CHICAGO – A flurry of filings are due over the next month as junk-rated Chicago Public Schools seeks a ruling by May 1 on its request to block the distribution of state education funding under current formulas.
District lawyers told Cook County Circuit Court Judge Franklin Ulyses Valderrama at a hearing Friday that it would be forced to shutter schools weeks early in June without additional funding and needs a decision by May 1.
Also at the hearing on CPS' motion for a preliminary injunction against the state's distribution of aid based on what it argues are discriminatory formulas, state lawyers said they would soon file a motion to dismiss the litigation. The state believes the district as a local unit of government lacks the power to sue the state under its Civil Rights Act.
The state's motion to dismiss and response to CPS' preliminary injunction request are due March 23, according to Attorney General Lisa Madigan's office. CPS' response and additional filings in support of its injunction request are due April 3 with the state's responses then due April 10. With the all briefings in, a status hearing is then set for April 11.
The judge who serves in the Chancery Court also reserved April 19 for a hearing if needed.
The Chicago Board of Education filed a complaint against Illinois on Feb. 14 alleging that its funding formulas discriminate against the district's mostly minority student population. The district contends that it would receive $500 million more under a fair system. The request for an injunction came early last week.
The district has warned that without additional state help or court intervention it will have to close schools early and cancel some summer school to help erase $129 million of red ink.
That's what remains after cuts and other actions of a $215 million hole left by Gov. Bruce Rauner's December veto of $215 million in aid to help cover the district's more than $700 million teachers' pension payment due in late June. The bill he vetoed was tied to passage of state pension reforms that never came to pass.
"What we are saying is that we have few options left, either more difficult and painful cuts or a shorter school year," CPS Chief Executive Officer Forrest Claypool said at a news conference last week to discuss the filings. The district's remaining short term borrowing capacity is being reserved for cash flow and to help cover the pension payment.
Ending the school year June 1 would save about $91 million and curtailing some summer school another $5 million. Trimming so many days would violate state requirements on school days, so it could lose between $45 million and $60 million in aid in the next fiscal year, according to estimates.
The Rauner administration offered up two quick fixes for CPS' urgent need for funding in a March 6 memorandum that became public Monday.
"At present, there are two paths toward a legislative agreement that could fulfill the city's request," Rauner chief of staff Richard Goldberg wrote to Michael Mahoney, deputy chief of staff for policy and legislative affairs. The state could authorize the use of city tax-increment funds. The city has freed up "surplus" TIF funds in recent years, moves that have helped its own budget and CPS coffers including providing funds to cover teachers' raises but legislation is needed to use general TIF revenues for non-development related purposes.
"Given the extraordinary mismanagement of both the city and CPS budgets, legislation could be enacted to authorize a one-time mayoral transfer of $215 million from Chicago TIF funds to CPS. We are in the process of drafting this legislation in case the General Assembly, the governor and other advocates want to move on this idea quickly," the letter says.
The state could also revise TIF policies with respect to education use to help provide long-term funding relief to the district.
The second short-term option the Rauner administration pitched involves pulling two of the 12 bills in the Senate's bipartisan budget fix that has stalled. The bill providing the district with $215 million could be combined with the bill overhauling the state's pension system and combined proposals could be pulled from the "Grand Bargain" legislation. The current package requires that all 12 bills pass for any one of them to become law.
"Such a comprehensive pension reform agreement would satisfy the deal we made last summer and could be signed into law without delay," the memo says.
