Passing the Buck - Action Center on Race and the Economy

How Paul Vallas’s Toxic Deals Wreaked Havoc on Chicago and Philadelphia Public Schools

Chicago mayoral candidate Paul Vallas touts his record of balancing budgets and fiscal responsibility, but a close look at his financial policies as the Chief Executive Officer of Chicago Public Schools (CPS) and the School District of Philadelphia (SDP) shows a pattern of kicking financial problems down the road and leaving future generations of schoolchildren with the bill.

While Vallas was CEO, CPS:

  • Started a pattern of skipping pension payments, which ultimately led the Chicago Teachers’ Pension Fund to go from being fully funded to having a $9.6 billion shortfall;
  • Borrowed $666.2 million using “the school district equivalent of a payday loan,” which ultimately cost CPS $1.5 billion in interest; and
  • Took out a variable-rate bond, which CPS later had to take out a toxic swap deal to try to manage, ultimately costing taxpayers nearly $32 million.

Under Vallas’s leadership, SDP took out a series of toxic swap deals, which ultimately cost Philadelphia taxpayers more than $161 million. In each of these cases, Vallas took measures that helped him balance his budgets by pushing his administration’s costs onto future generations of Black and brown schoolchildren, teachers, and taxpayers.