CPS mulls bankruptcy amid budget woes

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CHICAGO - At CPS headquarters there is a firm belief that bankruptcy would be a national embarrassment and cause more problems than it would solve.  But some politicians and education leaders say the idea may be the the only way out of the financial mess.

Chicago Public Schools faces a $1 billion dollar deficit, junk bond status and a pension crisis. Experts say many of these problems were brought on by a cycle of borrowing, spending and delaying.

There is no easy solution. Governor Rauner has suggested that bankruptcy may be the best option, and he says the state will not bail out Chicago's schools. Mayor Rahm Emanuel says declaring bankruptcy is not even a remote possibility.

The question was debated at the City Club of Chicago.

Former Chicago Public Schools CEO Paul Vallas argued that bankruptcy would stigmatize the district, leading parents to send their children to private and charter schools, therefore diminishing enrollment and funding.

State law would have to change to allow the school district to declare bankruptcy. If that were to happen, then CPS itself would have to make the decision.

But as more than 600 Chicago schools are preparing for a new year, the officials in charge are certainly not preparing for bankruptcy.