Chicago Public Schools financial crisis described as lesson not learned

Chicago Public Schools (CPS) should have already learned the lessons of poor financial management, Ted Dabrowski, vice president of policy at the Illinois Policy Institute, contended on a recent episode of “Illnois Rising.”

Dabrowski said the district’s current pension and funding crisis is strikingly similar to what happened 20 years ago under the tenure of then-Chicago Mayor Richard M. Daley.

“What we found out was that he [Daley] took all the money from the pensions – the pensions that were nearly fully funded – and he spent all that money and more,” Dabrowski said. “Then Rahm Emmanuel took over and caved to the unions over and over again. And now we have a school district that is bankrupt again. It’s got no reforms, no discipline, and it’s not just fiscally bankrupt, but it’s morally bankrupt. They’re asking for a bailout again just like the one they got 20 years ago.”

Dabrowski asserted that CPS’ pension crisis is a product of years of mismanagement.

“What’s amazing is that we did a study on this and [discovered that] they stopped funding the pensions for 10 years,” he said. “CPS hardly put anything – virtually nothing – into the pension plan, and they took all that money and gave bigger and bigger raises and just grew the monstrosity that is the CPS. In the end, they made Chicago teachers the highest paid in the nation when you compare them to the large districts in the nation. The pensions are now half-funded. The results are unfortunately very sad for the children that go there.”

Dabrowski’s comments reflect the crisis the entire state faces as it fights over education funding. While schools have started for the fall, Illinois does not have an education funding system in place. Senate Bill 1, which is required to provide the much-needed money to the state’s school districts, has faced delay after delay as lawmakers from both sides of the aisle butted heads over certain provisions in the bill. 

Republicans have called SB1 a Chicago bailout because of additions made at the last minute by Democrats that provide additional funding to CPS and its broken pension system.

Dabrowski contended that underlying those issues is a big problem that has yet to be addressed: where the money will come from.

“For this structure formula to work, it will need — in about a decade — it will need $6 billion more than what we have today,” he said. “So that means we are going to have massive tax hikes just to fund this evidence-based model. We’re talking about major tax hikes again, and it’s on a model that has been unproven and failed in many states. This evidence-based model has been rolled out in a few states, and it’s done nothing except spending more money.”

Gov. Bruce Rauner issued an amendatory veto on SB1 on Aug. 1, which was overridden by the Senate on Aug. 13. The House has yet to act on the override but is expected to vote on SB1 on Monday.

“Illinois Rising” is hosted by Dan Proft, who is a principal of Local Government Information Services (LGIS), which owns this publication.

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