Chicago Public Schools will eliminate 1,400 positions as the district cuts $200 million in spending amid a pension-driven crisis.
Mayor Rahm Emanuel on Wednesday called the cuts “intolerable” and “unacceptable” for the nation’s third-largest school system. Emanuel and interim schools Chief Executive Officer Jesse Ruiz announced them the day after the district used borrowed money to pay a $634 million pension bill. Making that payment worsened the system’s deficit and led the district to make the cuts.
Emanuel offered solutions for mounting pension costs, including a single fund for all Illinois teachers or reinstating a Chicago property tax. Earlier Wednesday, the district asked the teachers’ pension fund to push $496 million of the new fiscal year’s $676 million payment into the following year.
As the mayor and Ruiz spoke to reporters, Illinois lawmakers considered rescuing the cash-strapped system even as the state advances toward a government shutdown. On Wednesday, the fiscal year’s first day, they debated shifting retirement liabilities from Chicago schools to all state taxpayers -- a proposal that lawmakers outside the city have rejected in the past.
They are also preparing to vote on a measure that would fund almost $2.3 billion in essential services through July and avert a government shutdown.
Raises Vetoed
Even if Democrats, who control both chambers, approve the temporary-spending measure, it faces an almost certain veto from Republican Governor Bruce Rauner, who has called it unacceptable.
“This bill marches the taxpayers of Illinois toward an unbalanced budget one month at a time,” Tim Nuding, director of the Governor’s Office of Management and Budget, said in a letter released by Rauner’s office.
Rauner on Wednesday promised to veto a bill that would give lawmakers and other officials what he called an unaffordable raise.
The governor and legislative Democrats have been headed toward a budget impasse for months. As the first Republican to hold the governor’s office in 12 years, the former equity capital executive has insisted on regulatory reforms and spending cuts before considering any tax hikes.
Democrats have insisted that new revenue be part of any budget deal. House Speaker Michael Madigan said Tuesday the governor is “functioning in the extreme in a time when all of us should be functioning in moderation.”
© Copyright 2023 Bloomberg News. All rights reserved.