Most people in Chicago’s City Hall probably recall a moment of clarity, a little voice whispering, this can’t last.
Maybe it came in 1979, when the city’s schools nearly went broke. Maybe it came in the late 1990s, when no one funded the teachers’ pensions. Or maybe, finally, it came this month, when the nation’s third-largest public school district, with almost 400,000 students, once again slid toward the brink.
Today the Chicago public schools are in such dire straits that officials from the Illinois governor down wonder aloud about its solvency. Yes, a few other big-city systems, like Detroit’s, are in worse shape. But nowhere else in American public education have local mismanagement and Wall Street engineering collided so spectacularly.
The numbers tell the story. The teachers’ retirement fund is short about $9.6 billion. The school system owes more than $6 billion to its bondholders. On Wall Street, Chicago schools have the makings of following the same path as Puerto Rico, which is struggling with a $70 billion debt crisis.
“They’ve run out of road,” says Dick Simpson, a former city alderman who teaches political science at the University of Illinois at Chicago.
How did it come to this? Among the many culprits, real or perceived, are recalcitrant unions, inept administrators, feckless politicians and self-interested bankers. But, in the end, the simple answer is this: too much debt. The budget math is sobering. Since 2007, actual district spending has soared by more than a third, even as enrollment has fallen 4 percent.