Emanuel Proposes Possible Solutions to Clean Up CPS Budget Crisis

Chicago school and city officials detailed $200 million in cuts — including layoffs, scaled-back maintenance and reduced transportation — to the nation's third-largest school district Wednesday, one day after the district paid a $634 million pension bill officials said it couldn't afford.

Mayor Rahm Emanuel said schools would still open on time in the coming school year and class sizes wouldn't be affected. He put the blame on state legislators for worsening the situation and said a property tax increase was up for consideration.

The district had to borrow and factor in the cuts to make the pension payment by Tuesday's deadline because legislators, deadlocked over a state budget themselves, rejected a proposal calling for an extension to give school officials more time to come up with a longer term solution.

The district will eliminate 1,400 jobs — including 350 vacant positions to go unfilled — but few teachers will be impacted, with layoff notices going out to support and central office staff, Chicago Public Schools Interim CEO Jesse Ruiz said. However, the cuts will affect new teacher development programs, startup funding for new charter and alternative schools and elementary school sports teams and coaches. The district will also reduce funds for transportation, facility repair and maintenance.

"They're intolerable. They're unacceptable. And they're totally unconscionable," Emanuel said of the cuts, and warned of more cuts without help from legislators, who must approve changes to pensions. "They are the result of a political system that sprung a leak and now is a geyser."

Chicago has the worst-funded public pension systems of any major U.S. city, a problem that's snowballed over decades because previous city leaders didn't make big enough contributions to retirement funds for police, firefighters, teachers and laborers. Emanuel, who wants to overhaul how pension funds are distributed statewide, asked the Illinois Legislature for a 40-day delay on the pension payment, saying it would provide breathing room. But the House voted down that plan last week and there wasn't enough support for another vote Tuesday.

Emanuel said he was ready to discuss a larger solution, floating ideas like a renewed property tax levy, increased teacher contributions, shifting more costs to the state and combining the Chicago teachers' retirement with the fund for teachers in the rest of Illinois.

Also Wednesday, Chicago's Chief Financial Officer Carole Brown asked to borrow $500 million from the pension fund for 2016, when Chicago is set to change from lump-sum to monthly pension payments.

A state Senate committee did approve a bill Wednesday that contains some of Emanuel's ideas for pension relief, but the measure also contains a two-year property tax freeze. Emanuel, who said lawmakers should "get off their duffs," said it wasn't a complete solution on its own.

House Speaker Michael Madigan's spokesman Steve Brown said the speaker has been working on the issue for years. Senate President John Cullerton's spokeswoman Rikeesha Phelon said Cullerton is in contact with Emanuel on pensions and some of the conversations were reflected in the bill OK'd by the Senate panel.

Word of the cuts triggered fresh concerns for teachers and students still reeling from school closures approved in 2013. The cuts could further exacerbate the icy relationship with the Chicago Teachers Union, which has argued that the district has actually beefed up spending in certain areas. The union, which went on strike in 2012 for the first time in 25 years, recently walked away from the bargaining table after union officials said they were close to a deal.

"While much remains unclear," CTU Vice President Jesse Sharkey said at a news conference, "it is clear that what cuts have been specified would do real damage to our schools."

Copyright AP - Associated Press
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