Illinois GOP leaders propose CPS takeover, mull bankruptcy plan

By Harvard Zhang

With backing from Governor Bruce Rauner, Illinois Senate and House Republican leaders proposed Wednesday a state-created Independent Authority to assume control over the Chicago Public Schools system, along with legislation “giving Chicago the financial tool to declare bankruptcy, if necessary.”

The CPS and Democratic leaders promptly pushed back.

State Senate Republican Leader Christine Radogno of the 41st District and House Republican Leader Jim Durkin of the 82nd District said they’re drafting  bills authorizing the state takeover of the third largest school district in the U.S.

“This is a lifeline,” Senator Radogno said in a Wednesday morning press conference at the James R. Thompson Center in downtown Chicago. “The track record of Chicago and its public school system is abysmal. The result always ends up a plea for more state money for Chicago at the expense of school districts in our suburban and downstate communities. It has to stop.”

The proposal is not “a state bailout of CPS,” Rep. Durkin said. “Taxpayers statewide should not and will not be held responsible for historically bad decisions made by Chicago politicians.”

The legislative move came as the school district has been struggling with a series of financial challenges, layoffs and a potential teachers strike. The CPS is slated to issue $875 million of general obligation bonds next week despite dismal credit ratings.

Governor Bruce Rauner attacked Chicago Mayor Rahm Emanuel for not dealing with the school district problem, and pushed for the state takeover.

“There are a lot of legislators in both parties that know this is good policy and it’s the right thing to do,” the governor said Wednesday at Union Station, where he was making a blood donation.

Mayor Rahm Emanuel said the governor’s trying to distract people’s attention from the state’s budget deadlock.

“Giving control of our children’s future to a governor who can’t pass his own budget, who is racking up billions in unpaid bills, and who is crippling higher education across the state makes zero sense,” the mayor said in an email statement from Emanuel’s spokeswoman Kelley Quinn.

The Republican legislation would include the Chicago Public Schools in the Illinois State Board of Education District Intervention Law. A state-created Independent Authority would run the school system after the removal of the current CPS Board of Education.

The state-established Authority, according to the Republican leaders, cannot cancel or modify existing collective bargaining agreements. The state oversight body would continue to serve until the State Board of Education determines CPS is no longer in financial difficulty.

The Republican leaders also called for opening the door to Chapter 9, the federal bankruptcy proceeding that offers financially distressed municipalities protection from creditors. The bill to be introduced would specify that the state is not be liable for the school district’s debt.

“The state has to permit its municipalities to afford themselves of the opportunity to restructure their debt,” Illinois State Rep. Ron Sandack of 81st District said at the press conference.

The Republican leaders blamed their Democratic counterparts for a lack of action to change the status quo and their unwillingness to cooperate.

“They are not meeting in Springfield, They decide to cancel sessions and avoid any legislative meeting, so we have to take the action upon ourselves,” Durkin said. “They’re not willing to cooperate with the elected governor and the Republicans to seek a way through the impasse and give stability to the Chicago Public Schools.”

The proposed legislation “is not going to happen,” Sen. John Cullerton of Chicago, leader of the Senate’s lopsided Democratic majority, said in a statement. “It’s mean spirited and evidence of their total lack of knowledge of the real problem facing Chicago Public Schools. The unfair treatment of pension systems by the state is the immediate cause of CPS’ financial problem.”

The head of Chicago Public Schools said Governor Rauner and Republican leaders should fix the school funding system, not try to preserve the current system that systematically discriminate against Chicago children.

“Instead of offering a reckless smokescreen that distracts from the real financial problems facing CPS, the governor should pass a state budget that treats CPS students equally with the rest of the state,” Forrest Claypool, CEO of the CPS, said in an email statement.

Photo at top: Sen. Radogno, center, speaks at the Wednesday morning press conference. From left to right, Rep. Durkin, Sen. Radogno and Rep. Sandack. (Harvard Zhang/MEDILL)