(Adds comments from Chicago mayor, Illinois education secretary, state school board association head, and Columbia University professor)
By Karen Pierog and Dave McKinney
CHICAGO, Feb 14 (Reuters) - The Chicago Public Schools sued Illinois on Tuesday claiming the state's method of education funding discriminates against its largely black and Hispanic student body.
The lawsuit, filed in Cook County Circuit Court, uses the state's Civil Rights Act to seek to invalidate Illinois' school funding system. The district wants to avoid the fate of previous school funding lawsuits that faltered in Illinois, which like CPS is reeling from deep financial problems.
Chicago Mayor Rahm Emanuel, who controls CPS, said the state funding formula is "in violation of the civil rights of our children."
"It penalizes poor kids in poor school districts and rewards wealthy kids in wealthy school districts - just the opposite of what we should do," Emanuel told reporters.
CPS officials have been critical of a move last year by Republican Governor Bruce Rauner to veto a bill that would have provided the district with $215 million in state money for pensions. The move punched a hole in the district's already shaky budget, leading to spending cuts and unpaid furlough days for teachers.
The nation's third-largest public school system is struggling with pension payments that will jump to $733 million this fiscal year from $676 million in fiscal 2016, as well as drained reserves and debt dependency. The fiscal woes have pushed its general obligation credit ratings deep into the junk category and led investors to demand fat yields for its debt.
The lawsuit also seeks to invalidate Illinois' system for funding teacher pensions. CPS has railed against how it must maintain and fund its own teachers' pension system, while districts in the rest of Illinois are in a state-wide retirement fund that is heavily subsidized by the state.
The lawsuit comes on the heels of a recent attempt to revamp the way Illinois funds schools and the willingness by state Senate leaders to include a new funding formula in a bill package to end the state's nearly 20-month budget impasse.
School funding has been a politically volatile subject in Illinois for decades, pitting low property tax-generating school systems or those with mostly minority students against well-funded systems in wealthy Chicago suburbs much less reliant on state funding. Since the 1970s, the sides have played to a political stalemate in the state legislature, which has rejected efforts at a statewide fix to solve the disparity between the haves and the have-nots in Illinois education.
The social ramifications of the debate came to a head in 2008, when nearly 2,000 Chicago school students boarded buses bound for one of Illinois' wealthiest, highest-achieving school districts in Chicago's north suburbs and demanded to be enrolled.
The move orchestrated by advocates of Chicago's public schools and several ministers made its visual point clearly but did nothing to advance the cause for more equitable school funding in Springfield, Illinois' capital.
Illinois Secretary of Education Beth Purvis said a report released on Feb. 1 by a bipartisan commission "recommends an equitable school funding formula that defines adequacy according to the needs of students within each school district."
"The governor remains focused on moving forward these recommendations and hopes that CPS will be a partner in that endeavor," Purvis said in a statement.
Language on how to achieve that adequacy or how to come up with an additional $3.5 billion for schools over 10 years, as the report recommended, has yet to surface in the legislature.
General state aid to CPS in fiscal 2017 totals $952.5 million, about the same amount as in fiscal 2016, according to the district's budget.
For 40 years, Illinois courts generally have ruled that arguments to change how public schools are funded should play out before the Illinois legislature, not in the state's courtrooms. Based on that string of rulings, a prominent public education advocate in Illinois described the Chicago school litigation as a legal long-shot.
"I think any time you have this kind of history, it suggests that it's a very difficult bar to overcome. Having said that, I think we're always hopeful something will happen that will cause the inequity issue to be addressed," said Roger Eddy, executive director of the Illinois Association of School Boards and a former state lawmaker and school superintendent.
Civil rights group the Chicago Urban League along with some parents from various districts including Chicago also sued the state over school funding using the Civil Rights Act. That lawsuit has languished in Cook County Court since 2008.
CPS CEO Forrest Claypool told reporters that his district's case was "very straightforward."
"I'm not aware of another case like it because I'm not sure there is any place in the country in which the state government itself choosing to fund public education says we are going to give significantly less money to African-American and Latino children in the largest school district in the state and we are going to give a lot more money to the predominately white children in the rest of the state," he said.
Michael Rebell, a professor at Columbia University's Teachers College, who tracks school funding litigation, said plaintiffs have prevailed in 23 states since 1989, while Illinois is one of 16 states where funding challenges have failed. (Additional reporting by Timothy McLaughlin in Chicago; Editing by Matthew Lewis)