Rauner: State board can block CPS bond deals
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Gov. Bruce Rauner said Monday the Illinois State Board of Education has the ability to block Chicago Public Schools from entering into bad bond deals.
And less than an hour later, CPS CEO Forrest Claypool had a simple response: No, they don’t.
Rauner made the statement just three weeks after CPS borrowed $725 million by selling bonds carrying an extraordinarily high interest rate of 8.25 percent.
“I hope that [blocking a bond issue] never becomes necessary, but we’ve got to be ready to take action and step in,” Rauner said.
Rauner reiterated that previous statements describing the rocky financial shores CPS was navigating were not meant to scare off potential lenders.
He downplayed the state education board’s decision to launch a probe into CPS, claiming it’s also occurring at five other school districts around the state.
“We have a duty to evaluate what’s going on in that school district, learn the facts and then decide what’s appropriate action to take,” said Rauner. The move could bolster his effort to have the state cede control of CPS.
“At this point we’re not recommending that the state take any particular action yet. We want to be ready. We’ve asked the state board of ed to begin to think about who can lead the school district if it needed to be restructured if the state board decided that it was financially distressed,” Rauner said.
Speaking at Curie Metropolitan High School on the Southwest Side, Claypool denied that state authority to block CPS borrowing exists.
“The governor has come up with a number of novel legal theories, but I would just refer him back to the statute,” Claypool told reporters. “The statute is very clear that the authority he seeks to exercise does not apply to the Chicago Public Schools. We welcome the governor’s help, we welcome the governor’s concern about education but we hope he’ll show the same amount of concern about poor children throughout the state of Illinois who are suffering under this system.”
He said CPS will hold off suing the state over funding, saying “Our first goal is to use the political process to right the wrongs of the funding formula and I think that’s our best path.”
Rauner, for his part, expressed annoyance at critics of his school reform efforts.
“Everyone’s yelling and me, [but] I just got here,” Rauner said minutes after telling a class of freshman at Instituto Health Science Career Academy in Pilsen that they are in the same just-arrived boat while touring the school.
“Speaker (Mike) Madigan has resisted efforts to reform the state funding formula for years — for many years, he’s blocked efforts,” Rauner said. “Now everybody this year is yelling at me, they’re saying, ‘Governor, you change it!’ I would love to change it, there’s a lot of things I want to change. We’ve got to change a lot. But somehow — I’m new — and it’s all my fault and I’m the defender of it, I mean, good grief! We’ve got to start dealing with reality here.”
The reality, Claypool said, is that “I think the public expects the governor to govern, and so I think what we’d all like to see is the governor’s formal proposal to end this discriminatory funding system. What is his proposal to provide school districts in Aurora, Elgin Decatur, North Chicago and Chicago a fair funding system that no longer discriminates against poor minority children?”