City Approves Massive $1 Billion CPS Borrowing Plan
By Jim Bochnowski in News on Jun 25, 2015 7:30PM
After being rebuffed in Springfield for help with the Chicago Public School system's monetary woes, the city approved a plan to borrow over $1 billion for the public schools.
On Wednesday, Chicago's Board of Education unanimously approved a plan to borrow $200 million to cover CPS bills through the end of June, as well as a new $935 million line of credit to take the school district through the upcoming school year, the Chicago Tribune reports.
However, the system still has looming financial issues. On Tuesday, the state legislature rejected a plan that would allow the city to postpone their contributions to the CPS pension systems until August, when the city's school system will receive regular financial assistance from the state. While the Tribune expects the legislature to take up a similar piece of legislation next week during the board meeting, CPS interim CEO Jesse Ruiz said, "Without the help of lawmakers in Springfield, we face the tough decision of paying our pension obligations or operating our schools."
School Board President David Vitale echoed this dour outlook:
"We obviously don't want to destroy the district. We don't want to lay off hundreds, if not thousands of people. But at the end of the day, that's what it comes to if we don't have another resolution."
While there were some initial worries that the state would not come to a budget agreement in time for regular payments to be made, on Wednesday Governor Rauner signed a bill that authorizes $7 billion in education spending, according to the Tribune. Keeping with Rauner's plan to cut state budget, however, the amount allotted to educational spending was well short of the amount the state is supposed to contribute to schools, according to the CEO of the Elgin School District Tony Sanders.
But ultimately, Sanders told reporters, "This will certainly help us in preparing for next year, knowing that the budget is set."
Chicago's public schools may not be so able to see the bright side yet.