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CPS Could Still Close June 1 As TIF Funding Plan Goes Nowhere (For Now)

By Heather Cherone | April 18, 2017 1:09pm | Updated on April 18, 2017 2:58pm
 With Chicago schools on the brink of closing 20 days early unless officials find a way to bridge a massive budget gap, a measure that would use city funds to keep the lights on failed to advance Tuesday. 
With Chicago schools on the brink of closing 20 days early unless officials find a way to bridge a massive budget gap, a measure that would use city funds to keep the lights on failed to advance Tuesday. 
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DNAinfo Staff

CITY HALL — With Chicago schools on the brink of closing 20 days early unless officials find a way to bridge a massive budget gap, a measure that would use city funds to keep the lights on failed to advance Tuesday. 

Ald. Ed Burke (14th) said the measure crafted by Ald. George Cardenas (12th) had not been properly drafted to pass a legal test and would have to be reconsidered by the City Council's Finance Committee.

But that didn't stop the aldermen from debating the issue that drew dozens of members of community groups to City Hall to demand that the aldermen use tax increment financing funds to stop the schools from closing June 1 — a plan supported by Gov. Bruce Rauner that Mayor Rahm Emanuel reiterated again on Tuesday was dead in the water.

Using TIF fund is "not a long-term financial solution and does not come close to addressing CPS’ financial concerns," Emanuel said in a statement.

"Instead, we urge aldermen to push Governor Rauner to focus on fixing a discriminatory state funding formula that penalizes Chicago’s students,” said Molly Poppe, a spokeswoman for the mayor, referring to the fact that state funds pay for some of the costs for pensions for teachers outside of Chicago.

TIF districts capture all growth in the property tax base in a designated area for a set period of time, usually 20 years or more, and divert it into a special fund for projects designed to spur redevelopment and eradicate blight.

Chicago's TIF accounts have more than $1 billion in them.

Ald. Carlos Ramirez-Rosa (35th) called the financial crisis engulfing the Chicago Public Schools "utterly ridiculous."

"It is an embarrassment that there is not enough money to keep the lights on," said Rosa, who wants the City Council to impose a tax on corporations based on the number of workers they employ.

Ald. Harry Osterman (48th) said the uncertainty surrounding Chicago schools contributed to a 3.5 percent drop in the number of students enrollment this year compared with last, according to information provided by the district.

"We are at the tipping point," Osterman said. "We have to get this right."

School district lawyers are set to argue Wednesday morning before a Cook County court judge that the State of Illinois should be forced to give the district more money because the way schools are funded now violates the civil rights of Chicago children by giving their schools less money than schools outside of the city.

None of the aldermen expressed optimism that that lawsuit would be successful, nor did any one suggest state lawmakers — who have been embroiled in a two-year-long fight over the Illinois budget — will come to the rescue of Chicago schools.

Ald. Scott Waguespack (32nd) said he was tired of getting calls from residents of his ward demanding answers about whether schools will close June 1.

"People in this city need an answer," Waguespack said.

Several aldermen, including Waguespack, blasted Chicago Public Schools CEO Forrest Claypool for failing to attend Tuesday's hearing.

"CPS should come out of hiding," said Ald. Anthony Beale (9th.) "This is mind boggling."

Ald. John Arena (45th) said if schools closed 13 instructional days early, it would leave many Chicago students at risk.

"Our schools are sanctuaries and refuges," Arena said. "We have to do this now."

But other aldermen said it was unfair to ask city taxpayers to fill the hole created by the state's financial crisis.

"Robbing Peter to pay Paul is not the solution," Ald. Jason Ervin (28th) said.

The Chicago Teachers Union also has proposed using money from TIF districts — along with taxing corporations — to solve the school's fiscal crisis.

In October, Emanuel agreed to use $88 million from the city's TIF districts to avert a strike by the teachers union.

But Emanuel long has resisted using TIF funds to bolster the public schools budget, saying that it was inappropriate to use money from a one-time revenue source to pay for school operations.

"We can't subsidize the state's failure," 27th Ward Ald. Walter Burnett said, noting that he gave up $60 million in TIF funds earmarked for a new high school in his ward to avert the strike.

Burnett accused his colleagues of supporting using TIF money to avoid an early end to the school year to curry favor with the politically powerful teachers union.

"Let's do this rationally," Burnett said, adding that he uses funds from TIF districts in his ward to make critical improvements for residents. "This thing has to be balanced."

The fiscal crisis for CPS began in November, when Rauner vetoed a bill that would have given Chicago schools an additional $215 million to help cover CPS pension obligations.

Rauner blamed Illinois Senate President John Cullerton for violating a compromise signed last June that allowed schools to open in September. Part of that deal promised more money for Chicago schools in return for statewide "pension reform," a long-held goal of the governor.

But Rauner contends there was no reform, and in a message to legislators in December, he said he refused to sign a school-funding bill because it would amount to a "bailout" for CPS.

Cullerton denied breaking the agreement and said he was willing to continue working on pension reform with the governor.

CPS must pay its employees' pension fund $721 million by June 30.

CPS would save $91 million by closing schools June 1, as well as another $5 million by canceling summer school for all students except those in high school, officials said.

Even if the school district gets more funds from the state or the city, CPS will "have to borrow hundreds of millions" to pay its bills, officials said.

In January, Claypool ordered four unpaid furlough days for all CPS employees to save $35 million. He also canceled professional development events for CPS central office staff to save $5 million and slashed charter school budgets by $15 million by the end of the year, officials said.

In February, Claypool cut another $31 million by freezing a portion of schools' discretionary funds, which can be used to buy textbooks and technology and pay for after-school programs, field trips and hourly staff.

Those cuts have whittled the deficit to $129 million, officials said.