The Illinois State Board of Education can stop bond deals initiated by the Chicago Public Schools, according to Gov. Bruce Rauner.
“The simple fact is, the State Board of Education has the right to block any debt offerings, any bond or debt offerings,” the governor said Monday, just days after ISBE launched an investigation into CPS’ finances. “The state board has never chosen to do that for the city of Chicago. I hope it never becomes necessary, but we have to be ready to take action and step in.”
CPS is currently under ISBE’s “financial watch,” reads a statement from Rauner’s office.
“If ISBE further determines that CPS is in financial difficulty, then the School Code prohibits CPS from issuing bonds or otherwise borrowing money until the district develops a financial plan to be approved by ISBE,” according to the administration.
Rauner’s remarks come after CPS took out a $725 million loan earlier this month with a high interest rate of 8.25 percent.
CPS CEO Forrest Clayool pushed back on Rauner’s comments Monday, saying ISBE has no such power to thwart the district’s bond deals.
“The governor has come up with a number of novel legal theories, but I’d refer him back to the statute,” Claypool told reporters. “The statute is clear that the authority he seeks to exercise is not applicable to Chicago Public Schools. We welcome the governor’s concern about education. But we hope he shows the same amount of concern for all the poor children in Illinois who are suffering under this system.”