Aug. 11--After postponing their budget for weeks in the hope that Springfield would fortify it with a massive bailout, Chicago Public Schools officials have finally coughed up a plan. On Monday, CPS proposed a budget for the upcoming school year that counts on $255 million in borrowing and $480 million from the legislature to help cover a $5.7 billion spending plan.
The budget will go to the school board in a little more than two weeks, with little hope that the legislature will have delivered relief by then.
So it appears Chicago schools will open next month on a wing and a prayer.
We'd say that this was courting financial disaster, if CPS weren't already a financial disaster. Its debt securities are rated as junk. The cost to taxpayers of even more borrowing will be frighteningly high.
The district's existing debt already strains its budget. CPS would be on the hook to make about $300 million in debt payments in the next year -- every dime of that would go to creditors instead of kids -- except it plans to postpone most of those debt payments by ... borrowing more millions.
And that bet on the friendly folks in the legislature? Mostly, CPS is counting on the legislature to postpone a whopping payment to the teachers pension plan -- yes, more delays in a financial obligation. See a pattern here?
If Springfield doesn't come through, schools CEO Forrest Claypool said again on Monday, the school system will have to resort to still more borrowing, and on spending cuts that will hit the classroom -- more teacher layoffs and more kids packed into each classroom. Details to come -- later.
CPS announced 479 teacher layoffs on Monday, though many of those teachers will likely be rehired to fill vacancies elsewhere in the school system. CPS will raise $80 million more from property taxes, hopes to tap $62 million in tax increment financing surplus funds and will count $75 million in reserves.
We'll credit Claypool, who is brand new on the job, for a few things.
The operating budget for next year is $68 million lower than the budget for the last school year. Claypool is producing $200 million in administrative cuts, including the elimination of some high-salary, what-the-heck-is-that? jobs. (Case in point: Somehow, CPS will get by without a $165,000-a-year chief innovation and incubation officer.)
"We are buying time," Claypool said Monday in a meeting with the Tribune Editorial Board. "Ultimately, our goal is to have a balanced, stable budget."
Based on his track record at the Chicago Transit Authority and Chicago Park District, it's likely that, given time, Claypool will find more nonessential spending.
And there is even reason to think Springfield will eventually come through with some help. Republican Gov. Bruce Rauner and Democratic leaders seem in general agreement that some kind of help should come. They're no closer to agreeing on how to do it.
But even if Springfield delivered a half-billion dollars in relief, CPS would still be counting on a quarter-billion dollars in new borrowing schemes to limp through the coming school year. Kids, don't try this at home.
The longer CPS defers, the greater the cost to taxpayers of the ultimate reckoning. The more CPS borrows to scoop and toss old debt, the more money it has to divert away from educating children in the future.
On a wing and a prayer -- it's a World War II reference to a heroic effort to bring a damaged plane back safely.
Eventually, though, a pilot had to land the plane.
