Financial Expert: Face Facts Chicago Public Schools are Insolvent

Crain's Chicago Business has an opinion piece from Brian Battle who is a director at Performance Trust Capital Partners:

This decades-long, wholly predictable crisis is entirely man-made. CPS is insolvent.

With about 392,000 students, 32,000 public school staff and a budget of $5.5 billion, CPS spends about 70 percent of its budget on salaries and benefits. In fiscal 2015, pension contributions consumed about 11 percent of the operating budget. The payments into the pension system have been inadequate for years. The size and scope of the problem threaten the education and development of Chicago's schoolchildren—the workers, thinkers and innovators of tomorrow.

This year's CPS budget “balances” on an anticipated special revenue payment of $480 million from the state Legislature. This assumption is incredulous, since the state has failed to pass its own budget for five months. It is unconscionable that a city of Chicago's stature could not have anticipated a monetary shortfall of this size—and that the proposed solution is an unprecedented discharge of almost half a billion dollars from the state treasury.

What's more, CPS this week released a list of “school actions,” which means closures and consolidations. CEO Forrest Claypool also has indicated a possible layoff of 5,000 teachers—nearly 25 percent of the system's 22,000 teachers.

The sad reality of government schooling.