ERIC Number: ED202093
Record Type: Non-Journal
Publication Date: 1980-Oct
Reference Count: N/A
Big City School Bankruptcy.
Cronin, Joseph M.
Three big-city school systems nearly went bankrupt in the 1970s. New York City, including its schools, ran out of money; Cleveland closed its schools for long periods to conserve funds; and Chicago's schools ran out of credit. This paper narrates these crises, examines the responses of state governments and teacher and custodian unions, and looks for causes and possible solutions. While specific causes varied from city to city, in all three instances the city school boards had great difficulty both in closing underutilized schools and in raising property taxes and all three attempted to cover budget deficits with short-term borrowing. In response, the state in each instance took over major budget, financial, and sometimes labor decisions from the city school board and imposed large cutbacks that the board, the unions, and local neighborhoods had to accept. City school systems with similar potential problems may avoid such crises through effective and timely retrenchment, in which closed school buildings are used by other agencies and school employees' fears are taken into account, and through increased state funding on an emergency, as-needed basis, a response pioneered in Ohio. (Author/RW)
Descriptors: Boards of Education, Budgeting, City Government, Educational Finance, Elementary Secondary Education, Federal Aid, Finance Reform, Financial Problems, Government School Relationship, Loan Repayment, Money Management, Retrenchment, School Closing, School Desegregation, School District Autonomy, State Aid, State Government, State School District Relationship, Unions, Urban Schools
Institute for Research on Educational Finance and Governance, CERAS Bldg., Stanford University, Stanford, CA 94305 ($1.00).
Publication Type: Opinion Papers
Education Level: N/A
Sponsor: National Inst. of Education (DHEW), Washington, DC.
Authoring Institution: Stanford Univ., CA. Inst. for Research on Educational Finance and Governance.
Identifiers - Location: Illinois (Chicago); New York (New York); Ohio (Cleveland)