS goes to a bankruptcy court how does that play out? Pension holders take a haircut and it violates the State Constitution. If Pension Holders are protected you would have to take bigger haircuts from vendors, teachers, and bond holders. Or does Federal Law trump the State Constitution and everyone loses?” ———— First off, without the enabling state legislation, no tax district (CPS/City of Chicago/Cook County) over a certain size (and it’s pretty small) can file for protection under the Federal Bankruptcy Code. So if the State does nothin g, well, nothin g happens. IIRC, there are some provisions for involuntary bankruptcy filings - but I seriously doubt they apply to local governments. Now, IF the bankruptcy enabling legislation came into law in IL, then the federal bankruptcy court (to date) has supremacy over state law. At least it has to date. Interestingly enough, the area being appealed is from (gasp!) Detroit, and it’s over some Pension bonds that were issued. And did those bondholders take a haircut. They lost some serious money as part of the reorganization plan approved by the court. Oh well. But there’s a hook here. The CPS has some serious issues with bonded indebtedness, and if they aren’t already, might be shortly in ‘technical default’ of some bond provisions. That’s when life gets to be fun. (/sarcasm off) - Judgment Day - Thursday, Apr 16, 15 @ 5:51 pm: “JD, a federal judge would laugh himself silly if CPS filed bankruptcy with that property tax base and those property tax rates.” ————— No. The bankruptcy court wouldn’t “laugh themselves silly”. The court would call for reorganization plans and then start asking some rather extremely pointed (very, very seriously pointed) questions. The type of questions NONE of the Chicago pols want to answer. First one would likely be when’s the referendum scheduled for… Or maybe, why hasn’t it already been done…. Good luck with those answers…. - anonin' - Thursday, Apr 16, 15 @ 5:59 pm: I never thought I’d say this but where is WJK when you really need him. - Harold's Left-wing Dinner - Thursday, Apr 16, 15 @ 6:26 pm: Rod, you sound very knowledgeable about school finance, and I’m interested in reading more. Would you post a link to your blog? - nona - Thursday, Apr 16, 15 @ 6:54 pm: == CPS’s effective tax rate is only low because (1) its levy is capped, and (2) the aggregate assessed value of Chicago property keeps going up.== But the North and Northwest suburbs plus DuPage are also capped and have rising property values. Yet their tax rates are often double those in the City. So there are some other factors at play than the two you cite. - PublicServant - Friday, Apr 17, 15 @ 7:31 am: Boy, am I surprised Not! Rauner: No CPS Buyout. The title ought to be Rauner: No nothin’ for nobody…but me and my fellow plutocrats, that is. - AnonymousOne - Friday, Apr 17, 15 @ 8:47 am: ==nothin’ for nobody== Does anyone out there remember a time when wealthy meant well-mannered, genteel, kind and philanthropic rather than snatching away any crumbs from the mouths of poor and cutting off the electricity for ventilatorsfor sick children so that any savings on the bill can go into their pocket? More, more, more. They can never have enough until they have it all. So crude and low. Have all wealthy people turned into MR. Potter? It sure appears they have. Sorry, comments for this post are now closed.