Rauner: I’m no saboteur

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After signing an executive order to form the Illinois Business and Economic Development Corporation, Gov. Bruce Rauner angrily denied trying to undermine CPS efforts to issue hundreds of millions of dollars worth of bonds. | Rich Hein/Sun-Times

Gov. Bruce Rauner insisted Wednesday that his recent comments highlighting the ultra-shaky financial footing of the Chicago Public School system were not meant to scare lenders and imperil the school system as a way to further his position that the state should take the reins.

Rauner was indignant about assertions of sabotage.

“That’s ridiculous,” Rauner said. “I believe that’s City Hall flailing and floundering and failing and looking to blame others for it.”

His comments Wednesday come against the backdrop of CPS trying — for the second time — to secure a bond deal that would offer a financial lifeline. One attempt was halted last week, but on Wednesday, the day after Rauner repeated his determination to take over Chicago schools, CPS returned to Wall Street to borrow $725 million.

Also in the background is the fact that Rauner has refused pleas from City Hall for $500 million to fund CPS. Rauner has said he will free up the money only if Emanuel agrees to support his plan to diminish the bargaining power of unions.

The crises at CPS would be manageable if Emanuel had only listened to him last year when he offered the mayor some advice, said Rauner, who is overseeing a financial crisis on the state level.

“The mayor rejected it, he said no to any structural reform. He said, ‘What I want you to do is just send half a billion cash and leave me alone.’ That’s not going to happen,” Rauner said.

“The numbers don’t lie. CPS has been a financial disaster for years. The balance sheet is stunningly bad,” said Rauner — even though, moments later, he was questioning the validity of CPS balance sheets.

“CPS has been particularly . . . what’s a nice word for it: ‘opaque’ about their financial condition for years. They’ve been Chicken Little, screaming the sky is falling for years. I don’t know what to believe. When I do my own analysis from what limited information I can access I don’t see how CPS gets through their current financial condition without either completely unaffordable tax hikes that would devastate the city — or a bankruptcy.”

Rauner said additional borrowing will only lead to additional taxes down the road.

“And now they’re looking to borrow more money to cover operations. Borrowing to cover operations is basically taxing delayed. This is kicking the can, this not solving the problem. I’ve encouraged the mayor to get structural reform. So far he’s refused.”

Rauner argued that a bill allowing the state to take over CPS is not “dead on arrival” in Springfield simply because it would need approval from a Legislature dominated by Democrats.

“When the time comes, many Democratic legislators are not from Chicago, they’re from the suburbs . . . and you know what, when their voters understand what’s been going on and the subsidies that state taxpayers around Illinois have been funding CPS and now we can protect them from the mayor trying force off a half a billion dollars in liabilities on them, you watch,” Rauner said. “You’re going to see that that bill is not dead on arrival like some are trying to claim.”

Rauner said if the state does take over CPS, he would prefer a new superintendent who is from Chicago. And he echoed his plan to put in place an elected school board that is not beholden to the Chicago Teachers Union.

Rauner made his comments after a news conference Wednesday announcing the formation of the Illinois Economic Business Development Corp., a nonprofit that will work with the state to promote Illinois potential to businesses around the world.

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