Chicago schools seek immediate halt to 'discriminatory' state funding

[February 28, 2017]  CHICAGO (Reuters) - The cash-strapped Chicago Public Schools (CPS) asked a state court on Monday to order an immediate halt to what it called Illinois' practice of monetarily discriminating against the city's students.

The nation's third-largest public school system sued Illinois officials on Feb. 14, claiming the state's method of education funding discriminates against its largely black and Hispanic student body in violation of the state's Civil Rights Act.

On Monday, CPS asked a Cook County Circuit Court judge for a preliminary injunction immediately barring Illinois from funding CPS differently than "predominantly white school districts in the rest of the state." It also requested an expedited schedule that would have the court rule on the matter no later than the week of April 24.

CPS warned it could be forced to end the school year on June 1 instead of June 20 and cancel some summer school programs as it deals with a lingering $129 million deficit in its $5.41 billion budget and a looming $721 million pension payment. Unlike all other Illinois public school districts, which participate in a teachers retirement system heavily subsidized by the state, CPS maintains its own pension fund for educators.

"This fiscal year alone, the state’s discriminatory funding has shortchanged CPS and its students by approximately $500 million," the district's court filing said.

CPS also warned that a balanced budget "is essential to allow CPS access to the capital markets to continue to borrow massive amounts of money to fund CPS’s cash flow."

The district expected that borrowing, which includes money needed to make its pension payment, to total $1.55 billion in the fiscal year that ends June 30, up from $1.1 billion in fiscal 2016. Debt dependency, drained reserves and escalating pension payments have pounded CPS' credit ratings deep into the junk category.

Illinois Governor Bruce Rauner's veto in December of $215 million in one-time funding for teacher pensions blew a hole in CPS' fiscal 2017 budget, which the district has partially filled with spending cuts and unpaid furlough days for teachers.

The state's Education Secretary Beth Purvis, issued a statement on Monday urging CPS Chief Executive Forrest Claypool to pitch in to help Illinois pass a balanced budget that addresses "a broken school funding formula."

Illinois is limping through a record-breaking second-straight fiscal year without a complete budget due to an impasse between the Republican governor and Democrats who control the legislature.

(Reporting By Karen Pierog; Editing by Jonathan Oatis)

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