As students headed back to school across Illinois, many of them were greeted by the realities of budget cuts – fewer teachers, disappeared after-school programs, the loss of librarians and music and art classes. College students at public institutions are feeling the impact of losing hundreds of highly-qualified professors and a growing uncertainty about the 2nd half of the academic year with no state budget to fund Higher Education beyond December.
While students and families are being asked to do more with less, Wall St. Banks continue to make millions off of the state of Illinois as well as its school districts.
Big Wall St. Banks took in more than $92 million in interest rate swap profits from the state of Illinois during FY’16. Meanwhile, Teen Reach, a highly successful after-school youth development program, went unfunded for all of school year 2015-16. Teen Reach served nearly 13,000 youth annually throughout Illinois, including Rockford, Springfield, Aurora and Blue Island. Despite the program’s success, young people in all of these communities returned to school this year with no Teen Reach program in place.
And still, the state hasn’t missed a payment to banks like JP Morgan Chase and Bank of America. And it seems as though Governor Rauner’s Administration is preparing to speed up payments to the banks. The Governor can choose to trigger a massive early payout of nearly $1 billion to big Wall Street banks this fall. Or he can extend the agreements that would prevent the expedited payout.
Instead of paying off the Wall St. Banks, Governor Rauner could use that $870 million to fully fund Teen Reach, fund the MAP grant program at levels that would support all 270,000 eligible students, and still have funds to spare.
Chicago chose to pay out more than $1.4 billion ($500 million from CPS and $934 million from the City of Chicago) to big Wall St. Banks. Instead of choosing to re-negotiate the toxic swap deals, or seek a legal remedy to recover funds lost in these legally questionable agreements, the Mayor chose to pay the banks everything they asked for, including more than $217 million in voluntary early termination fees.
Mayor Emanuel chose Wall Street over students – resulting in teacher layoffs, school cuts, and a large Chicago Public Schools budget deficit. But Governor Rauner does not have to make the same mistake, his administration can renew letters of credit and avoid the billion dollar Wall Street payout. For the sake of our children’s education, we need to make sure that Rauner chooses students.