Chicago Public Schools (CPS) are facing a $480 million budget shortfall, a fiscal crisis that the state’s leading Republicans say demands an overhaul of the current system—not a bailout of CPS at the expense of taxpayers in suburban and downstate communities. Republican legislative leaders introduced a proposal on Jan. 20 that allows for the creation of an independent authority to assume control over the school district that is calling on state taxpayers to pay for its $480 million shortfall.
The proposal offered by Republican leaders is consistent with current state law governing all other school districts in Illinois, which allows the State Board of Education to remove the current CPS Board of Education and establish an independent authority to run the district. The independent authority would run the district until the State Board of Education determines that CPS is no longer in financial difficulty. The legislation makes it clear the state is not liable for the school district’s debt.
Despite a substantial financial advantage of about $600 million dollars in state funding, Chicago Public Schools and its leadership—buoyed by years of support from the state’s Democrat legislative majority—have dug a financial hole for the district that isn’t easily overcome. In response, CPS hopes to rely on long-term bonds to pay for hundreds of millions of dollars in short-term operating expenses, a response Republican leaders say is no solution to the district’s fiscal woes.
Republican leaders are also considering giving Chicago the financial tools to declare bankruptcy, if necessary, and to give CPS the power of bankruptcy protection as well. Two dozen other states have enabled struggling municipalities to file for bankruptcy.