Chicago schools to borrow $389M to pay pensions, finish year

May 19, 2017 GMT

CHICAGO (AP) — Chicago Public Schools plans to take out a $389 million short-term loan to get the financially struggling district through the end of the school year and make a pension payment due next month.

Mayor Rahm Emanuel announced the plan Friday. His appointed school board will vote on it Wednesday.

Emanuel blamed Illinois lawmakers and “failed leadership in Springfield” for putting the nation’s third-largest district at a financial disadvantage.

Chicago taxpayers cover the cost of CPS pensions, while the state makes the payment for other school districts. Republican Gov. Bruce Rauner opposes legislation to have Illinois pick up the cost, saying it’s a “bailout” because CPS gets other grant funds.

CPS says the state also owes the district $467 million. Those grant payments are delayed because of the state budget impasse.