The Democratic supermajority in the Legislature is unlikely to advance Republican Gov. Bruce Rauner’s proposal. | Getty Governor lunges for control of Chicago schools, teachers union Republican Gov. Bruce Rauner is angling for a takeover of the financially flailing school district.

The broke Chicago school system is the latest laboratory for an ambitious Midwestern governor trying push his anti-union agenda.

Republican Gov. Bruce Rauner is angling for a takeover of the financially flailing school district, a move that would allow him to battle the powerful Chicago Teachers Union.


The Democratic supermajority in the Legislature is unlikely to advance Rauner’s proposal. But his play for power is another political collision between the governor, eager to prove himself as a Scott Walker-style conservative, and Chicago Mayor Rahm Emanuel, who has accused the governor of taking teachers and students hostage in the name of a political agenda.

Emanuel has for months been asking the state for money to help CPS and has complained that state education funding — which pays for teacher pensions in every district except Chicago — is unfair. Until now, Rauner has offered to give Chicago a $200 million pension bailout, but only as part of a larger legislative push to ease collective bargaining rights .

Rauner’s proposal , unveiled by Republican state lawmakers Wednesday, would give the state board of education, which he appoints, authority over the school system. It would also change state law to allow the school district or the city to declare bankruptcy, a move that would make it possible to renegotiate union contracts.

“If the mayor is unwilling to stand up for his taxpayers and his school children in dealing with the Chicago Teachers Union, [then] rather than trying to push his liabilities on the state, we’re asking the mayor to partner with us,” Rauner said.

Chicago teachers and students are now waiting for a solution to a fiscal crisis that has left the district with a $500 million hole in its budget for the year. Experts are unsure whether Chicago will be able to finish the school year without some sort of bailout, or if it will have to borrow more money. And Emanuel is locked in slow-moving negotiations with the teachers union, which is concerned about the possibility of thousands of layoffs in the near future. Job cuts could lead to the second CTU strike in four years.

The state of Illinois, meanwhile, is dealing with its own budget and pension problems. The state is facing a pension shortfall of more than $100 billion. And Rauner, who took office a year ago, has thus far been unable to agree with Democrats on a budget.

“If the governor was serious about helping Chicago students, he should start by proposing — and passing — a budget that fully funds education and treats CPS students like every other child in the state,” Emanuel spokeswoman Kelley Quinn said.

Teachers had just breathed a sigh of relief Monday when the deadline passed for the district to notify teachers if it planned to lay them off mid-year. The union called for the mayor’s resignation earlier this month because of Emanuel’s management of Chicago schools and his handling of the death of Laquan McDonald, a young black man shot by police. And in December, 90 percent of CTU members voted to authorize a strike, setting up a potential teacher’s strike this spring.

But they also reject the governor’s proposal. The Chicago Teachers Union called Rauner’s plans a “non-starter” in a statement, comparing the takeover to a 1995 reform law that put the city under mayoral control, led to a proliferation of charter schools and curbed union power.

“Instead of rejecting failed policy, the governor is doubling down and holding Illinois citizens hostage with his austerity agenda,” the union said.

Chicago Public Schools has found itself in increasingly dire financial straits brought on in part by the 2008 financial crisis. Starting in the 1990s, Mayor Richard Daley began diverting pension funds into operations spending for the district. Teacher salaries and school choice options grew in the years that followed, and returns on the pension funds kept the pension system afloat.

But by 2005, the money in the pension fund versus what was owed to future retirees was declining. And in the years that followed, though the city began paying into the fund again, the amount Chicago needed to pay into the pension system ballooned.

The pension problem is a big part of what’s driving Chicago’s budget shortfall, though it’s not the only factor. The city also pays teachers relatively high salaries. A teacher with a bachelor’s degree and five years of experience makes $61,831, according to the National Council on Teacher Quality, the second-highest of the 120 large school districts surveyed by the organization. And the opening of charter and alternative schools has left many neighborhood schools underenrolled, leading to an inefficient system with higher costs, said Peter Cunningham, who worked for former Education Secretary Arne Duncan when Duncan was in charge of CPS.

The Chicago school board did try to stop the bleeding by voting to close 49 of the more than 300 schools found to enroll too few students in 2013. Many residents in neighborhoods that lost local schools, many of which were in low-income areas, resisted the closings.

Today’s situation is “much more dire than anything Arne Duncan faced in his seven years as CEO,” Cunningham said. “Their bonds are junk bond status, or close to junk bond status. Should they borrow more money? Probably. Do they want to? No.”

By the time Emanuel took office in 2011, he was facing the mounting pension crisis. Last summer, the mayor proposed fixing the shortfall with a combination of cuts, extra money from the state, higher pension contributions from teachers and a property tax hike — but neither the state or union have so far bought into the plan.

Republicans in the statehouse blamed the city’s lag time in responding to its fiscal crisis as one reason for Chicago’s troubles.

“Despite credit downgrades to junk status, CPS is now looking to long-term bonds to pay for hundreds of millions of dollars in short-term operating expenses,” said Jim Durkin, the minority leader in the state House. “CPS and the city of Chicago are in a state of crisis, a crisis that they have had years to prepare for and that could have been averted.”

Even as they argued that their plan has some chance of passage, Republican leaders acknowledged that it would require a major change in the political winds.

“If the Democrat leaders want to continue with the status quo with the city of Chicago and CPS, then sure, it is dead on arrival,” Durkin said. “That is to their peril.”

The city may borrow more money to keep schools’ doors open in the coming months, experts said. But credit rating agencies have become wary of the country’s third-largest school district’s ability to pay off its debts: Standard & Poor's downgraded the city’s debt Friday, and said it may do so again in the next six months. S&P Credit Analyst Jennifer Boyd said in a statement that “adverse business, financial or economic conditions will likely impair the board's capacity or willingness to meet its financial commitments.” Moody’s also downgraded the city’s credit rating, which was already in “junk” territory, in December.

And in an interview with POLITICO, House Speaker Mike Madigan's spokesman Steve Brown compared the proposal to the situation in Flint, Mich., where the entire city is under state control.

Flint “may be the template you may want to use when you evaluate whether it’s a good idea to take over. Look at what happened to the people in Flint and try not to repeat mistakes,” Brown said.

The comparison to Flint, which is grappling with the fallout of a water source change that created unsafe lead exposure for children and adults, is drastic — and it was rejected by the Republican leaders. Yet there are parallels between Michigan and Illinois’ school crises: Dismal academic performance and budget woes are the primary reasons school districts are wrenched from local boards. Detroit has been run by the state for seven years, and its financial problems remain. Like Chicago, the much smaller Michigan school district is more than $500 million in the hole. Detroit has cycled through several emergency managers, and teachers, unsatisfied with their pay and working conditions, have been calling in sick in droves for more than a week, shuttering schools, including Wednesday.

On Tuesday, Gov. Rick Snyder proposed splitting Detroit into two districts, one to run the school system, the other to address the debt. Snyder said his plan would keep the district from having to declare bankruptcy.

Across the country, more than two dozen states have laws on the books allowing a state to take over a school district. Several districts in New Jersey, which passed the first law allowing takeovers, have been in state hands for more than a decade. And in several states, state-run districts have been crafted to oversee a selection of especially poorly performing schools, including in Tennessee and Michigan.

But state takeovers have a poor track record, said Michael Griffith, school finance strategist for the Education Commission of the States.

“People at the state department of education don’t run schools or school districts. It’s not their job,” Griffith said. But in order to get a district back on its feet, Griffith said, “you really have to hit the ground running.”

Marcella Bombardieri, Caitlin Emma and Nirvi Shah contributed to this report.