The Chicago Tribune quotes Michael Pagano, GCI fellow and dean of the College of Urban Planning and Public Affairs, on the budget deficit faced by Chicago Public Schools. Pagano says the long-term cost to CPS of declaring bankruptcy would outweigh any short-term gains.
CPS, which is negotiating to avoid $228 million in penalty payments related to its derivative contracts, would theoretically have more money for education if it broke free of those liabilities. But the long-term cost of declaring bankruptcy would far outweigh any short-term gains, said Michael Pagano, dean of the University of Illinois at Chicago’s College of Urban Planning and Public Affairs.
“Imagine the district needing to borrow money in the future,” Pagano said. “Are you going to trust a school district that has not honored its commitments in the past?”