Since the city of Detroit became the poster child for failed industrial cities in the U.S., several other major municipalities have also succumbed to degradation and mismanagement. One in particular, the city of Chicago, has not only been dropped to junk bond status by Moody’s for their corporate bonds, but now they are in trouble of having to suspend or close down schools because of major budget shortfalls that have already hit their pension systems.
Chicago Public Schools—with 394,000 students and nearly 21,000 teachers—has closed more than half of a projected $1.1 billion shortfall through cuts, borrowing and other means, but is looking to the state to come up with the rest. The school board warns of deep cuts later this year if Illinois, which faces its own fiscal crisis, doesn’t deliver an additional $480 million in the coming months, representing roughly 8% of annual district spending.
“It is like the board is a desperate gambler at the end of their run,” said Jesse Sharkey, vice president of the Chicago Teachers Union, in a recent speech.
“We are really now at a point where further cuts would reach deep into the classroom,” said Forrest Claypool, who was named chief executive of the city schools in July.
Since 2011, the school board has made nearly $1 billion in cuts—including $200 million this year that involved eliminating 1,400 positions, mostly through layoffs. Enrollment declines, due to shifting demographics and Chicago’s shrinking population, have led to school closings, including nearly 50 elementary schools in 2013 alone. – Wall Street Journal
Contrary to the rhetoric that America’s economy is in full recovery, the city of Chicago has hemorrhaged cash despite having one of the highest sales and property tax schemes in the country. And with a $111 billion shortfall in their pension systems that was created back when unions had full control over the legislature, the city now faces the prospect of default in many different sectors of their municipal responsibilities.
It is sad to think that no matter how much money has been put into education since the late 1980’s, it appears never to be enough to facilitate a good education for children in the what was once the greatest nation in history. And while Illinois ranks 30th out of 50 states within the union for educational literacy, the prospects of falling even further behind rest upon the local government’s ability to restructure their education system without the aid of additional monies, or a political will to confront the unions like was done in Wisconsin just a few years ago.
Kenneth Schortgen Jr is a writer for Secretsofthefed.com, Examiner.com, Roguemoney.net, and To the Death Media, and hosts the popular web blog, The Daily Economist. Ken can also be heard Wednesday afternoons giving an weekly economic report on the Angel Clark radio show.