|Dirksen School, Chicago's|
From the Chicago Tribune:
This month's scramble by Chicago school officials to find enough cash to pay the bills is the result of "an appalling situation" years in the making — a cascading financial crisis that could hit classrooms this fall when nearly 400,000 kids return to school.President Obama's education secretary, Arne Duncan, used to run Chicago Public Schools.
To pay the huge tab due to the Chicago Teachers' Pension Fund, make payroll and cover other costs, the nation's third-largest school system would have to drain its checking account, max out its line of credit and burn cash set aside to pay other debts, according to outlines of school finances presented in city documents.
If CPS resorts to those steps, the district has no clear way to close next school year's $1 billion budget gap without teacher layoffs, increased class sizes and perhaps even a late opening of schools.
The district has for years put off finding a sustainable solution to its annual budget shortfalls, opting instead for tapping its rainy day fund and, under former Mayor Richard M. Daley, stiffing the pension fund for an entire decade.