• Chicago Schools Demand $500 Million Bailout From State

    Chicago’s public schools have released a budget that relies on nearly $500 million in funding the state has not yet voted to provide. The official budget essentially demands that the state hand over money or risk throwing the school district into chaos. Even Chicago’s teacher union is critical of the move.

    With a total budget of $5.7 billion, the $480 million Chicago Public Schools (CPS) expects the state to provide is more than 8 percent of their budget. The money is needed to fulfill pension obligations the city has to current and retired teachers. If the money isn’t forthcoming by the end of the year, the district says it will have to lay off thousands of current teachers to meet those pension obligations. (RELATED: Chicago Fires 1400 Teachers To Fund Extravagant Pensions)

    The district is already preparing itself for the blow, as Monday’s budget also came with an announcement of over 400 layoffs. Chicago’s schools have repeatedly had to shed jobs the last few years as they descend further and further into a pension-induced budget crisis.

    While CPS is looking to the state government to bail it out, it may not want to hold its breath. Illinois’ Republican governor, Bruce Rauner, says that Chicago’s pension crisis is the fault of the Chicago Teachers Union (CTU) and the “dictatorial” power they wield. Rauner said CTU needs to bear the burden of a fiscal crunch they created and that it isn’t the government’s job to swoop in to the rescue.

    “The power of the Chicago Teachers Union is overwhelming,” Rauner said in a press conference Monday. “Chicago has given and given and given. It’s created the financial crisis that the Chicago schools face now.”

    Rauner wants to alter Illinois state law to give cities most power to determine what is collectively bargained and what isn’t, with an eye towards rolling back the generous benefits Chicago teachers have that have helped create the crisis. Rauner says that providing a financial bailout to CPS would be contingent on making such long-term reforms, but the Democrat-controlled legislature has refused to budge on the issue.

    CPS leaders, meanwhile, have proposed reducing their budget gap by making teachers finance their own pension contributions. Currently, the government puts an equivalent of 7 percent of teachers’ salary into pension plans; CPS head Forrest Claypool has proposed taking some or all of this 7 percent out of teachers’ current salaries instead.

    Teachers, led by CTU president Karen Lewis, have blasted this proposal as a massive pay cut and on Monday warned they would likely strike if the city tried to implement it.

    “If they insist on a 7 percent all at once like a pay cut — a 7 percent pay cut — I don’t have to call for a strike,” Lewis said in a press conference Monday. “I think our members will do that themselves.”

    Lewis was also critical of CPS for its budgetary jujitsu, saying it was relying on funds that “aren’t really there.”

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