Mayor Emanuel proposes borrowing money to keep CPS open through the year

CHICAGO -- Mayor Emanuel said last month that he would come up with the money to keep CPS open through the end of the year.
On Friday, he unveiled his plan.

Emanuel announced that his short-term fix for CPS is borrowing $389 million.

The loan is backed by block grant payments owed by the state.

"It's a short term solution for a short term problem created conscientiously, woefully by the governor in a situation to create political pressure," said Emanuel.

The money would keep schools open through the end of the year and allow the district to make its required payment to the teachers' pension.

"The state should be paying -- like it pays other teachers -- the Chicago Public Teachers pensions and the governor vetoed that out of a peak of anger towards Senate President Cullerton," said Emanuel.

The mayor is referring to Governor Rauner’s veto of a bill that would have eased CPS’s pension burden, giving it $215 million in pension funding. The governor said he couldn’t sign the deal because it was not tied to broader pension reforms.

The Governor’s Office responded with this statement saying, “…the mayor continuously chooses to lay blame on others instead of taking responsibility for his own massive failure of governance.”

Emanuel also criticized the state for delaying $467 million in block grant funding.

Friday, after they were briefed on the borrowing plan, several city aldermen expressed concerns.

"I think the option to do this payday loan, short-term, high interest loan to just get through the year is a false choice," said Ald. Ricardo Muno.

Ald. Scott Waguespack added his own concerns, "You’re in these meetings, Claypool is not there. The mayor is not there taking direct responsibility for it, it really says a lot about the situation that we’re in."

The aldermen admit that the mayor is boxed in – CPS needs cash now – But they want Springfield to change the state’s funding formula.

"We need to make sure that the entire state is adequately funded across the board. Right now we’re getting very little money that we’re entitled to in order to balance our budget," said Ald. Anthony Beale.

The CPS budget is $129 million short this year.

Next Wednesday, the mayor’s school board is expected to authorize the loan plan. But this bridge is just a quick fix. The district still faces a massive shortfall next school year.