Rauner Suggests Bankruptcy Isn't A Bad Idea For CPS

By Jim Bochnowski in News on Apr 16, 2015 8:50PM

After his recent press tour talking up his economic agenda for Illinois and his pretty clear distaste for public sector unions, Bruce Rauner dipped his toes into the murky waters of the Chicago Public School system's finances, which has a projected budget deficit of $1.1 billion. Speaking at an event sponsored by the Chicago Public Education Fund earlier this week, Gov. Rauner suggested that CPS should declare bankruptcy, a move that would allow CPS to "restructure its debts and contracts" including the contentious issue of its teachers union contract. As the Sun-Times points out, the governor went on to stress the need to "hold teachers accountable" before refusing to answer followup questions from reporters on the scene.

Luckily, Mayor Emanuel threw cold water at the governor's plan, saying that it would not address the real issues that the CPS faces. Specifically, the Mayor believes that the issue of dual taxation, that residents of Chicago pay a state income tax that funds Illinois public schools as well as property taxes that fund CPS teachers and pensions, is the real issue in fixing CPS finances. He also fired back at the governor's anti-union rhetoric, saying clearly "as long as I'm mayor, Chicago will not be a right-to-work city."

Luckily, the State Board of Education has given the CPS a slight lifeline. As Gov. Rauner's budget contains a cut of 2.25% to education funding, which would be devastating to a cash-strapped district such as Chicago's, CPS will receive $33.3 million from a fund dedicated to helping out struggling schools. As a result, instead of facing a $35 million reduction in funding, CPS will instead only lose $1.7 million. Regardless, the Board of Education acknowledged that the "cuts are still painful because they come late in the school year and districts had little time to plan for them."

As the street fight between state and city government to move CPS into the black play out in public and in private, luckily, the two principle negotiators have a friendly relationship. As the Tribune so helpfully points out, "Emanuel and Rauner have vacationed together and have many wealthy campaign donors in common."