When considering the proposal to push Chicago Public Schools into receivership put forth by Illinois GOP legislative leaders yesterday morning, only one thing matters: The Illinois Senate President and Illinois House Speaker, both Democrats, control whether or not the bill will get to a vote.
According to a tweet from Reuters’ Dave McKinney, Senate President John Cullerton said of the proposal, “Not going to happen. It’s mean spirited and evidence of their total lack of knowledge of,” CPS’ problems.
So the proposal, which would place CPS under control of a state oversight board, is dead on arrival. Meaning, a continuation of the status quo.
However, yesterday’s GOP legislative leaders’ proposal did make clear one thing: Chicago Public Schools’ financial crisis is no longer something state leadership is interested in solving any time soon. It is a political chit to be used in the larger battle: resolving the CPS financial crisis through Gov. Bruce Rauner’s Turnaround Agenda, which includes eliminating collective bargaining by government employees, including teachers.
When asked during yesterday’s press conference if the state oversight board proposal was linked to Rauner’s Turnaround Agenda, GOP Senate Minority Leader Christine Radogno said, “Yes, it’s about helping the city and state, both.”
Considering that the CPS financial crisis impacts educating children in the City of Chicago, a basic government service, a statement by Radogno that the problem is somehow linked to state problems is perplexing. It can only be understood as a political statement.
The reasons for why CPS is funded partly by the state, and requires state funding to move forward every year, is complex and better explained at length elsewhere. But everyone of every political shade agrees: The system for funding schools in Chicago and Illinois is broken.
Yet, while CPS is experiencing a fiscal problem, Illinois is experiencing a political problem: No one group has enough political power to push through their solution for fixing CPS’ short-term and long-term funding solution. And so we are stuck with a status quo.
As Aldertrack’s Claudia Morell detailed Tuesday, next week’s CPS bond issue, while likely to be priced at usurious rates, will provide the school system with enough cash to get through to mid-February, when property tax revenue begins to be transferred from the Cook County Treasurer. After that, CPS will have enough cash on hand to muddle through to the end of the school year. Then, until classes begin in September, the school system’s cash needs are significantly lower.
Without state help, CPS has few options to solve its long-term financial problem. Its ability to raise property taxes is severely limited by a state cap.
One potential solution: CPS could get money from Chicago.
City Council members are pushing for Mayor Rahm Emanuel to declare a TIF surplus, an amount that is also under dispute. A Mayoral Budget Office spokesperson yesterday estimated this year’s surplus at around $90 million, while TIF surplus proponents are saying it’s closer to $400 million, maybe more than $700 million. A declared surplus would be divvied up by the same formula as property taxes in the city, so CPS would get $45 million 50% of that windfall. CPS needs close to $500 million to close their budget gap this year.
The City of Chicago could also directly transfer funds to CPS. While there are plenty of reasons this would be bad policy–the City of Chicago and CPS are two different entities, and therefore CPS should have to stand on its own–Chicago has home rule and the ability to raise as much taxes as it wants. Technically, Chicago could just raise property taxes and funnel the money to CPS, which is a suburban Republican’s dream: Make Chicago pay for everything on its own.
But last week Chicago CFO Carole Brown threw cold water on both of those possibilities when she told reporters, “The city has no plans to directly, financially assist CPS.”
So the problem is ultimately political, putting everything on the ballot booth for state legislators. The first test will be with the March 15 Democratic Primaries, when State Rep. Ken Dunkin will fight for his political life against challenger Juliana Stratton. Dunkin, you may recall, is a lynchpin vote for the Illinois House Democrats. With him, Democrats have a veto-proof majority (Senate Democrats also have one, but with less drama). Without Dunkin voting with Democrats, Gov. Rauner’s plans are potentially viable.
We’re told by sources that SEIU Illinois and the United Working Families labor umbrella group are going all out to defeat Dunkin this March. Meanwhile word on the street is that Dunkin’s original political sponsor, Secretary of State Jesse White, has abandoned him. Rauner and the pro-Rauner PAC Illinois GO could still jump in, but outside support doesn’t usually hit until the last three weeks before Election Day.
Then, in November we’ll likely see a battle royale for control of the Illinois legislature. Only about 30 House and Senate seats out of 158 will be seriously contested, but just two House seats and four Senate seats going Republican would break the Democratic veto-proof majority, giving Gov. Rauner and GOP leaders a fighting chance to pass at least some of their agenda.
So, November’s elections are what we’re really waiting for. That’s what Leader Christine Radogno was really saying in yesterday’s press conference.
Until then, Chicago Public Schools should expect to mire in a financial mess.