Mayoral challenger Paul Vallas has promoted his schools resume, but blemishes garner scrutiny

When Paul Vallas was leading Chicago Public Schools in the mid-1990s, he held a memorable meeting with parents at Whitney Young High School.

The session was going well until parents pressed Vallas on why he had cut CPS staff instead of squeezing Illinois lawmakers for more state funding. Vallas snapped.

“Look, you’re living in a fool’s paradise if you think we’re going to get more money from Springfield,” he told the group. “We’ve got to take Chicago schools out of the headlines and off the radar screen downstate. … We’ve got to get our (stuff) together.”

Vallas didn’t actually use the word “stuff,” and he didn’t apologize for leaving parents wide-eyed with his impatient response.

As a candidate for Chicago mayor in the Feb. 28 election, Vallas is promoting himself as a hard-charging change agent who has turned around troubled schools in Chicago, Philadelphia, New Orleans, Connecticut and Haiti.

But a deeper look at Vallas’ long history in government and education shows a leader who has faced questions about the results he has left behind.

While Vallas has been praised by some for boosting student test scores, straightening out day-to-day finances and restoring discipline to a Chicago school system once deemed the nation’s worst, he also has been criticized for over-stressing the importance of test scores, and he’s been asked to defend his handling of the district’s pension payments and for expanding school privatization and charter schools — ideas that have aged less well as union power has grown.

The critical words haven’t just come from his mayoral opponents. They’ve come from across the country.

Michael Nutter, a former Philadelphia mayor who was a councilman when Vallas oversaw schools there, has repeatedly said, “Paul’s never seen a dollar that he wasn’t willing to spend three times.” U.S. Rep. Brendan Boyle, a Democrat from Pennsylvania backing U.S. Rep. Jesús “Chuy” García for mayor, recently said Vallas mismanaged Philadelphia schools and evaded accountability. Mercedes Schneider, a former teacher and Louisiana native who blogs about education issues, has been critical of Vallas’ record in New Orleans and Philadelphia.

“He doesn’t leave with the promises being fulfilled,” Schneider said. “He tends to leave in a mess and he moves on in a mess.”

For his part, Vallas shrugs off the criticism. Shown Boyle’s comment during a recent interview with the Tribune, for instance, Vallas slid the statement down the table for top aides to see and said, “Yeah, I don’t even know who he is.”

‘A horrible, horrible financial decision’

While Vallas has emphasized his time heading CPS as a reason for voters to support him, there is a less glossy and more complex piece to his leadership that Mayor Lori Lightfoot and other mayoral opponents have tried to hang on the former CEO — the school district’s underfunded pension system.

Vallas says he left a surplus on CPS’ books. But he also oversaw changes that shifted annual payments from the Chicago Teachers’ Pension Fund that critics say hurt the system over the long haul.

The pocketbook maneuver that critics most blame on Vallas is the decision to shift property tax revenue from going directly into teacher pension funds to ensure it remained highly solvent and to instead spend that money on other school expenses.

The move came after the Republican-led legislature and GOP Gov. Jim Edgar in 1995 overhauled how CPS was organized and gave Chicago’s Democratic Mayor Richard M. Daley more control. Daley picked Vallas, at the time the city’s budget director, to be CPS’ first CEO, and the fiscal move gave Vallas the flexibility he needed to help straighten out the budget.

At a recent mayoral debate, Vallas said the teacher pension system carried a 104% funding level during his time as CEO and he became mildly irritated in last week’s interview when asked whether any of his actions played a role in the current condition of the pension fund, which one expert said is hovering under 50%.

“It was a horrible, horrible financial decision,” said state Sen. Robert Martwick, a Chicago Democrat who chairs the Senate’s pension committee and has not endorsed in the mayor’s race.

A major downside to the 1995 law, Martwick said, was that property tax payments to the pension system could be skipped as long as fund balances exceeded 90%, leading to CPS spending much of that money for a decade on other school purposes.

Problems didn’t pop up during the go-go economy of the late 1990s. The fund stayed above 90% and millions of dollars went toward other major needs. The Civic Federation, a nonpartisan government watchdog, also noted the pension funding ratio increased when a national change in accounting helped increase the value of the assets significantly during Vallas’ watch — a point Vallas’ campaign says is a reflection of the idea that funding was stable during his tenure.

With funding levels over 100%, Vallas said, “we didn’t have to” redirect CPS money into the teacher retirement system because the robust investment earnings kept the funds above the law’s 90% trigger point that required CPS to pitch in.

“The bottom line is, if the earnings would have gone south, we would have been mandated to put the dollar amounts in to compensate,” Vallas said.

But Martwick said skipping those payments haunted the system when the economy later soured and exacerbated today’s financial troubles.

In that decade after the property tax revenues were shifted into other school programs, CPS collected the equivalent of “$1.2 billion in pension tax revenue but contributed $0 to the fund” for teacher pensions, a point cited in 2013 legislative testimony by Kevin Huber, then-executive director of the Chicago Teachers’ Pension Fund.

“Even when a fund is well-funded, it’s important to continue to make annual contributions to it,” said Sarah Wetmore, the Civic Federation’s vice president and director of research. “That’s basically protecting against any future losses,” such as drops in investment earnings.

Vallas noted the retirement system suffered a major hit that pushed funding ratios way below the healthier levels on his watch because the state granted pension holidays following the 2008 recession — long past Vallas’ time at Chicago schools.

“The Chicago teachers’ retirement system was extremely healthy,” Vallas said of his time at CPS. “Things really begin to deteriorate three or four years later, when the earnings drop and they do a pension holiday during the Great Recession — at the absolute wrong time to be doing a pension holiday. That impacted all the systems … So when people try to say that somehow I was responsible, it’s hogwash.”

Over the last few years, property taxes were added back as a source to help cover teacher pension payments, and actuarial funding benchmarks have helped ensure better payments. But the fact that CPS stopped automatically pumping property tax revenues into teacher pensions to supplement the regular employee contributions during Vallas’ tenure remains a point of contention.

“His track record is one of claiming he is a financial wizard, but the results for the people who do the work are terrible,” said Kurt Hilgendorf, the legislative and political director of the Chicago Teachers Union, which is backing Cook County Commissioner Brandon Johnson, a longtime CTU organizer, for mayor.

But Vallas said in addition to not being his fault, freeing up the money brought years of labor peace and flexibility to expand large after-school and summer-school programs.

“Hindsight’s a great thing 20 or 30 years later,” Edgar said about the criticism of Vallas. “It doesn’t mean I agree with everything he says or does, but I just thought he was a very positive change in the Chicago schools.”

On to Philadelphia

After leaving CPS, Vallas made his first bid for public office in 2002. But he lost the Democratic primary for Illinois governor to Rod Blagojevich, who hammered Vallas during the campaign over some of his moves to privatize CPS. Following the loss, Vallas moved to Philadelphia where for five years he ran the schools there, bringing accolades for successes, including rising student test scores, but also brickbats on his way out.

In Philadelphia, he built after-school programs for students falling behind, expanded privatization in the public schools and sought to address problems of disruptive schoolchildren. But near the end of his time, a $73.3 million hole emerged in the district’s budget, a disclosure that didn’t sit well with Philadelphia’s city leaders and led to cuts, including layoffs, according to reports.

Vallas said in an interview he had only one budget deficit across six fiscal years at Philadelphia but fixed it before he left.

When leaving to go to New Orleans in 2007, Vallas — still stinging over the budget dispute — stiffed a festive goodbye ceremony where the Philadelphia School Reform Commission had planned a resolution honoring his tenure, the Philadelphia Inquirer reported.

In an interview, Vallas acknowledged “they wanted to give me honors” but said he was “exhausted, quite frankly” and prepping to go immediately to New Orleans.

His departure ended with mixed reviews. While local editorials said his “strengths are much greater” than his weaknesses, politicians such as the former mayor were also quick to criticize.

“Nutter was praising me when I was there,” Vallas said last week. “Anyone can find anyone to say just about anything.”

While in Philadelphia, Vallas came into contact with education consultant Gary Solomon, who later ended up in a kickback scandal that landed former CPS CEO Barbara Byrd-Bennett in federal prison. Solomon himself was sentenced to prison for orchestrating kickbacks for Byrd-Bennett, Mayor Rahm Emanuel’s former CPS CEO, after she steered $23 million in no-bid contracts to Solomon’s principal training firm.

When Solomon was an officer at The Princeton Review, the Philadelphia school district Vallas ran was a client. Vallas worked again with Solomon when the state of Louisiana also hired The Princeton Review to help get employees paid. Vallas said he was not involved in recommending the group for the work.

At one point, Solomon launched a consulting firm that touted itself as connected to the “Vallas model” of school reform. Vallas, who had no formal links to Solomon’s firm, chastised him at the time for trying to capitalize on Vallas’ reputation. Vallas said last week he was “uncomfortable” with Solomon, did not contract with Solomon’s own firms and did not play a role in Solomon working with CPS.

“That has nothing to do with me,” Vallas said.

‘My reputation is what it is’

Going to New Orleans in 2007 following Hurricane Katrina to oversee the Recovery School District, which ran a portion of the city’s schools, seemed like a natural for Vallas to burnish his image as a trouble shooter.

With largely unprecedented authority and money pouring into post-Katrina New Orleans, Vallas embraced that district’s extensive use of charter schools. Vallas’ overall moves drew plaudits from then-Louisiana Superintendent of Education Paul Pastorek for far-reaching progress, including bolstering test scores, and Vallas even got praise from then-President George W. Bush, a Republican.

But others said there were gaps in school coverage, and Lance Hill, the co-founder of the now-shuttered Southern Institute for Education and Research at Tulane University, said Vallas’ embrace of a vast expansion of charter schools after Katrina helped make the education system “more divided than it was before.”

Hill in an interview said he saw students with special needs “drop through the cracks” because they did not get all of the programs that addressed their issues.

“The people that were the least advantaged suffered even more,” said Hill.

Nearly four years after he arrived in New Orleans, Vallas left to remake schools in earthquake-ravaged Haiti and Chile.

“The document that Paul produced was the clearest, most practical, most doable plan to reform Haiti’s education system that I have ever seen,” said Conor Bohan, founder and executive director of HELP, Haiti’s largest university scholarship program. But Bohan said it suffered from lack of funding.

Vallas said he took about 40 trips to Haiti and was hospitalized three times. By 2011, he started helping earthquake-damaged schools in Chile through his consulting firm.

By the end of 2011, Vallas headed to Bridgeport, Connecticut, but he left about two years later following fights over his state qualifications despite his extensive experience, and with a divided local school board. The Hartford Courant noted even a Vallas supporter who praised his accomplishments at the district acknowledged Vallas was a “polarizing figure.”

Upon leaving Connecticut, Vallas returned to Illinois and became the running mate of Democratic Gov. Pat Quinn in 2014, a contest the pair lost to Republican Bruce Rauner. In the race for mayor, Quinn has not endorsed Vallas but rather Garcia.

Following the statewide loss, Vallas helped the U.S. Justice Department put together and launch a consolidated prison education project, including plans to help those transitioning out of prison life get jobs.

He worked on the project through the Chicago-based Bronner Group, which was prequalified to do federal contracting. Vallas said the program was “gutted” under the Trump administration, but he said he did additional work as a Bronner consultant for various education projects.

Seemingly everywhere Vallas turns, one of the other candidates for mayor has a story about him, including state Rep. Kambium “Kam” Buckner.

Rauner, while he was governor, appointed both Vallas and Buckner to the board of trustees for Chicago State University, and Vallas soon wound up as the temporary chief administrative officer there. In early 2018, Chicago State University parted ways with Vallas after it was revealed he planned to leave the temporary job to run for Chicago mayor in 2019. Trustees voted unanimously to terminate Vallas, who at the time said he felt the attacks were politically motivated.

Buckner recently issued a news release to note that he voted to fire Vallas, saying he used the CSU job to help build up his bona fides for the 2019 mayoral bid. “He came in with a lot of plans and charts and numbers, and we saw no progress,” Buckner said.

Vallas, however, offered a different version of events in an interview last week. He said he’d already handed in a resignation letter in November detailing he planned to leave in February 2018 and he called the board’s action a political “stunt” aimed at hurting his mayoral bid in 2019.

“I have always focused on public service,” he said. “Public service has always been my priority. I’ve thought of nothing else, and that’s what I’ve always done. My reputation is what it is. I’ve always given my all, which is why some of the jobs have literally killed me.”

rlong@chicagotribune.com

gpratt@chicagotribune.com