Another front opens on CPS
Friday, Feb 19, 2016 - Posted by Rich Miller
* Sun-Times…
A day after Gov. Bruce Rauner accused a broke Chicago Public Schools of getting special treatment from the state, his handpicked state education team launched a financial investigation of Illinois’ largest school district that could lead to the takeover the governor is seeking.
CPS must turn over detailed financial information about cash flow, bonds, payroll and major contracts by March 4. That’s according to a letter sent Thursday by Tony Smith and James Meeks, the superintendent and the board chairman of the Illinois State Board of Education, about CPS’ “concerning financial situation.”
* Tribune…
ISBE said CPS was put on “financial watch status” in March 2015. That allows the state to require financial information “relevant to a proper investigation of the district’s financial condition and the delivery of appropriate state financial, technical, and consulting services to the district,” ISBE said in its letter.
Financial information sought by state officials also includes three-year financial projections and assumptions, monthly payroll amounts and debt schedules that could determine if more state aid or other revenue are needed to pay off debt instead of financing operations.
“As you may be aware, an investigation into a district’s financial condition is the first step in a process of determining if conditions exist for ‘certification of financial difficulty,’” ISBE said in its letter. […]
A CPS spokeswoman said much of the information requested by the state is already publicly available and repeated the district’s position that Rauner has no authority under state law to impose any oversight. She suggested that the governor, by calling for a law to allow CPS to declare bankruptcy, was responsible for the extraordinarily high interest rates the district recently paid to borrow $725 million.
* CBS 2…
A CPS spokesperson released a statement blaming Rauner for harming CPS’s finances.
“CPS has cut its budget deficit by nearly a third, and done everything in our power to keep cuts from our classrooms,” the statement said, in part. “The last time Governor Rauner offered his financial advice … Chicago taxpayers were forced to pay even more for our bonds, and we cringe at what his latest venture could cost our children.”
* More…
Claypool retorted that the state’s arrangement with its largest district, where nearly eight of nine children are poor, is a “raw deal,” and he urged other districts by name to lobby for a fairer funding formula.
“We have to come together as citizens of this state to fight against the governor for the children who are most disadvantaged,” Claypool told reporters,. “That is a statewide issue. It is important to us in Chicago but it’s important in communities throughout the state of Illinois.”
The ISBE letter is here.
* Meanwhile…
A state board that oversees school labor disputes ruled against immediately reinstating raises for education and experience to members of the Chicago Teachers Union, but could reconsider the teachers’ request at a later trial.
A cash-strapped Chicago Public Schools told the union over the summer that it wouldn’t pay the “steps and lanes” raises while the parties negotiated a new contract to replace the one that expired June 30.
In November after several months of bargaining, the union filed a grievance with the five-member Illinois Education Labor Relations Board asking for immediate help. Three of the board’s members were appointed by anti-union Gov. Bruce Rauner.
The ruling was unanimous.
- Oswego Willy - Friday, Feb 19, 16 @ 9:21 am:
Without TWO budgets, Gov. Rauner now wants to wade into the finances of CPS with the K-12 Approp hanging out there, “stand alone, no games”, begging for it to come to him to be signed?
Ok.
Adding more fronts usually leads to “losing”, even when trying to say to anyone who will listen, “I’m winning”.
It’s breathtaking how Rauner is so oblivious.
This type of move also takes away the visual of Rahm owning the mess. Now, Rauner, takes a huge step to owning the continual CPS gridlock, with no solution, legislatively, in the offing.
They may regret this.
- Beaner - Friday, Feb 19, 16 @ 9:23 am:
More smoke and mirrors to distract the public from the fact Governor Hot Checks has produced two multibillion dollar out of whack unbalanced budgets at a time of low and decreasing unemployment. Imagine what it will be like when the next slowdown rolls into town.
- Robert the 1st - Friday, Feb 19, 16 @ 9:23 am:
OW- have you ever imagined for one second, Rauner doesn’t care about politics? You do know he spent $26 million of his personal funds for his campaign right? You might not agree, but maybe he think he’s doing what’s right?
- DuPage - Friday, Feb 19, 16 @ 9:24 am:
Three of the five members of the Illinois Educational Labor Relations Board were appointed by Rauner? I foresee trouble ahead for not only the CPS but all schools, community colleges, and state universities statewide.
- Anonymous - Friday, Feb 19, 16 @ 9:28 am:
BusinessInsider has an article this week detailing why it is hard to see CPS staying solvent long-term without massive tax increases by the city. The combination of their debt levels along with the city and state debt levels do not bode well. CPS already has an $800Mill deficit to close for next year’s budget as well.
- Oswego Willy - Friday, Feb 19, 16 @ 9:29 am:
- Robert the 1st -
You make it all about Rauner, I thought Rauner was “workin’ for us”?
See why I realize what you say but I’m more focused on the hypocrisy that is Bruce Rauner?
Making himself happy isn’t ablut makin’ Illinois great again.
- JustRight - Friday, Feb 19, 16 @ 9:37 am:
I like how CPS says “CPS has cut its budget deficit by nearly a third” … like that’s an accomplishment? So they’re still spending 100s of millions each year they don’t have, just not as many 100s of millions? They are borrowing money at super high interest rates to pay current operations and pension obligations. This is no sustainable and not fair to taxpayers. There have been no meaningful reforms to cut waste or obligations yet they ask taxpayers to foot the ever growing costs of running a broken system. File bankruptcy and restructure now! Before you as for another tax increase to through money in a big blackhole.
- thunderspirit - Friday, Feb 19, 16 @ 9:42 am:
I can’t decide in which I have less faith: CPS’ financial situation, or an investigation into it by a board which has a majority appointed by a Governor who’d prefer to privatize public education Statewide.
- Anonymous - Friday, Feb 19, 16 @ 9:43 am:
From 1995 to 2004, the city of Chicago didn’t contribute one nickel to the school district’s pension system, even though it is responsible for a portion of contributions in addition to what employees put in.
That was followed by pension holidays from 2011 to 2013, where the city made smaller payments than necessary.
Whatever Rauner does here, he is not the cause of CPS’ problems. He is currently one of the only people attempting to do something other than kicking the can or supporting the status quo which has gotten CPS, the city and the state so much in debt.
- Oswego Willy - Friday, Feb 19, 16 @ 9:44 am:
- JustRight -
CPS can’t declare bankruptcy. Can’t.
Your ignorance is compelling.
Ugh.
- Mama - Friday, Feb 19, 16 @ 9:44 am:
Does the IL School Code allow ISBE to take over CPS?
- Out Here In The Middle - Friday, Feb 19, 16 @ 9:45 am:
Robert –
I totally agree with you that Gov Rauner thinks that he is doing “what is right” for Illinois. Unfortunately the state that he and his friends live in and the state that most of the rest of us occupy are radically different. And slipping further apart due to his actions.
- Oswego Willy - Friday, Feb 19, 16 @ 9:49 am:
Because a man spends $26 million to become a governor, abd uses $20 million to usurp a political party, it doesn’t matter if that person plans on running again, or sees themselves above politics…
Governing and the politics of governing are the processes to effect change, not $26 million in receipts.
- Tequila Mockingbird - Friday, Feb 19, 16 @ 9:53 am:
Mama, ISBE can take over any other district for just cause but I don’t know about CPS. The IL School Code is a weird thing- its more like 2 codes. One for CPS and One for the other 800+ districts.
- Robert the 1st - Friday, Feb 19, 16 @ 9:55 am:
=that most of the rest of us occupy are radically different=
Most of “us” on this site, yes. Most IL residents aren’t AFSCME members.
- Politix - Friday, Feb 19, 16 @ 9:59 am:
“have you ever imagined for one second, Rauner doesn’t care about politics?”
Aw…you’re cute.
- Politix - Friday, Feb 19, 16 @ 10:04 am:
“This type of move also takes away the visual of Rahm owning the mess. Now, Rauner, takes a huge step to owning the continual CPS gridlock, with no solution, legislatively, in the offing.”
This. 100%.
- Demoralized - Friday, Feb 19, 16 @ 10:07 am:
==but maybe he think he’s doing what’s right==
That’s the scariest thing of all. What’s right to him seems to be a path to “average.” Nothing in Illinois can possibly be better than what other states have or what other individuals have.
- The Middle - Friday, Feb 19, 16 @ 10:07 am:
In addition to using ISBE to bust Rahm’s chops, I get the feeling Rauner is goading CPS into filing a lawsuit on education funding.
Such a lawsuit would fire-up the “Chicago vs. everyone else” political narrative that Rauner is increasingly pushing.
But he’s playing with fire. Courts in other states, like California, have gotten pretty active in imposing funding formulas on governors and legislatures when faced with equal protection lawsuits brought by advocacy groups. Rauner could end up with another consent decree he doesn’t like.
- Robert the 1st - Friday, Feb 19, 16 @ 10:08 am:
I suppose I should have said politics wasn’t his #1 concern.
I still remember many posters here were predicting Rauner planned to run for president this year. You people get blinded by politics.
- Demoralized - Friday, Feb 19, 16 @ 10:09 am:
==I suppose I should have said politics wasn’t his #1 concern.==
Apparently governing isn’t either
- Robert the 1st - Friday, Feb 19, 16 @ 10:12 am:
=Nothing in Illinois can possibly be better than what other states have or what other individuals have.=
Well IL is doing horrible financially. I know you hate it, but maybe government employee compensation will have to just be a little better than average for a few years. That’s all Rauner is proposing.
- JS Mill - Friday, Feb 19, 16 @ 10:14 am:
@Mama- In a word- No.
Someone, with credibility (an important caveat) should go through CPS’ books. The ISBE does not have the capacity let alone the budget for it.
A real solution, amend the statute and allow cook county to assess property (EAV) at 33 1/3 of fair market value. That solves the financial issues of any Cook County district/government that is struggling financially.
- 47th Ward - Friday, Feb 19, 16 @ 10:14 am:
If Rauner wanted to run CPS, why didn’t he run for Mayor?
Maybe his time would be better spent trying to find that elusive 60th vote in House for his Turnaround Agenda. There are about 12 million of us waiting for a budget. Anytime Rauner wants to go to work, fine with me.
- Demoralized - Friday, Feb 19, 16 @ 10:16 am:
Robert the 1st:
I’ll never understand the joy you get in seeing others harmed financially. That’s just sad.
- Anonymous - Friday, Feb 19, 16 @ 10:17 am:
Robert the 1st:
And the Governor is proposing to CUT take home pay. I don’t know about you but that’s not something a lot of us can really afford.
- Demoralized - Friday, Feb 19, 16 @ 10:17 am:
That was me above.
- JS Mill - Friday, Feb 19, 16 @ 10:18 am:
=I get the feeling Rauner is goading CPS into filing a lawsuit on education funding.=
Based on how the constitution is written and past legal action in Illinois a suit of this type will fail.
Property poor districts get more state financial aid than property wealthy districts.
Illinois system is devised that way and that is how it is being funded. That is why a lawsuit will fail.
That is not a statement supporting the current funding method just a statement of fact.
- Politix - Friday, Feb 19, 16 @ 10:19 am:
Robert, quit trolling.
- Louis G. Atsaves - Friday, Feb 19, 16 @ 10:21 am:
So CPS is under a financial watch status since 2015 and does not want to disclose its finances. I was under the impression that being placed in a financial watch status as a school system required CPS cooperation over finances.
CPS has been blowing tons of smoke about its finances and threatened shut downs due to lack of cash for quite a while now.
Time to put up or shut up.
- Robert the 1st - Friday, Feb 19, 16 @ 10:22 am:
=I’ll never understand the joy you get in seeing others harmed financially. That’s just sad.=
I do know why you always say I get joy from harming others.
A fair comeback would be “you get joy from raising taxes on your neighbors.” But that sounds as dishonest and simplistic as your assessment of me, doesn’t it?
- Robert the 1st - Friday, Feb 19, 16 @ 10:24 am:
=CUT take home pay=
Only if you don’t settle for the new health plan.
- Demoralized - Friday, Feb 19, 16 @ 10:24 am:
My posts aren’t coming through. Let’s try this again.
I don’t know why the state would want to take over CPS. The state can’t even get it’s own act together. The Governor still seems to be in CEO mode rather than governing mode. Government isn’t a business to be taken over. Government requires governing. Governor Rauner hasn’t learned how to govern yet.
- Mama - Friday, Feb 19, 16 @ 10:29 am:
JS Mills @ 10:14AM- are you saying the IL School Code allows ISBE to take over CPS, but ISBE does not have the staff or funds to conduct the investigation? -Or- Are you saying the law does not allow ISBE or the governor to take over CPS?
- Demoralized - Friday, Feb 19, 16 @ 10:29 am:
Either way it’s a cut Robert the 1st. One way or another cash available is going down, either through premium increases or out of pocket increases at the doctor, hospital, pharmacy, etc.
But I realize this conversation is off topic so I’ll police myself here and end this back and forth on your nonsense.
- JS Mill - Friday, Feb 19, 16 @ 10:31 am:
=JS Mills @ 10:14AM- are you saying the IL School Code allows ISBE to take over CPS, but ISBE does not have the staff or funds to conduct the investigation? -Or- Are you saying the law does not allow ISBE or the governor to take over CPS?=
The Illinois School Code does NOT allow the ISBE (state) to take over CPS. Period.
Even if they could, the ISBE does not have the capacity to handle such a task. Period.
- @MisterJayEm - Friday, Feb 19, 16 @ 10:35 am:
“He’s offering you a choice, Sophie…”
– MrJM
- nixit71 - Friday, Feb 19, 16 @ 10:39 am:
@Robert:
I raised the argument on here before that a tax hike essentially takes money from my children’s college savings fund. And I asked them to justify why even more money should be taken from my child’s savings. No one had an answer.
Folks seem to think tax hikes are paid by cutting back on caviar, trading in a Range Rover, or changing the family vacation from Paris to Starved Rock. But the truth is that for most working families, a tax hike means less money available to save…from retirements to college funds. And that money lost never earns interest and never gets to compound (never gets to fall in love, never gets to be cool), thereby costing exponentially more in the future. Somehow, this is viewed as selfish.
I’m willing to pay more in taxes. I realize 3.75% ain’t gonna stick. But at least you guys can do is look my kid in the eye before you take his money. Because that is what a tax hike is. His financial future is just as much at-risk as any of the at-risk groups screaming for more taxes. Am I not entitled to stand for him? No one else is.
- NixonHead - Friday, Feb 19, 16 @ 10:46 am:
The notion that Rauner’s comments led to high interest rates for CPS is ridiculous and reflects further the lack of financial competence at CPS. CPS has been a financial mess for quite some time, most conveniently demonstrated by the Ernst & Young report. Rauner did not help CPS get into the mathematical mess that they have caused, which truly leads to high interest rates. Bond traders in NYC don’t react with emotion to what the Governor of Illinois says when they buy bonds, they base their purchase and price their risk on the accounting realities of the entity that issues the debt.
- anon. - Friday, Feb 19, 16 @ 10:57 am:
I am hoping one of the commenters can come up with actual numbers. How much in actual $$ was sent by the state to CPS in FY15 and so far in FY16 and how much was sent to the rest of the school districts? The school aid is so convoluted plus special “block grants”. Thanks.
- crazybleedingheart - Friday, Feb 19, 16 @ 11:05 am:
==This type of move also takes away the visual of Rahm owning the mess.==
Feature, not a bug.
- Random Poster - Friday, Feb 19, 16 @ 11:10 am:
A fair comeback would be “you get joy from raising taxes on your neighbors.” But that sounds as dishonest and simplistic as your assessment of me, doesn’t it? AND “Because that is what a tax hike is. His financial future is just as much at-risk as any of the at-risk groups screaming for more taxes. Am I not entitled to stand for him? No one else is.”– So when taxes are raised it’s ONLY on you? And not everyone in the state pays taxes? These ‘hated/spoiled’ some 55,000 workers workers in a state of 12 million, they don’t also pay these same taxes? They don’t also have kids who need money for education. Taxes aren’t subjective.
- The Middle - Friday, Feb 19, 16 @ 11:13 am:
@JS Mill said == a suit of this type will fail ==
I agree that any plaintiff bringing such a suit is more likely to fail than prevail, but it is no slam dunk. Yes, the formula does send more money to property poor districts, but the wide disparities in what is spent to educate poor and affluent kids in Illinois is so striking, it might be ripe for a challenge. Don’t forget, the property tax system is set by state law too. A court could find the state’s school funding formula and property tax system together have the effect of denying poor students equal protection. The success of such a suit is probably unlikely, but it is by no means impossible, particularly if it focuses on federal civil rights violations and not the Illinois constitution”s language about the state’s school funding obligations.
- Rich Miller - Friday, Feb 19, 16 @ 11:17 am:
===The success of such a suit is probably unlikely===
Patrella v. Brownback
On June 1, 2015, the United States Court of Appeals for the Tenth Circuit upheld the District Court’s denial of the order against the state’s cap on the amount of property tax revenues that a local district can raise for schools. Plaintiffs in Patrella v. Brownback argued that the state limited their ability to raise local taxes, resulting in the discharging of school staff and the reduction of other educational services. The decision, which emphasized, “Equity in education is obviously a legitimate governmental interest,” strongly rejected these claims.
Rejecting a petition filed by the plaintiffs, in December, 2015, the United States Supreme Court declined to review the 10th Circuit’s Decision.
- Anonymous - Friday, Feb 19, 16 @ 11:20 am:
Allowing CPS to continue “budgeting” as they have been for decades is scarier than anything Rauner could ever do to make CPS finally stop running their finances into the ground.
- Mason born - Friday, Feb 19, 16 @ 11:21 am:
Nixit71
Your absolutely right that a tax increase takes money out of you and your childrens funds. No disputing that. You absolutely should advocate for your child. A key thing to remember however is that those state employees are also advocating for their children as well. As you realize we will have a tax increase no matter what the math is just too brutal. What Rauner is asking is for State Employees to take a big hit in the wallet, taking money out of their childrens college fund, and then take the tax hike too. So have a little sympathy and realize they are advocating for their own children.
People like Robert seem to think all State Workers are the equivalent of unionized welfare and the money they lose was a gift from the state in the first place. There are state positions that receive more than the private sector equivalent. There are also positions that are underpaid compared to the private sector most of those being technical/proffesional. Some of which the state tends to get the least qualified candidates because of the salary and benefits. This is an unpleasant reality for the church of Rauner. “We can evade reality, but we cannot evade the consequences of evading reality.” Ayn Rand
- Politix - Friday, Feb 19, 16 @ 11:22 am:
“I am hoping one of the commenters can come up with actual numbers.”
Rich posted on CPS school funding yesterday. Try and keep up.
- Robert the 1st - Friday, Feb 19, 16 @ 11:23 am:
=So when taxes are raised it’s ONLY on you?=
AFSCME was the only group of “taxpayers” I remember chanting “raise the taxes!” in Springfield. Correct me if I’m wrong, but didn’t state workers get a hefty raise when the tax hike they lobbied for took effect? Didn’t their take-home actually increase? They lobbied for both the tax and the raise.
- JS Mill - Friday, Feb 19, 16 @ 11:30 am:
=Am I not entitled to stand for him?=
You are not the only person paying taxes or the only person that has a family.
What I can say if you lived in my district is that our goal is to leverage available resources to serve the needs of students and help them achieve their goals and aspirations including the opportunity to attend the college or program of his choice.
If his school is not very good and he is not able to overcome that it really does not matter how much money is in his college savings account.
- Politix - Friday, Feb 19, 16 @ 11:30 am:
“Didn’t their take-home actually increase?”
Yep. It’s called a contract. You sound jealous.
- lake county democrat - Friday, Feb 19, 16 @ 11:51 am:
Let me see if I have the anti-Rauner crowd right:
1) CPS is asking the state for financial help.
2) The state is asking to see “financial information about cash flow, bonds, payroll and major contracts.”
Outrageous! Even worse, extreme! Obviously since our Democratic reps aren’t interested in this information nobody else should be either. I mean, there could be loads of waste (or worse), but that might be used to justify demanding reforms and we can’t have that.
- HangingOn - Friday, Feb 19, 16 @ 11:51 am:
==the only group of “taxpayers”==
Funny, I actually know more people who *don’t* work for the state who complain they can’t imagine why they dropped the tax rate back. They understand that things were getting paid and revenue is needed. Some of those actually sell things to the state (goods or services) and were excited to actually be getting paid in a timely manner for a while. But I guess you probably lump the vendors in with the state workers, since they’re getting paid from tax money too.
- Amalia - Friday, Feb 19, 16 @ 12:12 pm:
investigation to lead to takeover. takeovers usually involve selling off and laying off. perhaps Rauner doesn’t realize that not all of government works that way. Privatization cannot solve all, including with decent finances. Or perhaps he does not actually care about public service.
- Austin Blvd - Friday, Feb 19, 16 @ 12:21 pm:
We frequently discuss the sellout Dubkin. Perhaps it’s time to revisit the sellout, opportunist Sen. Rev. Chmn. Meeks.
How are his “constituents” doing under his boss?
- TinyDancer(FKA Sue) - Friday, Feb 19, 16 @ 12:30 pm:
This is a no-brainer.
Public schools are taxpayer-funded.
Illinois school funding relies heavily on property taxes - a regressive tax.
A progressive tax - a graduated state income tax - would ease the school-funding burden currently placed on property owners. It would also reduce the funding disparity between rich and poor school districts.
A fair progressive graduated state income tax would place more of the school-funding burden where it belongs - on those who can most easily afford it.
- Robert the 1st - Friday, Feb 19, 16 @ 2:05 pm:
=You sound jealous.=
No more so then a car-jack victim is jealous of his assailant’s “new” car.
- Louis G. Atsaves - Friday, Feb 19, 16 @ 2:11 pm:
@lake county democrat: good summation!
- Mason born - Friday, Feb 19, 16 @ 2:13 pm:
Right Robert because state employees are violent felons who steel cars from innocent people. Grow up!
Welcome to the Church of Rauner where logic, math, and reason are shunned while hyperbole and blind allegiance to the Holy Bruce are doctrine.
- RNUG - Friday, Feb 19, 16 @ 2:27 pm:
== Adding more fronts usually leads to “losing”, ==
Rauner has apparently never read ‘The Art of War’. Thought that was almost required reading for a MBA.
== but maybe he think he’s doing what’s right? ==
He’s on a Crusade …
== From 1995 to 2004, the city of Chicago didn’t contribute one nickel to the school district’s pension system, even though it is responsible for a portion of contributions in addition to what employees put in. ==
They wanted control and messed it up. It is up to the taxpayers of CPS to bail it out.
==
- Politix - Friday, Feb 19, 16 @ 2:33 pm:
“No more so then a car-jack victim is jealous of his assailant’s “new” car.”
lol - so bitter
- Mama - Friday, Feb 19, 16 @ 2:58 pm:
++- JS Mill - Friday, Feb 19, 16 @ 10:31 am:++
“The Illinois School Code does NOT allow the ISBE (state) to take over CPS. Period.”
“Even if they could, the ISBE does not have the capacity to handle such a task. Period.”
Thanks for the clarification.