CHICAGO - The Republican-controlled Illinois Senate on Monday passed a $275 million bonding plan to help bail out the Chicago public school system, but the plan is unlikely to be called for a vote in the Democrat-controlled House.
Meanwhile, the school system could shut down for a third time since Sept. 1, the start of its fiscal year 1994, if the Chicago Board of Education's budget is not balanced by tomorrow. The beleaguered school system faces a $299 million deficit in its $2.8 billion fiscal 1994 budget.
Also tomorrow, a federal judge will hold a hearing to review a board motion that would authorize the issuance of bonds to help rescue the school system.
If the school system shuts down, the payment of debt service will not be affected.
Steve Brown, spokesman for House Speaker Michael Madigan, D-Chicago, said that because the Republican plan is "hopelessly flawed" the speaker will not call the bill for a vote in the House.
"It's going nowhere," Brown said.
The two-year Republican funding plan, which passed the Senate in a 30-to-28 vote, calls for $25 million less borrowing than a plan offered by Democratic Mayor Richard M. Daley of Chicago in August. No Senate Democrats voted for the Republican-sponsored plan.
As with Daley's two-year $300 million borrowing plan, the general obligation bonds would be issued by the Chicago School Finance Authority, the board's financial oversight panel, according to Mark Gordon, spokesman for Senate president James Philip, R-Wood Dale.
The Republican plan also relies on about $152 million of budget cuts and union concessions, and the diversion of about $90 million in poverty funds to the Chicago Board of Education.
In addition, the plan includes a provision that would place a property tax increase for the Chicago public schools on the ballot for the April 1995 mayoral election.
The simple-majority approval of the plan in the Senate means the plan would take effect on July 1, 1994. A three-fifths vote of approval would have been necessary in order for the the plan to become effective immediately.
Brown of the House speaker's office said that under the Republicans' plan, the bonds would not be issued until July, which would be too late to solve the school system's cash-flow problems anticipated in January and February.
In a press release, Daley said that the Republicans' plan "does absolutely nothing to keep Chicago's children in school."
On Monday, Republican Gov. Jim Edgar, who also has supported Daley's plan, said he would back the Senate measure because it would enable the school system to balance its fiscal 1994 budget.
"It's a good package, considering the difficulty we have putting the necessary votes to pass something," Edgar said.
Brown also said that Madigan would like to see "some agreement" between the school board and the Chicago Teachers' Union before taking any action on a legislative plan to rescue the school system.
Meanwhile, negotiations between the board and the union are deadlocked, according to Jackie Gallagher, spokeswoman for the union.
Gallagher said she believed the board is waiting until after tomorrow, when U.S. District Court Judge Charles Kocoras will hold a hearing to review a board motion requesting the court to order the issuance of GO bonds by the school finance authority. That motion also requests the use of $55 million in teacher pension fund revenues to balance the school system's budget.
In a press release, the school finance authority said it "opposes the school board seeking continued financial relief in federal court." The authority said it would rather have the board, the teachers union, and the Illinois General Assembly develop "long-term approaches that maintain the financial soundness of the school system."
Last week, Kocoras issued a temporary restraining order to suspend the state's balanced budget requirement until tomorrow to allow more time for state lawmakers and board and union officials to work out a solution to the school board's immediate fiscal woes. The Chicago Board of Education is the only school system in the state that is required to balance its budget before classes can begin.