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.
For years, the Chicago school system has been paying the bills on a hope and a prayer. Now it’s time to pay the piper. They don’t have the dough to pay what they owe to the teachers’ pension fund. Their creditworthiness has been downgraded to “junk” status. They lost over $100 million on a series of complex interest-rate gambles engineered by their former COO, David Vitale, who previously — you’re gonna love this — served as Vice Chairman at Bank One Corp.
Unless Mayor Rahm Emanuel can squeeze some aid out of the state government, things look bleak for his school system.