Thursday, September 10, 2015

Chicago heading down the path of Detroit as budget shortfall may now close schools

Since the city of Detroit became the poster child for failed industrial cities in the U.S., several other major municipalities have also succumbed to degradation and mismanagement.  One in particular, the city of Chicago, has not only been dropped to junk bond status by Moody’s for their corporate bonds, but now they are in trouble of having to suspend or close down schools because of major budget shortfalls that have already hit their pension systems.

Chicago Public Schools—with 394,000 students and nearly 21,000 teachers—has closed more than half of a projected $1.1 billion shortfall through cuts, borrowing and other means, but is looking to the state to come up with the rest. The school board warns of deep cuts later this year if Illinois, which faces its own fiscal crisis, doesn’t deliver an additional $480 million in the coming months, representing roughly 8% of annual district spending.



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