Mayor Rahm Emanuel and Chicago Public Schools CEO Forrest Claypool went back on their threat to close schools three weeks early, despite needing around $100 million to stay open.
But what will the rescue package look like?
It’s still the unanswered question, even though the mayor’s proclamation to the kids, teachers and students is this: “You worry about class – it will stay open until the natural end of the school year June 22. We’ll worry about exactly how.”
Either way, the city will have to come to the aid of the financially troubled school district, and a final package will include some form of more cuts and intergovernmental borrowing. Tuesday, Emanuel said his team is still working on that, but pointed the blame for the deteriorated condition squarely on the state.
“CPS is working through different ways to find the resources for the challenges they have financially, and we’re going to work with them and I’ll come back to you when we have more answers,” Emanuel said. “There is irreparable damage being done by the lack of funding from the state.”
What’s been talked about by some aldermen briefed in the last few weeks by the city is an arrangement where the city will lend CPS money out of Tax Increment Financing accounts. These are the controversial funds that come from property taxes that the mayor and aldermen use to pay for economic development and other projects. The intent would be that the money would have to be paid back to the city eventually, adding to the CPS debt burden, and it could be a potentially high cost.
“You still have to charge interest, or else it’s not considered a loan,” said Ald. George Cardenas. “Whatever that interest is, it would be above what the banks would charge to be able to borrow those funds.”
Cardenas says the city might also transfer money outright to CPS, noting the lack of snow this winter.
“We had a mild winter, we had some funds there that we didn’t spend,” Cardenas said. “Knowing that the treasurer has some possible funds, it gives us some flexibility in our options.”
CPS on Friday was not successful in its court bid for injunctive relief from the state. CPS had argued that the funding model the state used to award money to the district was racist and discriminatory. Despite the court loss the judge did say the state education funding model is broken and left the door open for the city to bring a different complaint against the state.
Either way, it looks like even a successful ruling wouldn’t have given CPS the money it needed to stay open the rest of the year
Follow Paris Schutz on Twitter: @paschutz
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