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Plan for takeover, bankruptcy is 'lifeline' for CPS, Republicans say

Is it a lifeline or a lead weight?

On Wednesday, Gov. Bruce Rauner’s legislative allies proposed legislation that they called a “lifeline,” that would allow an oversight board to take over Chicago Public Schools, as it drowns in debt, and create a path to bankruptcy.

CPS officials couldn’t paddle away fast enough from the offer.

“The goal here is to right the ship,” Illinois House Minority Leader Jim Durkin explained Wednesday, continuing the nautical theme, at a news conference alongside Illinois Senate Republican Leader Christine Radogno.

But there was no actual legislation to unveil; two bills will be introduced “within the week,” the leaders said. One bill would allow CPS and also the city of Chicago to declare bankruptcy, while the other would create an oversight board for CPS.

The legislation would permit the state’s Board of Education to remove current Chicago Board of Education members to create an independent board to run CPS until they’ve determined it’s financially solvent. The new legislation would also take away an exemption that CPS has regarding a state financial oversight law.

The state has taken control of CPS finances before. In January 1980, the Illinois General Assembly created the Chicago School Finance Authority as part of a massive program to bail out the school board, which couldn’t get banks to loan CPS any money. The oversight board kept watch on school finances, as well as reform efforts.

That lasted until 1995 when Mayor Richard M. Daley got back control of CPS. Daley signed off on most, but not all, of the provisions of a reform bill as the Republicans had control of both the House and Senate.

Flash forward to 2016, as Mayor Rahm Emanuel tries to fend off another teachers strike. The mayor last year signed off on a school budget that assumes $480 million in pension help from Springfield. That’s not looking good considering the state has been in a budget stalemate since last July.

Rauner on Wednesday said bankruptcy done right could mean no teacher layoffs and possibly even additional hiring.

A timetable for proceeding, Durkin said, is “up to two guys — [House Speaker] Mike Madigan and [Senate President] John Cullerton. . . . The question is up to them.”

But state Democrats took little time before lambasting the legislation, saying quite simply, they won’t budge.

“This is not going to happen,” Cullerton said in a statement. “It’s 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. He called the state taking over CPS a “far-fetched notion.”

Chicago Public Schools CEO Forrest Claypool called the legislation a “smokescreen” to hide that the state “continues to discriminate” against Chicago kids by providing 73 cents for every dollar that children in the rest of the state receive on average.

“It’s an unequal funding system for some of the most vulnerable and impoverished children in the state. It’s immoral and it won’t withstand scrutiny,” Claypool said.

Pressed on whether CPS was contemplating a lawsuit against the state, Claypool said, “No comment. No comment. No comment.”

Despite the slim odds of success, GOP legislative leaders said Wednesday they will push forward – and Durkin said the legislation will fail only if Democrats continue to support the status quo.

Radogno said the proposed board would have expertise in education and finance, and some members would be “local.”

“We don’t feel like we’ve had a good look at what’s going on in Chicago Public Schools,” Radogno said. “Everything is sort of inbred in terms of the political system.”

But Radogno denied the idea is to dismantle traditional public schools in CPS in favor of charters.

“That is absolutely not true,” she said.

Durkin added that at least two dozen other states already allow local governments to declare bankruptcy, as the Republicans’ still-to-be completed legislation would do.

The bankruptcy idea was announced as CPS continued to meet around-the-clock with the Chicago Teachers Union on making a deal that would avert the need for up to 5,000 layoffs.

Jesse Sharkey, CTU vice president, stepped out of a daily bargaining session with CPS to call the governor’s plan “a disruption practice.”

“It’s sort of a little temper tantrum,” Sharkey said, “and the adults in the room are going to have to stay at the hard work of figuring out how to keep CPS moving forward.”