Chicago Schools Cut 1,400 Jobs as State Budget Fix Fails

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Chicago Public Schools will eliminate 1,400 positions as the district cuts $200 million in spending amid a pension-driven crisis. Meanwhile, Illinois lawmakers failed to pass a temporary budget that would end a partial government shutdown.

Mayor Rahm Emanuel on Wednesday called the education cuts “intolerable” and “unacceptable” for the nation’s third-largest system. Emanuel and interim schools Chief Executive Officer Jesse Ruiz announced them the day after the district used borrowed money to pay a $634 million pension bill. Making that payment worsened the system’s deficit and led to the cuts.

Emanuel offered solutions for mounting pension costs, including a single fund for all Illinois teachers or reinstating a Chicago property tax. Earlier Wednesday, the district asked the teachers’ pension fund to push $496 million of the new fiscal year’s $676 million payment into the following year.

In Springfield, the capital, a Senate committee debated a rescue of Chicago’s cash-strapped system. The panel approved shifting retirement liabilities from Chicago schools to all state taxpayers -- a proposal that lawmakers outside the city have rejected in the past.

Raises Vetoed

After the mayor and Ruiz spoke to reporters, the Illinois House fell four votes short of approving a one-month extension of spending for essential services. Although the bill might be reconsidered next week, the shutdown that began Wednesday will continue at least a week, threatening the delivery of services and the paychecks of thousands of employees.

“It seems to me incumbent upon on us as the grownups in the room to say, ‘Yes, we will do short-term funding,’” said Representative Barbara Flynn Currie, a Democrat from Chicago.

Even if Democrats, who control both chambers, approve the measure next week when they reconvene, it faces an almost certain veto from Republican Governor Bruce Rauner.

“This bill marches the taxpayers of Illinois toward an unbalanced budget one month at a time,” Tim Nuding, director of the Governor’s Office of Management and Budget, said in a letter released by Rauner’s office.

Rauner on Wednesday promised to veto a bill that would give lawmakers and other officials what he called an unaffordable raise.

The governor and legislative Democrats have been headed toward a budget impasse for months. As the first Republican to hold the governor’s office in 12 years, the former equity capital executive has insisted on regulatory reforms and spending cuts before considering any tax increases.

Democrats have insisted that new revenue be part of any budget deal.

“The number one issue facing the state of Illinois right now is the budget,” House Speaker Michael Madigan said in a statement after the vote. “In the days ahead, I will work to pass a short-term spending plan to see that the lives of struggling and middle-class families are not disrupted.”

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