The Latest: Fitch downgrades Chicago schools' credit rating

CHICAGO (AP) - The latest on Illinois Republicans proposing a state takeover of Chicago Public Schools (all times local):

1:55 p.m.

A major credit rating agency has downgraded Chicago Public Schools' rating deeper into "junk" status.

Fitch Ratings on Wednesday lowered the rating to B-plus, citing the district's multimillion-dollar budget deficit and huge unfunded pension liabilities. The previous rating was BB-plus.

The move comes as Republican Gov. Bruce Rauner and GOP lawmakers pitch legislation to allow the state to take over the nation's third-largest school district. But the idea was immediately shot down by Democrats, including Chicago Mayor Rahm Emanuel.

Fitch Ratings says that without action, CPS could deplete its reserves by the end of the next fiscal year and "likely exhaust available lines of credit."

CPS is scheduled to issue $875 million in bonds next week.

Standard & Poors also lowered the district's rating last week.

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1:15 p.m.

Chicago Public Schools officials say top Republicans' proposal for a state takeover of the nation's third-largest school district is a "sideshow" to school funding formula problems in the state.

Senate GOP Leader Christine Radogno (rah-DOH'-nyoh) and House Republican Leader Jim Durkin pitched the takeover idea Wednesday as a "lifeline" for the financially struggling school district.

Chicago officials object to the state's school funding formula, which they say is unfair. Republicans have dismissed those claims.

In a Wednesday statement, schools CEO Forrest Claypool said that that the real need is to fix the school funding formula to make it more equitable.

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11:30 a.m.

Gov. Bruce Rauner says that if Illinois takes over Chicago Public Schools, he'll stand up to the teachers' union on contract negotiations.

The first-term Republican governor said Wednesday that he backs a proposal to allow a state-appointed board to take over operations of the nation's third-largest school district. An appointed authority would have the ability to negotiate new contracts.

The Chicago Teachers Union is locked in contentious negotiations with school officials. The union went on strike in 2012, its first walkout in 25 years.

Rauner accused Chicago Mayor Rahm Emanuel of caving on contract negotiations then and says Emanuel is set to do so again.

Emanuel's spokeswoman said the mayor is "100 percent opposed" to the plan and criticized Rauner for failing to agree with Democrats on a state budget for the current fiscal year.

The CTU called the proposal the latest of example where Rauner "clumsily attempts to lead."

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10:45 a.m.

While announcing a proposal to allow a state-appointed board to take over Chicago Public Schools, top Illinois Republicans say they're also considering a bankruptcy plan for the nation's third-largest district.

Senate GOP Leader Christine Radogno (rah-DOH'-nyoh) and House Republican Leader Jim Durkin wouldn't give many details on the bankruptcy plan on Wednesday. Radogno says it was prompted by ongoing fiscal problems.

The takeover proposal says the Illinois State Board of Education would create an authority to act largely as a school board, including negotiating teachers' contracts. However, Republicans said the authority couldn't "unilaterally cancel or modify existing collective bargaining agreements."

Radogno and Durkin acknowledged the uphill battle in the Democratic-controlled House and Senate, saying it was up to Democratic leaders who've already blasted the plan.

A handful of Illinois districts have been taken over, including East St. Louis in 2012, though it was fought.

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9:50 a.m.

The Democratic leader of the Illinois Senate says a GOP plan for the state to take over Chicago Public Schools "is not going to happen."

Senate GOP Leader Christine Radogno (rah-DOH'-nyoh) and House Republican Leader Jim Durkin announced the legislation Wednesday morning. Radogno says it would be a "lifeline" for the financially struggling school district.

Illinois Senate President John Cullerton says in a statement that the plan backed by Gov. Bruce Rauner is "mean spirited and evidence of their total lack of knowledge of the real problems facing Chicago Public Schools."

Cullerton says the "ridiculous" idea is distracting Republican leaders from other state issues.

The nation's third-largest school district is facing a nearly $1 billion budget deficit, due largely to pension debt.

CPS officials and Cullerton say the state should help fund pensions for Chicago teachers, as it does for teachers outside of the city.

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9:05 a.m.

A spokeswoman for Chicago Mayor Rahm Emanuel says he is "100 percent opposed" to a plan from Republicans in the Illinois Legislature that would have the state take over the financially troubled Chicago Public Schools.

Spokeswoman Kelley Quinn says if GOP Illinois Gov. Bruce Rauner wanted to help Chicago students he would pass a state budget that "fully funds education and treats CPS students like every other child in the state."

Senate and House GOP leaders are to announce the legislation on Wednesday morning. Rauner is expected to say he supports it later Wednesday.

Emanuel is in Washington on Wednesday to attend the U.S. Conference of Mayors annual meeting. The mayor wants the state to pick up the cost of CPS teacher pensions, as it does for school districts outside of Chicago.

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8:45 a.m.

Top Republicans in the Illinois Legislature plan to call for a state takeover of the financially troubled Chicago Public Schools.

Senate GOP Leader Christine Radogno (rah-DOH'-nyoh) and House Republican Leader Jim Durkin are scheduled to announce the legislation Wednesday morning.

A Republican official with knowledge of the plan says it would allow the Illinois State Board of Education to take control of CPS. The official says GOP lawmakers also are considering a bankruptcy plan for CPS and the city of Chicago, though that will not be part of the legislation introduced Wednesday.

The official spoke on condition of anonymity because the person wasn't authorized to pre-empt the public announcement.

GOP Gov. Bruce Rauner is expected to announce his support for the plan later Wednesday.

The measure will likely face stiff opposition in the Democratic-controlled Legislature.

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2 a.m.

Illinois Senate Republican Leader Christine Radogno and House Republican Jim Durkin are to talk about legislation they will introduce dealing with the city of Chicago's and its public schools' fiscal crisis.

Radogno and Durkin have scheduled a news conference in Chicago on Wednesday to talk about their plans.

It comes as school officials and the Chicago Teachers Union continue with negotiations on a new contract.

The public schools system has increasingly borrowed money to pay for operations and is counting on millions in state funding lawmakers haven't approved. CPS also faces escalating pension contributions.

As a result, rating agencies have lowered the district's credit rating, meaning it faces higher borrowing costs on bonds it plans to issue next week.

The city of Chicago also has fiscal difficulties, including billions of dollars in unfunded pension obligations.