Co-authored by Timothy Benson and Lennie Jarratt
The administrators who run Chicago Public Schools, the taxpayers who fund the district and CPS parents have a real mess on their hands. CPS is facing a $500 million budget shortfall for the 2015-16 school year alone. Altogether, the district is over $1 billion in the hole, and the debt CPS is carrying has been labeled “junk” by Fitch Ratings, Moody’s and Standard & Poor’s.
With the large amount of money being tossed around, one might think that educational outcomes for CPS students would be positive. Unfortunately, CPS has not recorded an above-average score, relative to other major U.S. cities, on any National Association of Educational Progress test, also known as the “Nation’s Report Card,” going back to 2002. On the latest round of testing, only 25 percent of district eight-graders tested “proficient” in math. Twenty-four percent tested proficient in English. All this despite the fact that CPS teachers are among the highest-compensated of any big-city teachers in the nation and reportedly pay next to nothing for their generous retirement benefits.
Because CPS has been running out of money at a breakneck pace and taxpayers outside of Chicago want no part in providing the district a bailout, legislation is now being proposed that would allow state oversight of CPS and would permit the district to declare bankruptcy.
While those inside CPS headquarters and Chicago Mayor Rahm Emanuel’s office have called a state takeover radical and unprecedented, the state of Illinois already has oversight authority over local school districts across the state; the only exception to that is Chicago. The proposed oversight bill would allow the state to appoint a financial authority to review all CPS spending, renegotiate all contracts—including union contracts—and to potentially raise taxes once spending has been brought under control.
The state stepping in to rein in a school district’s out-of-control financial situation has happened numerous times before, including in Round Lake Area Schools District 116 (2002-11), Cairo Unit School District 1 (2003-13), Hazel Crest School District 152-5 (2003-12) and Venice Community Unit School District 2 (2007-12). The state is using this authority in East St. Louis School District 189, North Chicago School District 187 and Proviso Township High School District 209.
CPS should not be treated any differently than its sister districts throughout the state.
Opponents of state takeovers and district bankruptcies argue these actions allow for too many cuts to staff and essential programs. And while it is true that state oversight nearly always results in such cuts, these actions get districts out of bad contracts and get finances under control. Once a severely broken district budget is repaired, appropriate restaffing that fits the needs of the district takes place.
State takeovers are useful tools in combating fiscally reckless school districts—but they are, at best, defensive actions to be taken after major damage has been done.
If Illinois lawmakers truly want to end the unsustainable spending and borrowing practices of school districts around the state, they need to empower parents and take much of the financial control of schools out of the hands of bureaucrats.
One of the best ways to do this is provide each student with an education savings account, which would be directed by parents. ESAs allow parents to put their children in a school or other educational opportunity that best meets each child’s unique needs. Responsible parents would hold schools far more accountable than bureaucratic systems are typically able to do.
[Originally published at Crain’s Chicago Business]
Tim Benson joined The Heartland Institute in September 2015 as a policy analyst in the Government Relations Department.
Lennie Jarratt is the former director of the Center for Education Opportunities at The Heartland Institute
