Chicago Public Schools

Bankruptcy Just Might Be the Thing That Keeps Us From Shortchanging Our Kids

While the prospect of any school district declaring bankruptcy is not a cause to celebrate, the fact is that any district that finds itself in that position is in need of tremendous change, and bankruptcy may be one tool that helps the district and community do right by their kids. There’s a blog post floating around attacking EdBuild (an organization I recently founded) on this point that mischaracterizes our organization. It touches on some important policy areas, so it’s worth correcting the facts. The charge distracts us from finding a way to deal with the unfair way we’ve structured funding systems around our schools and encourages dishonest political attacks. The post selectively pulls a few quotes from a panel appearance I made a few months ago, and then alters several of them, to misconstrue the point I was making, which was that bankruptcy isn’t sought after, but for districts in perilous financial situations it can be a huge opportunity. It is a problem for those governing the system to solve, but for kids whose education is being underfunded thanks to decades of accumulated debt, bankruptcy can be the fresh start a district needs, an opportunity to move forward. I encourage you to actually watch the whole panel and see what I had to say (my comments start a bit after 23 minutes in). Here’s exactly what I said:
When you think about bankruptcy, this is a huge opportunity for school districts, and this is something EdBuild is going to focus on. Bankruptcy is not a problem for kids. Bankruptcy is a problem for the people governing the system, right? So when a school district goes bankrupt, all of their legacy debt can be eliminated. And when you’re answering questions that Andy and Mike put forward, like how are we going to pay for the buildings, how are we going to bring in new operators when there’s pension debt? Like if we can eliminate that in an entire urban system, then we can throw all of the cards up in the air, and redistribute everything with all new models. And so, you’ve heard it first, bankruptcy might be like, the thing, that leads to the next education revolution.
We created EdBuild to promote fairer funding to public schools. Students in low-income districts need more resources to succeed, but the way they’re being funded guarantees that they actually get less. And in plenty of cases, this is because districts are shackled to the legacy debts they’ve accumulated, and unable to put those resources into the classroom where they’re needed. These enormous debts, the result of irresponsibility by previous administrations, are crushing educational opportunities for kids. This year in Chicago, more than 1 in every 5 dollars in general state aid received for student learning instead went to pay down more than $6 billion in long-term debt in the Chicago Public Schools. Chicago is just one story like this—there’s hundreds of others around the country. Instead of being able to invest adequately in schools, districts are hobbled by a legacy of debt. Removing the burden of debt is an opportunity not only to free up new resources, but to find ways to ameliorate the inequitable distribution of resources between districts based on income. Why can’t public schools be able to erase their debt and start anew, such as, for example, the city of Detroit? There’s something wrong with a system that prioritizes the interests of Wall Street by siphoning taxpayer dollars away from our classrooms to pay for these legacy debts. Baseless attacks take us away from having these important discussions and arriving at solutions. And it doesn’t help kids whose education has been shortchanged, in terms of both money and quality.
Rebecca Sibilia is founder and CEO of EdBuild. Prior to starting EdBuild, Rebecca served as the chief operating officer and vice president for fiscal strategy at StudentsFirst.
Photo of Englewood montessori students.
Rebecca Sibilia launched EdBuild in June of 2014. Prior to starting EdBuild, Rebecca served as the chief operating officer and vice president for fiscal strategy at StudentsFirst. In her fiscal strategy role, she led a team in analyzing per-pupil funding levels and state funding mechanisms that ensure “equity” and “adequacy” considerations. Her team also studied ...

Join the Movement