And Madigan raised the specter of Flint, Mich., and noted the controversy over lead found in the citys water supply there as a result of a state oversight boards decision.
Cullerton, a key Emanuel ally, called the GOP legislation a ridiculous idea.
This is not going to happen. Its mean-spirited and evidence of their total lack of knowledge of the real problems facing Chicago Public Schools, Cullerton said.
The unfair treatment of pension systems by the state is the immediate cause of CPS financial problem. That situation ought to be addressed rather than promoting this far-fetched notion that the state is somehow in the position to take over Chicago schools, he said.
Cullerton was citing the mayors top complaint: City taxpayers pay for Chicago teacher pensions through property taxes while also paying for teacher pensions outside the city through state income taxes.
Escalating required contributions to the teachers pension fund are driving the Chicago Public Schools cash shortfall. In each of the past two years, pension contributions by CPS have topped $600 million, nearly triple what was required in previous years when the district was given state permission to make lower payments even as the retirement fund shortfall grew larger.
The increased CPS pension contributions, coupled with state reductions in payments to the fund, further strained an already tight budget. This year, the required contribution from CPS is $676 million. The state is paying about $12 million into the fund, compared with more than $62 million last year.
Forrest Claypool, who Emanuel appointed to serve as CPS chief executive, has argued the state should start contributing more to the Chicago Teachers Pension Fund. But critics note that for years CPS shortchanged the fund. For a decade under Daley, CPS made no payments to the fund, albeit with state permission.
Claypool called the GOP proposals a sideshow and a reckless smokescreen that distracted from the districts recent demands that lawmakers change how Illinois schools are funded and bail out CPS.
CPS is taking steps to fix everything within our fiscal control and keep as much money in our classrooms as we can, Claypool said in a statement.
CPS and the CTU leadership are working feverishly to reach a deal that would cut costs while preventing midyear layoffs, the district is going to market with $875 million in bonds and were on the verge of even deeper cuts to the bureaucracy, he said.
CTUs Sharkey and some Democrats also questioned the timing of Rauners criticism and the Republican legislation coming just before CPS goes to the bond market. The legislative proposals were announced as Fitch Ratings again downgraded the school districts debt this week.
Fitch cited a litany of factors, including CPS limited ability to raise revenue, difficult union negotiations and a lack of material progress in efforts to stitch up a yawning budget gap. Standard amp; Poors downgraded the districts debt by two notches last week.
CPS officials say the borrowing is crucial to keep the debt-laden system afloat, though market conditions mean CPS could pay a steep premium.
Mike Griffith, a school finance strategist with the Education Commission of the States, said school districts filing for bankruptcy is a rarity. By his count, only six school districts have filed for bankruptcy since 1954. The last one, which he said came in the early 1990s, was a tiny system in Missouri.
Griffith noted that a municipal bankruptcy is different than a personal bankruptcy because it would turn over to a federal judge the control of school district operations.
I think everyone looking at it definitely sees it as a last resort, because they could dramatically lower teacher pay. They could force you to close a lot of schools, to sell those buildings, to do many steps that people would be reluctant to do, he said.
The citys schools have been under the states emergency oversight before. In 1980, a district fiscal crisis that prompted banks to withhold loans from CPS prodded state lawmakers to create the Chicago School Finance Authority to supervise schools.
CPS had to submit a balanced budget to the authority, which had power to keep school doors closed until it approved or rejected district spending plans and contracts. That arrangement lasted until 1995, when a Republican-led legislature gave Daley the control of CPS that he wanted.
Tribune reporter Hal Dardick contributed.