By: Ted Dabrowski and John Klingner
Chicago Mayor Brandon Johnson is catching a lot of flack for demanding that Chicago Public Schools borrow hundreds of millions to pay for a hole in the budget and the coming raises of his fellow Chicago Teachers Union members.
CPS faces a minimum $500 million deficit in the coming year and it’s expected to get even bigger once a new teachers contract is negotiated. CPS is stretched thin now that federal covid funds are running out, but rather than cut costs, Johnson wants to tap the bond market for $300 million and push the school district deeper into debt.
Did Johnson’s closest advisors forget to tell him that CPS is already junk rated, the only one among the nation’s 15 largest school districts? Or that CPS has nearly $10 billion in outstanding debt and another $16 billion in pension debts? Adding more debt to a school district with declining enrollment, bloated staffing, and hundreds of half-empty schools would be yet another blunder.
Even Johnson’s own school board agrees that borrowing is too costly and it is resisting Johnson’s demands to tap the bond market. The latest news from Chalkbeat says officials still plan on closing the $500 million gap via administrative spending cuts, staff reductions, debt restructuring, and leaving vacancies unfilled.
Another major point of contention in the budget is which government entity will be responsible for paying the pension costs of non-teaching CPS workers. The city used to pay those costs (about $175 million a year) until Mayor Lori Lightfoot changed the rules and pushed the payments to the school district. The unions now want that decision reversed.
If Johnson keeps the costs at CPS, he’ll upset his CTU allies who have decried the expense. But absorbing the costs at the city level means even more stress for Johnson and the city, which has a major deficit of its own and a credit rating that’s just one notch above junk.
Even Detroit, which went deep into junk territory after it entered into bankruptcy eleven years ago, now has a higher rating than Chicago.
Johnson is left with no good options for CPS, especially since he pledged to not raise property taxes on Chicagoans. He also seems to have little support for other forms of tax hikes, meaning he’s got little room to maneuver. And Johnson’s also been rebuffed publicly by Gov. J.B. Pritzker in his demand for more than $1 billion from the state for CPS.
Watch for Johnson to get increasingly squeezed as the federal covid money finally runs out and pension costs continue to rear their ugly head.
Read more from Wirepoints:
- Chicago’s Southland residents are irate about their property tax hikes. Wait till they see how their money is being spent.
- Chicago’s worst-in-nation pension crisis strikes again
- New property tax study: Chicago’s commercial property tax rates dwarf those of other major cities
- If you’re shot, robbed or assaulted in Chicago, there’s a 50/50 chance there’ll be no police to respond to your 911 call
Audio and summary 
If this bill passes, say goodbye to local control over all Illinois parks and expect to see open drug and alcohol use, needles, no sanitation and fire hazards, but no ordinary park users.
Borrow away. Our money is becoming worthless. At the fed level debt is increasing at an accelerating rate of 1 trillion dollars every 100 days. The world is unloading it’s holding of treasury notes. BRICS is paving the way to replace the dollar globally. Countries all over no longer trust the dollar, as they watch every president in the last 20 years impose sanctions. Why should the Saudis sell us valuable oil wealth in exchange for money we printed yesterday? Illinois is just following the crowd. Money grows on trees. Until it doesn’t. At that point they come after your… Read more »
To a Democrat success is not measured by results, it is measured by how much of the taxpayers money they can spend.
Hmm … interesting metric that explains much! Yes, they do seem to pat themselves on the back after pushing through huge-cost, unnecessary projects such as creating new offices where none are needed. Here’s an idea: include the work under existing offices where the workers are under-worked.
Don’t give Chicago all the headlines because we downstaters have them too. Why just the other day an article here regarding taxes referred to Madison Illinois. Madison, a part of the St Louis Metro region, High School had a 0% Math proficiency rating and a 3 % reading proficiency rating according to US News and world Report’s school rankings. It’s not just Chicago but rather the whole State that is in a mess.
Nobody forgot to tell Conehead. He’s just too dumb to understand it. He’s a typical democrat that just thinks he can pick more money off the money tree.
You’re the money tree and he’s going to pluck you.
CPS already has an easy source of funding. Close the schools with less than 100 students. Frederick Douglass Academy High School has 33 students. Simpson Academy High School for Young Women has 27. Simpson cost per student is $94,000. Will they ever realize this is unsustainable?
but but but what about all those union member’s jobs!!!!!!
Somebody forgot to tell Mayor Johnson that blaming all your idiotic decisions on Trump, climate change, your predecessors and Richard Nixon is no way to run a city.
Weak people take no responsibility for their actions; blaming others for their failings.
Maybe now that the covid money is drying up, Chicago and Illinois can finally begin the end game where it becomes increasingly difficult to pay for just about everything. Start expecting delayed maintenance, decreased services, higher taxes and new taxes. It would be wise for all the Dem political opposition to just get out of the way and let the Dems own it. Anyone that thinks now is the time to stay and fight the progressives is deluded. The time to fight will come when the city and state hit rock bottom…. when talk of bailouts and bankruptcy dominate the… Read more »
HALF OF MY TAXES GO TO SCHOOLS IN CHICAGO THAT GRADUATE BLOOMING IDIOTS
Does that make you part of the problem… paying for incompetence? I wrestled with that thought for years before I left both Chicago and Illinois. I decided I was part of the problem.
If you are using credit cards to pay the minimum balance on other credit cards you don’t really care about the interest rate. Remember the motto of JB and his greedy parasitic CTU puppet masters “First let’s get the Money”. That’s still their plan. The idea that CPS will certainly financially collapse and end their gravy train of grift is incomprehensible to these leeches.
I love watching Chicago Dems that have no clue. Everything they do just makes the situation worse, and then the voters either reelect them or opt for someone even more clueless. When your safe distance away in a red state, Chicago and Illinois politics is great entertainment.
Why not borrow the money? It is not like they will ever pay it back. They are already bankrupt for all practical purposes. So, if anyone is DUMB enough to lend the CPS money take all you can. What they have done should be considered criminal but in the public arena it is business as usual.
…and who cares what the interest rate will be if you have no intention of paying it back.
You should. Bankers are not dumb. If the loan is a Tax Anticipation Note (TAN) the tax payers are legally on the hook.
Did they forget to tell him? They might actually not have known. If you look at his crack team of financial advisors (just like his A Team that went to Springfield at the eleventh hour last spring and got stiff armed) they are a bunch of inexperienced lightweights. Look at their resumes. Their $100k a year jobs are the biggest paydays they will ever have in their lives since they are totally ignorant on financial matters and unemployable in the private sector. I’ll bet there isn’t a single one of them that could have an intelligent conversation about ratings on… Read more »
That’s just funny – right there. Sure, lets go get a loan and sell some bonds for Junk rated organizations with no financial credibility…that’s the ticket. Agree with TR below – Pinhead wouldn’t even know what that means…
I’m surprised any institution would lend Chicago money to pay for raises. In the old days you had to pony up collateral and shownl how you’d pay it back and then some.
Would Conehead the Mayorbarian even know what ‘Junk Status’ Means?
The Chicago Teachers Union, the Illinois Federation of Teachers and the American Federation of Teachers spent $2.0 to $2.5 million of teacher union dues to get their own lobbyist Brandon Johnson elected. He has no background or experience in running the third largest city in the US yet the taxpayers of Chicago elected him. By his own admission he is overwhelmed just being a Husband to a Black woman and 3 Black children. NOW THE TEACHERS UNION OWNS CITY HALL AND THE RESIDENTS OWN THE PROBLEM. The Democrats liberal policies and financial ineptness have destroyed the City and the State… Read more »
Yes the “residents own the issue” that they chose to vote for or voted for by not voting in an election. Now they can live with the choices that they have made and it is as simple as that. Illinois voters love to spend money particularly when it i s not theirs to spend.
The problem with letting the residents own the issue is that now this terrible issue exists at all, and the residents never ever come around to taking any responsibility for it. Stupid people make stupid decisions and collectively they make even dumber ones. If the state of Illinois really cared about these children, the state would put into receivership the worst districts and enact turnaround measures. But they don’t care, because they all vote Democrat, and that’s just how it is. Democracy at the end of the day is just a reflection of how people want to live.
Just think the founder’s just may have anticipated our current situation a check and balance of only allowing landowners to vote. Regardless of one’s opinions of whom should and shouldn’t vote that is the way the founder’s put it and I have a strong feeling things would be a lot different if the founder’s still had their way.
Chicago is a Democrat politicians dream constituency. You can rape an underage teenager, go to prison and run for office when you get out and get your office back.
CPS faces almost insurmountable issues. It lacks skilled leaders that are capable of executing critical course corrections, it must deal with union leadership that is morally bankrupt and unintelligent, it has a workforce (teachers) that deliver unbelievably poor results and the customer base (parents and taxpayers) are fed up paying high taxes for garbage results. Get ready for more of the same. The idiots in charge are incapable of meeting the challenges.
The irony is that these are the people teaching future voters continuing the insanity in perpetuity.
only complete ignoramuses trust Democrats will be fiscally responsible.