It’s what Detroit did with its school district when the city went bankrupt. It’s a time-honored method used in the private sector for dealing with broke entities, including General Motors and Chrysler which used it successfully in 2009 to turn around.
Reconstitute the Chicago school district. Shut down the old entity and start anew. Transfer the assets you want to keep to a newly created district. Rehire the good employees. Assign the contracts you want to keep to the new entity. Leave the old entity with the debts you can’t pay and the problems you can’t fix, and let it disappear.
It could solve most all the problems facing CPS including its junk bond rating, doomed pension and, most importantly, it could end the Chicago Teachers Union.
We’ve laid out earlier how it might work in more detail. We first wrote about the option in 2015. The Wall Street Journal wrote later about its application in Detroit’s schools and its potential for Chicago: “The district would avoid declaring bankruptcy by using an ‘oldco/newco’ model similar to GM’s. School operations would be transferred to a new debt-free district.”
But then, as now, there is no political will to face reality and consider it. Legislation authorizing it would have to come from the state, but lawmakers remain in denial of the severity of the problems at CPS and across most of the state.
Instead, we have Chicago Mayor Lori Lightfoot blaming the CPS impasse with CTU on Donald Trump. We have the General Assembly cancelling most of its upcoming session, just as it did for last spring’s session.
They just don’t have the guts to face up to our problems. Like everything else, real reforms like reconstituting CPS won’t happen until a full meltdown forces politicians to acknowledge what is already staring them in their faces.
They just don’t have the guts.
-Mark Glennon
Expect no retraction or apology. This what they do.
The state’s existing buyout program for its own pensions is the precedent for Chicago, which should be a warning: Look out for similar exaggerated claims and shoddy analysis.
It’s fun to see references to articles from 5 years ago where I can read my old comments. Too bad the link to the CPS “Free Lunch” report from the senate GOP is dead.
I would guess CTU would still exist after such a restructuring and just re-brand themselves as a new AFT affiliate. Would be a good opportunity for members to purge their leadership though.
Joe Biden will sign off on a huge federal taxpayer bailout for poorly managed Blue States. That was the plan all along with politicizing the pandemic and crushing the economy – Get rid of Orange Man at all costs, then a bailout for payback. Families, small businesses, and kids were just casualties in a zero sum political game for Pritzker, Democrats and their minions the public employee unions, and MSM. Illinois is unfixable.
It’s fixable but it might require a little excercising that second amendment as intended
That would obviously be a major piece of state legislation. The Mayor and City Council don’t have the authority. So until House and Senate members who represent Chicago in Springfield start putting pressure on their leadership and the Gov, nothing will happen. Plus, Lori and her team have already demonstrated that they are inept in Springfield, so dont count on her to put together a plan like this or know how to execute someone else’s.
It’s not that the politicians (Illinois Democrats) don’t have the guts to face the problems, it’s that they are complicit in causing and profiting from those problems and frankly I don’t think they will even care if a meltdown happens. I also don’t think a meltdown will cause voters in this state to vote differently. The slow motion train wreck has been happening for years and this state still votes 60/40 for Democrats. Even the progressive income tax was a very narrow defeat which I think is an anomaly.