Story by Phoebe TollefsonProduced by Jin Wu/Lee Won Park
In May, Moody’s Investor Service downgraded Chicago Public Schools bond rating to junk status. This will mean higher interest rates to borrow money and could trigger penalty fees.
In the early 2000s, CPS used a high-risk financing scheme, auctioning off debt and pairing it with derivative contracts to try to cut costs. An analysis by the Chicago Tribune found the efforts backfired and will cost the district an added $100 million.
Woes from the 2012 teachers strike may loom again this September. Contract talks are rumored to be breaking down. The Board of Education has asked teachers to take a 7 percent pay cut, which they refuse.
Barbara Byrd-Bennett, the CEO of Chicago Public Schools, has resigned. Byrd-Bennett is under federal investigation for a $20.5 million no-bid contract to a company called SUPES Academy to train school administrators. Byrd-Bennett worked for the company immediately before coming TO CPS.
What’s going on in the minds of parents and community leaders amid all this chaos?
Ella Nevels, whose granddaughter attends Illinois Institute of Technology Math and Science Academy in Bronzeville, is dismayed at the SUPES Academy contract.
“To me, it’s just saying they don’t value a public education anymore,” said Nevels, a parent leader at her granddaughters’ schools. “You give one company the money you said you didn’t have anyway to keep the schools open,” she said, of the 50 school closures from 2013. “When I look at it, it’s corporate America taking over public schools.”
Other parents are anxious to see how the recent downgrade of CPS debt will affect next year’s school budget.
“We’ve had discussions like every other school,” said Gaute Grindheim, a parent elected to serve on the local school council at Walter Payton Prep High School on the Near North Side. “We assume there will be impact. We just don’t know how much.”
One of the worst scenarios, Grindheim and others on the Payton council agree, would be to cut the teaching staff.
“That’s our biggest fear,” Grindheim said. “We’ve already lost positions the past two years.”
Jeanne Lamar, another parent who serves on the Payton High School council, said she was prepared for another rocky period in the schools.
"All arrows point to a year that's going to be at least as difficult [as 2012],” Lamar said. She hoped the rumored breakdown in teacher contract negotiations would turn a corner and steer the district away from another strike this fall.
Will belt-tightening at CPS put more pressure on parents to come up with outside funding for programs the district cannot afford? Lamar said this is unfair.
"Parents in Chicago Public Schools -- we don't have the money to fill this hole. That's where our taxes were supposed to have gone. Years and years of political negotiations and short sighted deals have gotten us here."
A bill that would shift an estimated $160 million to $180 million from the Chicago Public Schools operating budget into the Chicago Teachers’ Pension Fund is sitting in the state Senate awaiting action when the session reconvenes June 9.
Since the General Assembly passed a law in 1995 to divert money from the pension fund into the school district’s operating budget, approximately $2 billion have bypassed the fund in favor of other school district expenses such as equipment purchases and teacher pay, according to a CTPF press release.
The law, HB 3695, would reverse the action taken in 1995 by reestablishing the pension fund – not the school district – as the recipient of certain tax money. The bill would not directly raise taxes.
Governor Bruce Rauner’s office declined to respond about whether or not he’d sign the bill into law if the Senate passes it. CPS officials did not respond to requests for comments.