Judge lays the fate of Chicago schools in lawmakers' laps.

CHICAGO -- The Chicago Board of Education's financial future is in the hands of the Illinois General Assembly after a federal judge yesterday confirmed his Friday deadline for lawmakers to approve a bailout plan for the school system.

U.S. District Court Judge Charles Kocoras said yesterday that if lawmakers do not approve a plan by Friday, he would issue an extension of a temporary restraining order keeping schools open. However, he said the extension would be granted only if the board and the Chicago School Finance Authority, the board's oversight panel, are in agreement with the order.

Finance Authority officials have protested previous temporary restraining orders.

The restraining order suspends a state law that requires the board to have a balanced budget before classes can begin. The board currently faces a $298 million deficit in its $2.8 billion budget for fiscal year 1994, which began Sept. 1. The extension marks the fourth order issued by Kocoras since Sept. 10, when the board went to court claiming that a shutdown of the school system would violate a consent degree on desegregation.

Last Friday, the board and teachers union met a deadline set by Kocoras to reach a contract agreement. Because the board and union reached agreement by the deadline, the restraining order was extended until Oct. 15 to enable the Illinois lawmakers to consider a two-year $300 million general obligation bond plan, the use of $55 million of teacher pension fund revenues, and the allocation of $18 million of restricted state funds to balance the school system's budget. The bonds would be issued by the Finance Authority.

But the bailout plan, which was originally proposed by Mayor Richard Daley of Chicago, is facing a tough sell in the legislature.

Mark Gordon, a spokesman for Senate president James Philip, R-Wood Dale, said that although Philip has not seen the agreement brokered between the board and its teachers' union, that agreement may not contain enough school system reforms for Senate members. A three-fifths vote is needed from both houses during the six-day fall session to put the plan into effect immediately.

Gordon pointed out that the Republican-controlled Senate has already passed a $275 million bonding plan to help bail out the Chicago public school system. House officials have said, however, that the plan is "hopelessly flawed" and has virtually no chance of passing in the Democrat-controlled House, mainly because it cannot be implemented until next July.

As for the $300 million bonding plan, Gordon said the Senate has a "sizable segment of membership that flat out" opposes the idea of issuing bonds for operating expenses.

Mike Lawrence, press secretary for Gov. Jim Edgar, said the Republican governor is "willing to consider" agreement between the board and union in order to approve a plan for the school system.

Steve Brown, a spokesman for House Speaker Michael Madigan, D-Chicago, who helped broker the union and board agreement, said that Madigan "doesn't want to call a vote" on a funding plan for Chicago's schools until the entire membership of the teachers union votes on an agreement on Oct. 21.

In a related matter, another federal judge yesterday dismissed a lawsuit aimed at keeping the Chicago public schools open this week after the plaintiffs agreed to drop the suit.

The suit had threatened to conflict with Kocoras' court orders aimed at helping the board resolve its budget crisis.

Dismissal of the suit by U.S. District Court Judge James Alesia also cancels a court order he issued last Friday that would have kept schools open until Oct. 18. Now the Friday deadline previously set by Kocoras is the only deadline in effect.

The plaintiffs stopped the legal action because they were satisfied schools would remain open this week as a result of the tentative agreement between the board and its teachers' union, according to Larry Dreyfus, attorney for the plaintiffs.

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