Mayor Emanuel To Reveal Bailout Plan To Aldermen Today
Mayor Rahm Emanuel plans to tell aldermen on Friday how he intends to solve Chicago Public Schools budget bind, but will not propose any new taxes as some progressive aldermen and the Chicago Teachers Union have urged, according to a city official.
CPS reportedly plans to rely on borrowing to make up for the cash the school system needs. A statement released by the mayor’s office says there’s been “many discussions with lending partners.”
City officials said no new tax could be approved and collected in time to help the school district out of its current crisis.
Emanuel has cancelled two previously scheduled aldermen briefings.
Questions about Emanuel’s financial rescue plan have been looming since he pledged three weeks ago to keep schools open through the end of the year, despite a $129 million budget hole. CPS needs that money to make a massive $716 million pension payment on June 30.
In addition to its budget hole, CPS also is owed $467 million by the state. It’s highly unlikely the state will pay up by June 30 due to the ongoing budget stalemate.
When Emanuel announced he was bailing out CPS, he put to rest the prospect raised by his hand-picked CEO Forrest Claypool of closing schools as many as 13 days early. That threat was meant to try to compel a judge to decide quickly on a school funding lawsuit filed by CPS against the state.
The lawsuit, which sought to get the state to pay more into CPS’ teachers pension fund, backfired. The judge dismissed the suit late last month.
CPS’ June 30 payment is the school district’s largest ever. One option is to ask the fund to accept a late payment, but the district has not publicly pursued that yet. CPS had asked to make a presentation before the pension board on Thursday but cancelled.
CPS and Emanuel’s office said, even with a bailout plan, they want to keep pressure on state lawmakers and Gov. Bruce Rauner to provide more money for the teachers’ pension and to pay what is owed to the district. The spring legislative session ends May 31.
Rauner’s office has said repeatedly that they don’t believe CPS’ crisis is due to the state budget impasse, instead blaming it on “decades of fiscal mismanagement.”