We’re one year into the administration of Gov. Bruce Rauner, but somehow we’re still in campaign season. The latest never-going-to-happen idea: a state takeover of Chicago Public Schools and, possibly, a trip to bankruptcy court.
This plan, unveiled today in semi-baked form by the Republican governor’s legislative lieutenants Christine Radogno and Jim Durkin, doesn’t have a prayer of passing a Democratic-controlled General Assembly, so why propose it?
Even if a state takeover had a shot at passage, there are reasons to doubt it’s a good idea. Other cities have tried the “run it like a business” model with unintended and sometimes disastrous results. Google “Flint Michigan” and “water” for details.
Let’s be clear: CPS is a train wreck. The Board of Education approved an irresponsible budget with a $500 million hole in it. The Chicago Teachers Union is seeking hundreds of millions of new money but isn’t willing to add a penny to the employees’ pension contributions. The system keeps borrowing to meet short-term needs, and the cost of that borrowing is only going up. And CPS—which has been led by a merry-go-round of CEOs for the past five years under Mayor Rahm Emanuel—is so incompetent that it can’t account for the desks and chairs that were in the 50 schools it closed two years ago.
Against this backdrop, the idea of a takeover has a certain appeal. But a takeover by whom? The state of Illinois? Springfield, now entering Month 7 of a disastrous budget impasse, hardly seems the right place to look for guidance on effective governance.
In response to the forthcoming legislation seeking to allow for the bankruptcy and government takeover of the city of Chicago and Chicago Public Schools being pushed by the governor and Republican leaders, Senate Assistant Majority Leader Kimberly A. Lightford released the following statement.
“The Republican administration has gone too far, and the governor has shirked his real duties to the people. If he wants so desperately to restructure Chicago Public Schools, he should start by restructuring the systemic prejudice that continues to permeate our children’s schools.
“Chicago is not a third world country to be seized by a government. This is not our path to success. All of our leaders need to treat Chicago students and teachers with respect, value them as equally as any other student or teacher and be willing to proactively restructure our education system for the next generation.”
The legislation would also allow CPS to declare bankruptcy. And Rauner tried to calm nerves that tend to fray when the word ‘bankruptcy’ is used.
“Many people hear the word ‘bankruptcy’ and you think: ‘That’s horrible. That’s a disaster. That means massive layoffs. That means firings. That means destruction of the system.’ It does not mean that at all,” Rauner said.
“In fact, the liabilities are restructured so we can afford to hire even more teachers, if it’s done properly.”
…Adding… Mark Brown is more than somewhat on the mark…
As soon as Rauner drops his union fixation, it might be possible for him to finally get something accomplished.
* From the Southeastern Illinois Agency on Aging’s Facebook page…
Illinois Aging Network Alert
I4A Alert for Tuesday January 19, 2016 (Prepared by AgeSmart)
Since September 28, 2015 the Area Agencies on Aging have been providing a weekly alert addressing the impact of the budget Impasse. Reviewing those 15 alerts we are beginning to see the erosion of services to seniors in the State of Illinois. Below is a visual of the loss of services to seniors in Illinois.
Number of reported seniors who have lost:
Home Delivered Meals - 3203
Home and Community Based Services - 6104
Loss of Jobs (FTEs) – 90.5
Since October we have seen four senior centers close and many other organizations reduce the days they are open. In a network survey about the budget impasse conducted in the fall it was estimated that if there was no budget by the end of February 84,500 seniors will be without services.
Gov. Bruce Rauner says that if Illinois takes over Chicago Public Schools, he’ll stand up to the teachers’ union on contract negotiations.
The first-term Republican governor said Wednesday that he backs a proposal to allow a state-appointed board to take over operations of the nation’s third-largest school district. An appointed authority would have the ability to negotiate new contracts.
The Chicago Teachers Union is locked in contentious negotiations with school officials. The union went on strike in 2012, its first walkout in 25 years.
Rauner accused Chicago Mayor Rahm Emanuel of caving on contract negotiations then and says Emanuel is set to do so again.
* Mayor Emanuel and Sen. Heather Steans have both said Rauner is using the issue as a “distraction” because he doesn’t yet have a budget of his own and has to submit a new one soon. Senate President Cullerton has said the governor’s “ridiculous idea” is a “distraction from the state’s problems” and that it’s “not going to happen.”
They make a very good point about the distraction stuff, but how about we focus on the policy instead?
* From the Radogno/Durkin press release…
* Recognize CPS’ financial difficulties and amends current state law, established by HB5537/PA 98-1155, to include the Chicago Public School system in the Illinois State Board of Education District Intervention law
* Specifies the process for the Illinois State Board of Education to establish an Independent Authority (IA) to run the school district and the removal of the current CPS Board of Education
* Specifies the State Superintendent of Schools must appoint 5-7 members to the Authority, who shall be selected based on expertise and knowledge in education policy and governance including local community members, in cooperation with local officials;
* Authority members must not be CPS employees or have a financial interest
* Authority members will serve without compensation
* Grants the Authority the power to serve as the School Board, with the same powers and duties; specifics the Authority cannot unilaterally cancel or modify existing collective bargaining agreements
* The Authority would serve until the State Board of Education determined CPS is no longer in financial difficulty; Provides the phase-in process for an elected CPS Board of Education and prohibits union contributions to those candidates
* Establishes that the state is not liable for the school districts’ debt.
The Chicago Public Schools educate nearly 400,000 students, almost 90 percent of them from low-income households. Five percent are homeless. Almost one-fifth are learning English as a second language. Yet against the odds and starved of resources, the state’s largest school district is achieving higher test scores and graduation rates for its students. […]
They portray their plan as merely a matter of fairness – adding CPS to an existing law allowing for state intervention in certain districts. But this could not be farther from the truth.
Illinois’ current intervention law does not require or even allow bankruptcy; in fact, Illinois does not permit any unit of government to declare bankruptcy, and the current situation in Michigan demonstrates the serious pitfalls of rushing to release governments from their financial obligations.
In addition, CPS educates more than 14 times the number of students in the largest district currently eligible for state intervention. The State Board of Education is simply not equipped to manage such a large, complex and diverse system of schools.
* The Question: Should the state be allowed to take over CPS? Take the poll and then explain your answer in comments, please.
* As you’ll recall, the House came one vote short of passing a bill to overturn Gov. Bruce Rauner’s huge child care program cuts. The lone Democrat who didn’t vote for the bill, Rep. Ken Dunkin, was involved in the negotiations to craft an alternate plan. The SJ-R looks at how that compromise is going so far…
Enrollment dropped to an average of 133,374 children in the period from July through December 2015, compared with the average total of 181,563 children in the program during the same period one year earlier, according to Illinois Department of Human Services spokeswoman Marianne Manko.
That’s a reduction of about 48,200 children, or more than one-fourth of the previous eligibility level.
Even though eligibility guidelines have been mostly restored, there’s still a gap between 162 percent of FPL and 185 percent, and the higher co-payments instituted by Rauner remain, according to Maria Whelan, president and CEO of Chicago-based Illinois Action for Children.
The current income guideline, by itself, keeps 10,000 children out of the program who normally would be admitted under the original income ceiling of 185 percent of FPL, she said.
Another 5,000 children are being denied entry because of a restriction that Rauner opted not to lift, involving children whose parents are in school but not employed, Whelan said.
That still leaves more than 32,000 children who, in theory, could be enrolled in the program but aren’t. […]
The 24,498 home-based providers who received state subsidies in August had dwindled to 19,975 by October — a drop of more than 4,500 or 18 percent, according to Service Employees International Union’s health-care division in Illinois.
Rauner promised to raise the Federal Poverty Limit eligibility to where it was before (185 percent) once we have a state budget.
* Kyle is referring to this Springfield press conference…
Higher Education Coalition Kicks Off Statewide Push for State Funding
Group Unites to Urge Lawmakers, Governor to Solve Months-Long Funding Stalemate
SPRINGFIELD – The time is now for legislators and the governor to find a solution for the stalemate over higher education funding as colleges and universities face a growing crisis heading into its seventh month, a new coalition announced on Wednesday.
The Illinois Coalition to Invest in Higher Education hosted a news conference at the Statehouse to outline what’s at stake in the ongoing funding stalemate and how that is affecting and will affect campuses around the state.
The Coalition is a collection of business, labor, and organizations representing public and private colleges and universities coming together to urge immediate action. Illinois universities and colleges have gone without hundreds of millions of dollars in MAP grants and operational funding since July, and aid has not been included in relief packages approved by legislators and the governor since the summer while they have not reached agreement on a full-year budget.
Coalition members discussed a number of problems facing Illinois campuses from the ongoing lack of funding and uncertainty about when funding will be approved, including:
· Students being unable to graduate or continue classes because their Monetary Award Program (MAP) grants that let them afford college are held up
· Prospective students – in and outside Illinois – choosing out-of-state colleges because of the funding uncertainty here
· Classes and programs being closed or suspended until funding is restored
· Employees being laid off
· Cuts creating long-term consequences for campuses – losing students and faculty/staff talent to other competitors, and projects being delayed that will cost more to complete later
The Coalition delivered a clear message: higher education cannot afford more funding delays from Springfield.
“The ongoing higher education funding crisis in Illinois is a real threat to our state because its impact is much deeper than the classrooms and productive people who fill them,” said Chris Harbourt, co-founder and CEO of Agrible, located in the University of Illinois Research Park in Champaign. “Agrible and scores of other innovative businesses like ours work to make our customers more efficient, productive and successful. Draining resources from our campuses does exactly the opposite.
“It not only hurts the thousands of students, faculty and workers on campus, but also it sends the message to business that the higher education system you depend on for your talent and support is not a priority here. We urge a quick resolution so we can refocus on creating a more dynamic, competitive workforce and business environment in Illinois.”
Tom Livingston, a University of Illinois alum and an official with CSX in the rail industry, notes business and higher ed need to work with legislators and the governor to stabilize this funding question.
“Successful states have formed strong economic and academic partnerships with their colleges and universities,” Livingston said. “Consistent investments in Illinois higher education over the decades have attracted businesses and life-changing innovation to the direct benefit of our fellow citizens.”
* One tweet does not a pattern make, but this is a somewhat interesting development from a group everybody figures is guarding Rauner’s Democratic flank…
House Speaker Michael J. Madigan released the following statement Wednesday after allies of Gov. Bruce Rauner announced plans for a state takeover of Chicago schools and to allow CPS to declare bankruptcy:
Seven months into a new fiscal year, the state still has no budget under Republican Governor Bruce Rauner, and it’s because he’s more interested in driving down the wages and standard of living of middle-class families than working together to solve our state’s problems.
Today, the sponsor of his new proposal admitted that this new plan is an attempt to force Governor Rauner’s agenda of destroying the middle class onto the Chicago Public Schools. Governor Rauner’s proposal could also help him achieve his goal of taking money away from public schools in order to establish more charter schools. Taking one unelected school board appointed by the mayor and allowing it to become a board of unelected and unaccountable bureaucrats appointed by Republican Governor Bruce Rauner is not a step in the right direction.
Governor Rauner hopes to use a crisis to impose his anti-middle class agenda. Republicans’ ultimate plans include allowing cities throughout the state to file for bankruptcy protection, which they admitted today would permit cities and school districts to end their contracts with teachers and workers – stripping thousands of their hard-earned retirement security and the middle-class living they have worked years to achieve. When Detroit was granted bankruptcy protection, retirement security was slashed for employees and retirees. That is not the path we want to follow in Illinois.
The disaster in Flint, Michigan, is a very timely example of how reckless decisions just to save a buck can have devastating consequences on children and families. In April 2014, under Republican leadership, the state of Michigan appointed an emergency manager to Flint to address a financial crisis, and switched Flint’s water source to the Flint River, which had long been known to be a dirty river. An earlier study showed that water from the river could have been drinkable had it been treated at a cost of about $36,000 a year. A crisis created by a Republican takeover could have been averted at what amounted to a mere fraction of a fraction of the state’s budget. That is not the path we want to follow in Illinois.
* And here’s Senate President John Cullerton’s response, in case you missed it in our live coverage post…
“This is not going to happen. It’s mean spirited and evidence of their total lack of knowledge of the real problems facing Chicago Public Schools. The unfair treatment of pension systems by the state is the immediate cause of CPS’ financial problem. That situation ought to be addressed rather than promoting this far-fetched notion that the state is somehow in the position to take over Chicago schools. This ridiculous idea only serves as a distraction from the state’s problems that these two state leaders should be focusing on.”
…Adding… Goldberg’s two cents…
Rep Greg Harris voted 2 allow state 2 takeover any school dist in #IL EXCEPT CPS, now against removing exception https://t.co/JJkx6NXuHZ
From: Richard A. Goldberg, Deputy Chief of Staff for Legislative Affairs
To: Members of the General Assembly
Date: January 19, 2016
Re: CSU: Lobbyists & Administrators Win, Students & Taxpayers Lose
Over the last few days, lawmakers from both sides of the aisle along with key university officials publicly agreed with the Administration that we must reform the way Illinois public universities spend taxpayer money. University of Illinois President Timothy Killeen said “he agrees with some of the concerns about excessive spending at public universities raised by an aide to Governor Bruce Rauner.” Democratic Senator Bill Cunningham said “bills are in the works to deal with some of the issues raised by Goldberg.”
At the same time, however, some university officials continue to reject reform and would rather double down on a broken system that spends tuition money without accountability or transparency. According to the Associated Press, Chicago State University spokesman Tom Wogan claimed the “characterizations of the state’s universities” contained in last week’s memo “do not fit 148-year-old Chicago State” because it doesn’t “have private jets, our president doesn’t have a country club membership.”
Mr. Wogan – a former aide to House Speaker Michael Madigan and operative for the Democratic Party of Illinois – must not remember an interview he gave to Fox 32’s Dane Placko just a few months ago in which he defended giving the university’s president a “spectacular mansion on historic Longwood Drive in Beverly” where the school “has paid more than $32-thousand dollars just for landscaping and sprinkler service alone since 2013.” Recent reports of wasteful spending, corruption and low academic performance at Chicago State are plentiful. Sadly, minority and disadvantaged students are among the worst served at Chicago State.
Chicago State Is Failing Their Students
· While 83% of white CSU students graduate in six years, only 19% of African-American students and 15% of Latino students do the same. On average across Illinois public universities, white students have a 61% graduation rate while African Americans have a 39% graduation rate. In Illinois, Chicago State has the second lowest graduation rate for African-American students (behind NEIU’s 8% graduation rate) and the second highest graduation rate for white students (behind UIUC’s 87% graduation rate).
· According to data from the Illinois Board of Higher Education, Chicago State’s enrollment fell by 45 percent from 1996 to 2014.
· For those full-time students who enrolled in 2006, 4% graduated in four years while 21% graduated in six years. For those who enrolled in 2008, those numbers got worse: 2% graduated in four years, 19% graduated in six years. According to the Chronicle of Higher Education, that puts CSU in the 2nd worst percentile nationwide.
· According to a recent Brookings Institute study, Chicago State ranks in the 6th worst percentile for the average mid-career income of its graduate.
Financial Mismanagement and Misconduct
·
In November 2015, just a couple of months ago, a former Chicago State University Vice President was indicted for hiring her mother in a ghost payroll scheme.
· In 2014, a jury awarded $3 million in back pay and damages to a former CSU employee who was fired by Chicago State’s former president in retaliation for reporting alleged misconduct by the president and others.
· In 2013, Chicago State was fined $311,963 by the federal government for allowing failing students to remain enrolled and continue collecting federal student aid. According to the Chicago Tribune, students with grades as low as 0.0 were allowed to register for classes, in part to boost enrollment.
· According to the Chicago Tribune, Chicago State doled out huge salary raises to school administrators. The Tribune reported that former Chicago State President Wayne Watson fired CSU’s Vice President of Administration and Finance after the latter raised questions about the salary increases.
· According to the Office of the Auditor General, during Chicago State’s most recent compliance audit, auditors found that the university could not locate $276,584 worth of university property.
Lobbyists and Administrators Win, Taxpayers Lose
· According to the Secretary of State’s records, Chicago State employs two firms to lobby the state on the university’s behalf: Taylor K. Anderson and James A. Deleo & Associates. At present, we do not have access to their contracts to assess compensation.
· According to a 2013 Auditor General report, CSU had, by far, the highest ratio of administrators to students of any state university – one administrator for every 17.7 students. The next highest was the University of Illinois system with one administrator for every 29.7 students.
· According to the Auditor General, Chicago State spent 45 percent of its total payroll on administrators and 55 percent on faculty – the worst ratio of any state university. The next highest was the University of Illinois system, which spent 31 percent of its payroll on administrators and 69 percent on faculty.
· According to the Auditor General, Chicago State’s administrator salaries cost $3,609 per student – the highest of any state university. The next highest was the University of Illinois system whose administrator salaries cost $2,960 per student.
· According to the Auditor General, Chicago State had the second fewest students of nine state universities and university systems, but the third most administrators.
· According to the Chronicle of Higher Education, Chicago State spent $114,762 per undergraduate completion (degrees and certificate programs) in 2013 – significantly more than the $90,406 per completion average for all Illinois public universities and the $66,436 per completion average for all U.S. public universities.
The Way Forward
The General Assembly cannot turn a blind eye to the rampant financial mismanagement inside the university system that hurts academic performance and sends tuition costs skyrocketing. Rather than creating a cash flow crisis by appropriating hundreds of millions of dollars in General Revenue Funds for MAP or general higher education without accompanying spending reductions or cost-saving reforms, let’s find a sensible and responsible way to fund MAP and higher education by tying such funding to other spending reductions or cost-saving reforms.
Radogno denied the idea is to dismantle traditional public schools in CPS in favor of charters.
“That is absolutely not true,” she said.
“It allows the state Board of Education to remove the current Chicago Public Board of Education and create an independent authority for CPS until the State Board of Education determines that CPS is no longer in financial difficulty,” Radogno said.
Durkin added that 24 states already allow local governments to declare bankruptcy, as the Republicans’ still-to-be completed legislation would do.
Sen. William Delgado, chairman of the Illinois Senate Education Committee, criticized the move.
“The governor has forced the state into a financial crisis, and now he wants to take over one of the biggest public school systems in the nation,” Delgado said in his written statement.
“I find it hard to believe that this decision has the best interest of CPS students and families in mind,” the statement continued. “We need to get CPS back on level ground, not force it into bankruptcy and then allow the governor to treat it like another business.”
I don’t think anyone’s talking about forcing CPS into bankruptcy.
* Press release…
Ald. Raymond Lopez (15) issued the following statement in response to the Republican proposal to take over the Chicago Public Schools:
“With this maneuver, Gov. Rauner has laid bare his true intentions. His purpose in stubbornly refusing to work with CPS, even at the risk of costing the jobs of thousands of teachers, is now clear: to force our public schools into layoffs and bankruptcy, in order to promote his political agenda.
“Bankruptcy and some type of state receivership could allow the Governor to vacate agreements and contracts such as pension obligations, health insurance and other benefits, and above all, the collective bargaining rights of teachers and other public employees.
“Instead of the GOP trying to highjack city government and our public schools and public services, long-term, attainable solutions for state funding are required.
“I support Sen. Andy Manar’s education funding bill as being fair and equitable for both the city and entire state. This bill is a good starting point to begin to repair the damage rather than inflicting more harm.
“What we need now is an open and honest discussion based on the goal of providing quality education through our neighborhood schools throughout our entire city.
“As a duly elected representative of the people of my neighborhood and of my city, I vigorously object to the Governor’s undemocratic attempt to disenfranchise the people of our city.
“Chicago should not allow itself to be bullied by Gov. Rauner and the Illinois GOP.”
Ald. Lopez represents the 15th Ward, which includes Back of the Yards, Brighton Park, Gage Park and West Englewood. There are seven elementary schools and three high schools in his ward.
Disenfranchise Chicagoans?
Huh?
…Adding… From 47th Ward in comments…
And everyone is taking the bait. Sigh.
Rauner can’t run Springfield. Why on earth would anyone think he’s serious about taking over CPS?
This is all a distraction to divert attention from the looming state budget disaster. This ploy is ridiculously transparent. I have a better chance of taking control of Google than Rauner has of taking over CPS.
*** UPDATE 1 *** Oy…
Responding to CPS bankruptcy idea, #CTU Prez Karen Lewis calls Rauner an emperor not a governor. pic.twitter.com/vSyNy0GCrK
“Giving control of our children’s future to a governor who can’t pass his own budget, who is racking up billions in unpaid bills, and who is crippling higher education across the state makes zero sense,” Emanuel spokeswoman Kelley Quinn said. “With just a few weeks to go before delivering a second budget address without having passed his first budget, it’s clear the Republicans in Springfield are trying desperately to distract from their own failures.”
*** UPDATE 3 *** Sen. Heather Steans…
State Senator Heather Steans (D-Chicago 7th) issued the following statement today on the announcement by Republican legislative leaders that they plan to file legislation allowing for a state takeover of the Chicago Public Schools:
The Chicago Public Schools educate nearly 400,000 students, almost 90 percent of them from low-income households. Five percent are homeless. Almost one-fifth are learning English as a second language. Yet against the odds and starved of resources, the state’s largest school district is achieving higher test scores and graduation rates for its students.
But the irresponsible agenda Gov. Rauner’s legislative allies rolled out today isn’t a reflection of those realities; it’s another politically motivated distraction from what the state and its public schools really need.
They portray their plan as merely a matter of fairness – adding CPS to an existing law allowing for state intervention in certain districts. But this could not be farther from the truth.
Illinois’ current intervention law does not require or even allow bankruptcy; in fact, Illinois does not permit any unit of government to declare bankruptcy, and the current situation in Michigan demonstrates the serious pitfalls of rushing to release governments from their financial obligations. In addition, CPS educates more than 14 times the number of students in the largest district currently eligible for state intervention. The State Board of Education is simply not equipped to manage such a large, complex and diverse system of schools.
The bottom line isn’t changing: Illinois needs a balanced budget, and Illinois’ public schools desperately need adequate and fairly distributed resources. Today’s announcement distracted from these difficult but essential objectives. If the governor and his allies in the General Assembly want to treat Chicago students fairly, they should start by supporting parity for CPS in state education funding and contributions toward teacher pensions.
The Chicago Board of Education can’t catch a break as it tries to borrow to pay for upgrades to the third-largest U.S. school system.
First, Moody’s Investors Service and Fitch Ratings cut it to one step above junk last month, delaying a planned $372 million bond sale. Then last week, before a pared-down $296 million version of the deal, set for today, Gov. Bruce Rauner said the system may need bankruptcy protection, an option that’s not legally open to it. […]
Given the system’s more than $9 billion in unfunded pension obligations and growing deficit, Rauner, a first-term Republican, raised the specter of bankruptcy April 14 at an education forum in Chicago. The governor, who supports giving Illinois localities authority to file for Chapter 9 reorganization, repeated his claim that union contracts are putting local governments in financial peril.
The Chicago Board of Education will sell $875 million of bonds on Jan. 27, according to Bloomberg data from J.P. Morgan, an underwriter on the deal. The deal is made up of $796 million of tax-exempt securities and $79 million of taxable debt, according to bond documents. The proceeds will cover capital projects, convert variable rate debt to fixed, fund swap termination payments and pay debt-service bills, bond documents show.
So, the governor played up the bankruptcy angle the last time CPS went to the financial markets and he’s doing it again just days before CPS sells more bonds.
* I think I’m going to try and make this a regular feature. Here’s Mark Konkol…
Gov. Bruce Rauner came to Pullman Tuesday to promote a new effort that as far as anyone can tell is aimed to boost the clout of poor, minority entrepreneurs in hopes they might be more successful navigating the racial inequities that exist in big business and banking industries that have been controlled for generations by rich white men.
Rauner, a white multimillionaire capitalist with considerable clout, didn’t directly mention race to explain the benefits of his Advancing Development of Minority Entrepreneurship pilot program.
He put it this way: “We are jumpstarting minorities’ entrance into the web … of business relationships that gets transactions done. Minorities haven’t been in the … network.
“You can call it the Old Boys Network or whatever you want. It’s relationships of past success that drives future success; we have to jumpstart minority entrepreneurs into that web, into that network. That’s what this is about.”
UrbanDictionary.com defines the “old boys network” that Rauner refers to as the “informal system by which money and power are retained by wealthy white men through incestuous business relationships. It is not necessarily purposeful or malicious, but the ‘Old Boys Network’ can prevent women and minorities from being truly successful in the business world.”
One reporter asked the governor if he could be “candid about why … capitalists have not ventured into the hood before now?”
* From the Illinois Policy Institute’s news service…
Governor Bruce Rauner said Tuesday he does not control whether AFSCME strikes. But, Rauner said, he will be the first governor to stand up to the union.
“That makes them a little cranky and it’s one of the reasons they wanted me out of the negotiations. That’s my duty, representing the taxpayers. If every elected official said to them ‘if you’re going to say you’re going to strike and I can’t stand that so I’m going to give you whatever you ask for,’ then there is no balance of power. That’s what is going on in Illinois and the city of Chicago for decades.”
Rauner also says he has no intention to shut down government or to lock workers out.
The union has said the governor is trying to force a strike, something Rauner says is nonsense.
“I don’t control whether AFSCME strikes or not. I don’t control that. They decide. That’s their right. I hope they don’t. I have asked them not to strike. I said it would be terrible for the people of Illinois. What I have said is…if you do choose to strike, we’ll stand up to you and we’ll win”.
The governor says that somebody has to stand up to the union or else there will be continued economic decline. Rauner’s administration announced they asked for the Illinois Labor Relations Board to review negotiations to declare if there’s an impasse. AFSCME says they’re still willing to negotiate but the governor has said they don’t think continuing negotiations would be worthwhile.
* The governor also said yesterday he was “misquoted” about being willing to shut down the government.
“I may have to take a strike and shut down the government for a few weeks,” he said, with Dan Proft looking on. Rauner said he might not be happy about it, but “I will do it probablyproudly because it’s the right thing to do.”
Two years after Mayor Rahm Emanuel closed a record 50 schools over low enrollment, officials say they don’t know where many of the computers, desks, books and other items from those buildings ended up.
After being pressed for more than six months on what happened to the classroom equipment, Chicago Public Schools officials now say they don’t have an answer.
They blame bad record-keeping under Barbara Byrd-Bennett, Emanuel’s disgraced former schools chief, who awaits sentencing after pleading guilty in October to steering millions of dollars in CPS contracts to her former employer in exchange for what prosecutors said were promises of kickbacks.
“Unfortunately, the previous CPS administration did not adequately manage or keep records on the day-to-day operations of the transition logistics,” CPS spokeswoman Emily Bittner says.
B3 can’t totally take the fall for this, can she? I mean, she wasn’t personally tracking the movements of furniture, was she? Or is this just par for the CPS bureaucratic course?
• CPS says it has no records on what happened to any of the books from the closed schools.
• There are more than 9,400 desktop and laptop computers listed on inventories of schools that were closed. Of those, 3,724 were “redeployed” to other schools or to CPS headquarters, according to CPS, which says the rest were “disposed” of — though how or where isn’t clear.
• More than 33,000 chairs and roughly 12,000 desks and 6,000 tables were listed in good condition in the closed schools, CPS records show. About 9,500 of those chairs, 3,900 desks and 1,000 tables apparently were moved to other buildings. It’s unclear where the rest went.
It kinda goes without saying that if you want lots more money from the state for your school system, then this sort of news isn’t going to help matters much.
According to an analysis released today by the institute, $53 million is the “penalty” the state paid when it sold $480 million in general obligation bonds last week.
Specifically, it’s how much the state garnered from the sale compared with how much it would have netted in 2006, before the state’s credit rating repeatedly had been lowered.
Here’s how bond sales work: An interest rate is set, but then buyers bid for how much they’re willing to pay to get that return, effectively raising or lowering the price. Last week’s sale netted prices ranging between 98 percent and 114 percent of par value, depending on time to maturity. But the state got 104 percent to 127 percent of par value a decade ago. The difference between the two is $53 million, roughly $568 million for the state versus the $515 million we actually got.
Last week’s GO sale was the first since Gov. Bruce Rauner and House Speaker Mike Madigan went to war over the budget, tax hikes, the governor’s “turnaround Illinois” agenda, etc. But it won’t be the last. And if the standoff continues, the penalty could double on future sales, says study author Martin Luby, an institute visiting scholar from DePaul University.
Rod Blagojevich was governor in 2006, the benchmark for this study. The economy wasn’t great, but it was fairly decent. Blagojevich and Speaker Madigan started warring with each other right after Blagojevich was reelected and the feud didn’t end until early 2009. Because of this, the state government was totally unprepared to deal with the Great Recession.
• The $53 million financial condition penalty estimate only relates to the 2016 Bonds. Assuming that future debt sales will be at typical levels of about $1 billion each year, this financial condition penalty grows to $106 million per year.
• Furthermore, based on recent analyses, the state will need to issue much more annual debt than in the past to address its growing infrastructure needs. A recent estimate of the annual bond amount required to address these needs is $4 billion. At this $4 billion annual bond level, the financial condition penalty estimate grows to $424 million per year.
• Even in the context of the overall state budget, this $424 million is a significant annual amount of money, especially given the dire fiscal straits the state finds itself in today. For example, this $424 million would provide a substantial amount of the extra funding that the Chicago Public Schools is requesting from the state to address its budget deficit.
In other words, the governor’s projected revenue gains from passing his Turnaround Agenda will barely cover the added bond costs as a result of this impasse.
“Chicago Tonight” has learned that Gov. Bruce Rauner and top Republican leaders are planning to introduce legislation aimed at an emergency financial takeover of the city of Chicago and Chicago Public Schools. This comes in light of an imminent $500 million shortfall within the Chicago Public Schools system.
The Republican leaders are set to announce the legislation tomorrow, but Paris Schutz has the exclusive information tonight.
Sources tell “Chicago Tonight” that the governor and his top two legislative leaders – Senate minority leader Christine Radogno and House minority leader Jim Durkin will file a package of legislation Wednesday that would allow for an emergency financial oversight board appointed by the state to take over the financially strapped school district. Other legislation would allow for emergency financial oversight of the credit-beleaguered city of Chicago.
Legislation would also allow for CPS and the city of Chicago to declare bankruptcy – something by law both cannot currently do.
We’re also told that the legislation would call for an elected Chicago Public Schools board once the financial situation is remediated. This, in light of the fact that CPS has set now as a deadline to receive $500 million in relief from the state or else lay off thousands of employees, including teachers.
“The mayor is 100 percent opposed to Gov. Rauner’s ‘plan’ to drive CPS bankrupt. If the governor was serious about helping Chicago students, he should start by proposing — and passing — a budget that fully funds education and treats CPS students like every other child in the state,” Emanuel spokeswoman Kelley Quinn said in a statement Tuesday.
Radogno brought up the bankruptcy option on last weekend’s “Sunday Spin” radio show on WGN-AM 720. Declaring bankruptcy would allow the district to ditch its union contracts, which dovetails with Rauner’s broader union-weakening push.
On Tuesday, Rauner was asked about a CPS bankruptcy bill and took shots at the mayor.
“I’m worried that the mayor is failing. The mayor gave in and caved on the (teachers) strike 41/2 years ago. Hurt the taxpayers, hurt the schoolchildren as a result. I’m very concerned about the trajectory of where we’re going with CPS. And right now, the mayor’s only real message to the state government is ‘Hey, we failed financially our schoolchildren, send us half a billion dollars. That’s not a reasonable position for the mayor to take,’” Rauner told reporters.
“The governor is defending a school funding system that is separate but unequal. Our children are facing systematic discrimination. CPS represents 20 percent of state enrollment but gets just 15 percent of state funding, even though 86 percent of our children live in poverty. The missing 5 percent represents nearly $500 million, the exact amount of our budget gap. Our children’s futures are just as important as those in the suburbs and downstate. But the state does not value them equally.”
Rauner is in the midst of a political war with Illinois House Speaker Mike Madigan, whose spokesman Tuesday night likened the takeover proposal to the state of Michigan’s takeover of Flint, Michigan which is now in the midst of a water lead poisoning crisis.
“I would say that anybody worried about state takeovers should look at Flint, that’s what takeovers look like,” Brown told POLITICO. “That may be the template you may want to use when you evaluate whether it’s a good idea to take over. Look at what happened to the people in Flint and try not to repeat mistakes.”
The school proposal would include a provision that would apply state oversight rules to Chicago schools if the district falls below a certain financial threshold, sources say. Under state law, school boards can be removed and replaced by the state board when that happens. CPS was exempt from the oversight, but the proposal would remove that exemption.
Um, but as that article points out, the General Assembly passed a bill last year to do just that.
* One of the bill’s Democratic sponsors talked to Greg Hinz…
Specifically, I’m told, the package offered by the two top Republicans would extend to Chicago a measure authored by Sen. Heather Steans that allows the state to intervene in and effectively run troubled downstate and suburban districts. Such a move would be initiated by an independent review panel appointed by the State Board of Education.
The bankruptcy measure likely would be in separate legislation. Local units of government are not allowed to file for bankruptcy under current state law, but a pending GOP bill in the House would allow cities and villages to file.
Steans, in a phone call, confirmed that her takeover bill last year excluded CPS, which has been treated differently than other districts since lawmakers turned control over to then-Mayor Richard M. Daley a generation ago.
Steans said her view of a state takeover of CPS might depend on whether it came with additional state aid, but said bankruptcy would be “insane,” potentially undoing gains in CPS performance in recent years. “You’d have a much harder time fixing the schools” under a bankruptcy filing, she contended.
* I’m told that Radogno and Durkin could claim today that the legislation is the result of anxious constituents who worry that the city and CPS will drag the state down. The press conference is at 9:30. I’ll have live coverage.
