Chicago Schools Broke?

Mish Shedlock has another story out about how government is broke and union workers are selfishly asking for pay raises in the face of these fiscal catastrophes.

http://globaleconomicanalysis.blogspot.com/2010/02/chicago-public-schools-system-is-broke.html

But before proclaiming that a governmental body is "broke", Mish should take the time to review that body's latest Consolidated Annual Financial Report (CAFR) in order to determine their asset & liability as well as expense & revenue position. The Chicago School system CAFR can be found at:

Comprehensive Annual Financial Report for the Year Ended June 30, 2009
http://www.cps.edu/About_CPS/Financial_information/Pages/Annualreport.aspx

A quick look at the Chicago School system CAFR illustrates that there is obviously a problem meeting long term liabilities, but this is clearly not an "emergency" situation. Saying they're "broke" does not properly put the actual figures in context. Why not simply state the financial case?

2009 CAFR (page 22)
2009 Total Revenue $5.245B
2009 Total Exp = $5.590B

2009 CAFR (page 20)
Net Assets, Current = $2.549B
Net Assets, Total = $(446)M

Chicago schools clearly have enormous revenues, exceeding $5B annually, and simply need to bring expenses into alignment with revenues.... about a 5% adjustment will solve this. They have a significant positive short term asset balance, satisfying any short term bills that might be due, and their long term asset balance is negatve by an amount approximately equal to 10% of their annual expenses. These are not huge imbalances. Sure, these are issues that must be resolved, but this can be accomplished with some deliberation and financial prudence. There is no need to raise alarm bells, unless one is trying to drive fear and create false impressions in the eye of the public.

Overall, it's very disappointing to see Mish pushing this kind of propaganda when a serious financial analysis of the situation only takes a few minutes. In the end, this rhetoric helps to build resentment against Union labor, and therefore I am left to wonder where Mish's loyalties really lie.

Finally, this same simple analysis can be completed with all governmental bodies that make sweeping statements about their financial statements. California, for example, has Billions in net assets that they do not communicate to the public.