|
 Illinois Governor Bruce Rauner launched a probe of the nation's
third-largest school system in February, contending it could lead to
state oversight and a suspension of borrowing at debt-dependent,
"junk"-rated Chicago Public Schools (CPS).
However, the report from state school Superintendent Tony Smith,
posted on the board's website ahead of a monthly meeting scheduled
for Wednesday, said CPS does not meet "any of the criteria" to be
certified in financial difficulty.
"The district has not realized two consecutive years of negative
operating fund balances nor is it forecasted in this model," the
report stated.
It noted that negative operating balances are possible in fiscal
2018 and 2019.
 "It's clear in our analysis CPS has financial challenges and a
spending problem," state board spokeswoman Laine Evans said on
Friday. "However, at this time they do not meet the criteria for
certification of financial difficulty, as defined per statute. ISBE
will continue to monitor the situation and the district’s finances.
The state education board's recommendation undercuts a series of
strident remarks made by Republican Rauner in January and February,
asserting at one point the school system faced a "financial
disaster" that would prevent it from remaining solvent through the
end of its fiscal year in June.
The staff report also comes as Illinois remains in a crippling
11-month budget deadlock between Rauner and Democrats who control
the state legislature. The impasse has hit the state's higher
education and social service systems particularly hard. Illinois is
the only U.S. state without a full operating budget.
Rauner's office continued to insist on Friday that CPS is in a
financial mess.
"You don't need an actuary or an accountant to know CPS has
financial problems, otherwise the district wouldn't be repeatedly
asking the state for an additional half a billion dollars. It's
clear the district is in financial distress," said Rauner
spokeswoman Catherine Kelly in a statement.
CPS said the report vindicated the district.
[to top of second column] |
"This decision demonstrates that Governor Rauner's attempts to drive
CPS into bankruptcy are misguided and wrong. While CPS faces a $1
billion budget deficit next year, it can be solved if we all work
together, as we are committed to doing," said a statement from CPS
spokeswoman Emily Bittner.
The deficit is mostly due to escalating annual pension payments that
will reach $676 million this fiscal year, which ends June 30. The
district's efforts to gain an additional $480 million in state
dollars to pay its pension bill became entangled in the ongoing
impasse between Rauner and Democrats.
CPS officials, who have maintained the district is exempt under
Illinois law from state oversight, are calling for a revamp of the
state school funding formula to ensure poor children are not
short-changed.
The decision not to declare the district in financial difficulty
could suggest recognition by the Rauner-appointed state school board
that it lacked proper legal footing to take over CPS in the first
place, a Democratic legislative source said.
In April, Democratic Attorney General Lisa Madigan issued an opinion
that the state lacks the authority to take control of the school
system’s finances, including its ability to borrow to help fund
operational costs.
(Editing by Matthew Lewis)
[© 2016 Thomson Reuters. All rights
reserved.]
Copyright 2016 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
 |
