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Tribune Looks At The Mismanagement That Led To CPS' Historic School Closures

By Chuck Sudo in News on Dec 7, 2013 5:00PM

Image credit: alamosbasement

Mayor Rahm Emanuel and Chicago Public Schools officials repeatedly said the decision to close 54 schools at the end of the 2012-13 school year was predicated on saving the school district money amid declining enrollments and a lack of funds. Opponents of the plan, however, said CPS should had years to fend off these closures and put the district on solid financial footing.

The Tribune published a detailed, interactive investigation that looks at how the city wasted money spending general obligation bonds—starting in the Daley administration—with little in the way of restrictions, oversight, or the consideration of that spending's long-term ramifications on future generations of Chicagoans. Basically, it's the governmental version of living off credit cards.

The Tribune found the city spent $9.8 billion in general obligation bonds from 1989 through 2012. That money, ostensibly intended for infrastructure improvements, was instead spent on items like software that became obsolete; spare parts for vehicles; the greening initiatives that were part and parcel of the Daley administration, such as flowers and extra trash bins; and even bags to pick up dog shit.

The Tribune calls the spending "equivalent to taking out a 30-year mortgage to buy a car and making your children—or grandchildren—pay it off, with interest.

Once the Tribune establishes the pattern of wasteful spending, it moves the focus of the investigation to CPS itself. Of note in this is the school district's old headquarters on West Pershing Road and how the city spend millions in bond obligations to repair the complex even as CPS abandoned the complex for newer, more modern facilities.

Chicago’s bond money at work from Chicago Tribune on Vimeo.

The city spent this money despite a warning from a top official the complex was a "financial sinkhole;" today the complex has been deemed as a hazard by a building inspector. The investigation touches on the diversion of tax increment financing that was so prevalent during the Daley administration but it also shows CPS didn't spend what TIFs it had at its disposal (much of them came from TIF districts intended for blighted communities) wisely, pumping millions into new school buildings that are currently underutilized and repairs of older structures the district eventually shut down.

Compounding this spending is the city's practice of refinancing its debt: Chicago's long-term debt has quadrupled between 1995 and 2002 and now stands at $14 billion. In a time period where low interest rates can help municipalities reduce what they have to pay in debt, some of the refinancing deals made under the Daley and Emanuel administrations have worsened the city's long-term debt. The investigation shows Emanuel has continued this "scoop and toss" practice even as he's slashed budgets and laid off workers.

The combined practices have led to a financial reckoning for Chicago and particularly CPS. The Tribune found that in 2011 the district spent more than a quarter of unrestricted state aid intended for education payments on debt obligations, instead.

Yet CPS still spent bond money as enrollment in the system decreased, as predicted by experts.

More than $1 billion was spent on schools that are now less than 60 percent full between 1996 and present day, and spent millions more closing down the schools it targeted at the end of this school year.

If you want to know why Johnny can't read, it's because CPS officials don't know how to maintain a sensible budget.