CN June 25, 2015

At last night’s CPS meeting, the Board voted to borrow more than a billion dollars to keep the schools operating another year. But about 24 hours earlier pretty much nobody knew this was the plan. How did this happen?

“I don’t know,” says Sun-Times education reporter Lauren FitzPatrick.”In the sense that it was not discussed. It looks like it’s two chunks of borrowing – $200 million, andsome $935 million. But the Board of Education didn’t say a word about it other than to cast a unanimous vote at the end of the meeting to approve both pieces of borrowing.”

“Not even roll-call vote,” adds Sarah Karp, now an investigative reporter with the Better Government Association.

Despite Interim CEO Jesse Ruiz’s vow that he’d run a more transparent operation, there was no public involvement of any kind before the vote for this massive borrowing. “They did discuss a couple of other big items on the agenda,” says Fitzpatrick, “So I was waiting for the money people to come out and talk about the borrowing, but it just never happened.”

Any discussion that did occur at the Board level happened in a back room outside the public view. A day later there still aren’t any more details about the loan – how it will be structured, when it will take effect, or when the first checks will arrive. “There’s no real reason I can see why they would discuss this is executive session,” asserts Karp. “This is not real estate, or personnel…the public would like to know a little more about this. My grandkids are going to be paying for it.”

When we taped our discussion this morning there was optimism in the air that a new one-year placeholder contract was about to be drawn up between CPS and the CTU. But that was dashed a few hours later when the CTU published a statement that talks had broken off.

We asked how this deal would have been different from a one-year contract extension (provided for in the old, expiring contract) that both sides rejected at different times over the past few months.

“From the sound of it, this one-year deal that’s being talked about right now would not have included a pay raise,” explains Catalyst Chicago reporter Melissa Sanchez. “The previous one-year deal would have, if they had extended the contract. What they’re getting at the moment is that CPS has backed off of their desire to stop paying the seven percent of the nine-percent pension pickup. That’s what we’re hearing. So for the union, they’re at a standstill. They’re not losing. And it gives them time to rally their troops.”

Earlier this week, Mayor Emanuel said he had requested from Springfield a 40-day extension on the payment of about $635 million into the Chicago Teachers Pension Fund. But when the bill came before the House it fell well short of passage. It was mysterious. “Clearly CPS thought this was going to happen,’ explains Fitzpatrick, “because Jesse Ruiz, somebody packed him up into a car and he appeared before committees and the full House, and he was there to make his case and turned up in person. I can’t believe that if he thought this wasn’t going to happen, he’d have taken the time to go.”

It was widely believed that all the legislative leaders, the Governor, the Mayor and CPS were on board, and that the union and the pension fund were not in opposition. It seemed relatively non-controversial.

“The idea of the delay is that tax money will be coming in, in August,” says FitzPatrick, “which is not in their pockets now. And if they could have forty days then they would be able to make the full pension payment as opposed to no payment or even a partial payment which was getting batted around for a while.”

So what happened?

“I’ll tell you the gossip I’ve heard, which is unconfirmed, that  the Republicans were about to be able to take credit for solving the CPS problem. So if the deal, which was supposed to be a done deal, got pushed off, here comes Mike Madigan to the rescue a week later – and he gets to save the day, instead of the Republicans that were willing to cross the aisle in support of the 40-day delay.”

Some good news this week, though, was Governor Rauner’s announcement that he planned to sign that portion of the State budget that funds the schools. So, although almost everything else is still being debated, schools now know the size of the checks they’ll be receiving from Springfield in August.

And finally, the Ernst and Young report. It was commissioned by CPS presumably to show the public just how bad things are.

“While we’ve all been waiting for the latest trick, they came in and said, there kind of aren’t any,” FitzPatrick tells us. I think it’s page 24 of the report that lists all of the things that will pretty much all be needed to pull this off this year. Some are taxes, some is help from Springfield, some is classroom cuts. One of the other points that the report tried to make is that solving this problem can’t just come from CPS alone. That there are all these other people who are gonna have to sign off on a lot of these proposals to pull them off too. The State, the City Council, retirees, unions – CPS cannot get out of this on its own, Ernst and Young was paid to say.”

The CTU has said, and often repeated, that the financial mess was created by CPS, and that it’s “broke on purpose”. We ask if that’s a credible claim.

“I don’t think that they ever intended to go broke or spend themselves into oblivion,” Fitzpatrick explains. “But I think the union would argue that it’s a cute way of saying that they’re not acting as though they’re actually in financial crisis – that they’re spending on big-ticket items and things that are not working, like the Aramark contract for example, the SUPES contract, which has blown up in their faces, they continue to open new schools. They’re not acting like they’re broke, and that they’re digging themselves in even deeper.”

And after last night’s vote, about 1.1 billion dollars deeper.


About Ken

Ken's the host of Chicago Newsroom. A former news director, reporter and radio program host, he's also a past Vice President of the Chicago Headline Club.
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