CHICAGO -- A U.S. District Court judge in Chicago yesterday granted a motion filed by the Chicago Board of Education that will allow the beleaguered school system to open temporarily without a balanced budget after a state waiver of the requirement expired on Sunday.
Judge Steven Kocoras' ruling means the schools will open tomorrow, according to general school superintendent Argie Johnson.
Robert Howard, the board's attorney, said that the board asked the court Monday morning for a temporary restraining order to suspend the state's balanced budget requirement for 10 days. The motion was based on a federal law that requires school districts to provide desegregation programs, he said.
In his ruling, Kocoras said he will hold a hearing on Sept. 23 to consider another board motion. The motion asks the court to authorize the issuance of general obligation bonds by the Chicago School Finance Authority, the board's oversight panel. Mayor Richard Daley of Chicago has proposed a $300 million bonding plan to ball out the school system.
The board's motion also requests the use of $55 million in teacher pension fund revenues to balance the school's budget.
The financially troubled school system shut down yesterday for the second time in the last two weeks because the budget remained unbalanced. Neither shutdown affected the payment of debt service on the system's outstanding bonds.
The board faces a $299 million deficit in its $2.8 billion budget for fiscal 1994, which began Sept. 1. Under state law, the Chicago Board of Education is the only school district in Illinois required to have a balanced budget before classes can begin.
On Sept. 3, Gov. Jim Edgar and state lawmakers temporarily waived the balanced budget requirement to enable Chicago, schools to open as scheduled last Wednesday. However, the school board decided last week not to open schools because of a hiring freeze placed on the school system in conjunction with the waiver by the legislature.
The waiver was also intended to give legislators until last Sunday to consider a two-year $300 million bonding plan to bail out the school system. Edgar and other state lawmakers have said they are reluctant to extend the waiver.
Consideration of the bonding plan remains at a standstill in the Capitol, partly due to deadlocked contract negotiations between the board and the Chicago Teachers Union. The board is looking for about $64 million in concessions from the union.
Over the weekend, Board President D. Sharon Grant said that the board will return to the bargaining table only if a union counter-proposal "fits within the board's current financial constraints."
Steve Brown, spokesman for House Speaker Michael Madigan, D-Chicago, said yesterday that lawmakers will not approve a bailout plan unless they see positive signs that the board and the teachers' union will agree to major points in their contract negotiations.
Standard & Poor's Corp. has placed about $17 million of the board's BBB-rated general obligation bonds on CreditWatch with negative implications. About $13.5 million of Chicago Public Building Commission debt secured by the board's lease rental payments also was affected by the action. Moody's Investors Service rates the board's GO debt Baa.
