Chicago Public Schools’ Debt Exceeds $17 Billion; Suburban Taxpayers Teed Up to Bail Them Out with SB 1

Rep. Jeanne Ives
WHEATON – Today, State Representative Jeanne Ives (R-Wheaton) called on Governor Rauner to veto SB1-- a bill that would reroute state school funds to pay down Chicago Public Schools’ massive debt, resulting in higher suburban property taxes -- as soon as it hits his desk. 

Ives stated, “This bill would enshrine into state law that suburban taxpayers bail out corrupt and mismanaged Chicago Public Schools (CPS) over the next generation.”

CPS holds $17,000,000,000+ in debt.

“They are a bloated, corrupt and mismanaged organization,” Ives said of CPS. “After CPS intentionally skipped pension payments for 10 years, it now owes $10 billion to current and future retirees. CPS has more than $7 billion in other debt at “junk” interest rates.”

Put in perspective, CPS has more than three times its total annual budget in debt.  It owes three times as much as the state will spend on public schools for all districts this year.

SB1 is purposely opaque

“It is legislation written by insiders and lobbyists -- not by legislators who represent taxpayers, parents and children,” said Ives.

By careful, intricate design, this bill cements preferential treatment for Chicago schools over all others in Illinois.

It requires non-Chicago taxpayers to bailout CPS’ insolvent pension fund-- to the extent that is even possible-- over the next 20-30 years, diverting billions from classroom instruction.

Presented as a “formula” that fairly distributes scarce state money to our state’s 800+ school districts serving nearly two million students, a closer look finds the equations are less math than typical Illinois politics.

SB1’s “formula” is purposely rigged to favor Chicago over all other districts.

“SB 1 is described using multiple spreadsheets with up to 89 columns attempt to cost out every expense in educating a public school student,” Ives said. “When I had more difficult questions, I was directed by our Republican staff and the Illinois State Board of Education staff to ask Michael Jacoby, Ralph Martire or Ben Moore - three unelected, politically-connected liberal lobbyists who are virtually unknown to Illinois families - to answer my questions, as they had written the new formula.”

“To be clear, three liberal political insiders concocted a scheme to bailout Chicago pensions on the backs of suburban school children.” 

$21,730 to educate a kindergartener?

This bill assigns to each district the degree to which they are “adequately funded.” 

SB1 measures education on inputs; school accountability is tracked based on education spending in the right buckets, not necessarily performance on state tests. 

“Expect superintendents to complain that according to the state they are not ‘adequately funded,’ and, therefore, should not be held accountable for improved results, said Ives. “They made a similar argument when the state prorated General State Aid (GSA) payments in the past.”

The bill expects $350 million in new education spending each year for the next 10 years, a total of $3.5 billion, but that number could increase to $6 billion – a 100% increase over last year’s GSA amount.

DuPage County and other suburban taxpayers will fund most of it.

“The new money from the recent 32% income tax increase will fund these increasing demands,” Ives said.  “Now we know that that tax increase, projected to take $557 million from DuPage County taxpayers, will go partly to CPS instead.”

“Finally, if we cannot agree there is something wrong with a bill that mandates taxpayers spend $21,730 to educate a kindergartner in West Chicago, then I don’t know what we can agree on.  Governor Rauner should veto this bill and start over.”

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