Education
Facing Intense Opposition, CPS Board Calls Off Vote to Make $175M Pension Payment as Contract Talks Continue
Chicago Board of Education leaders called off a vote Thursday to cover a $175 million pension payment amid implacable opposition, dealing a significant blow to Mayor Brandon Johnson and threatening the city’s financial stability.
Board President Sean Harden said the measure that would allow the Chicago Public Schools to make that pension payment and pay for new contracts would come back to the board “at a later date.”
Harden linked the decision to call off the vote with what he called “considerable progress” in negotiating a new contract with the Chicago Teachers Union, which he said was “extremely close” to being resolved.
“I’m very pleased with the progress to steady the ship and we hope to be able to come back very soon with that result,” Harden said.
Mayor Brandon Johnson said in a statement that the vote to amend CPS’ budget would be postponed until an agreement on a new contract with CTU is reached.
“Board members have expressed a desire for clarity on the final cost of the contract before voting on the budget amendment,” Johnson said. “The board president is confident that the two sides are very close to coming to an agreement, and I share his confidence. A contract agreement is critical to the stability of our schools and communities.”
Johnson also said President Donald Trump’s decision to issue an executive order Thursday to begin dismantling the U.S. Department of Education played a role in Harden’s decision to delay the vote.
“We want to ensure that our school district and our teachers are fully aligned and that we are doing everything we can to protect our students and protect our schools from harmful policies and potential budget cuts,” Johnson said.
The decision to delay the vote is an acknowledgment that budget amendment does not have at least 14 of the 21 votes it needs to pass the CPS Board, even after Johnson used the full force of his office to publicly press the board to approve the revised budget and make the pension payment.
If the CPS board refuses to reimburse the city for making the required payment into the pension fund that includes 23,166 employees of CPS who are not teachers, the city could be forced to dip into its reserves to ensure that it can close the books on the 2024 fiscal year no later than March 30.
Pressed repeatedly by reporters on Tuesday, Johnson declined to say what he would do if the CPS board refused to make the pension payment Chicago officials say it is required to make by the state law that ended mayoral control of the school district.
Twenty-eight members of the Chicago City Council signed a letter warning the CPS board that if they balk at making the pension payment, city officials would have no choice but to reconsider spending $1.2 billion in city funds annually on CPS programs, including $319 million in school construction and rehabilitation projects.
Ald. Jason Ervin (28th Ward) made that threat explicit in a column published Wednesday in the Chicago Tribune.
“It would be near impossible to convince council members next year to give CPS anywhere near the dollars that we appropriated for the past two budgets if district officials were to turn their backs on us now,” Ervin wrote.
The budget amendment the CPS board did not consider Thursday would have allowed it to spend an additional $139 million sent to CPS from the city’s tax-increment financing districts by Johnson. But that is not enough to make the pension payment or pay for new employee contracts, leaving the district approximately $240 million in the red, according to Chicago’s Chief Financial Officer Jill Jaworski.
The best solution to CPS’ cash crunch is for the district to essentially borrow $240 million by refinancing current debt, Jaworski said. The district already has $9.3 billion in debt, according to district records.
Jaworski outlined three scenarios for reporters that called for CPS to refinance $240 million and pay off that debt over three years, five years or 10 years.
That debt would cost CPS taxpayers $18 million if paid off in 2028, $30.3 million if paid off in 2030, or $64 million if paid off in 2034, assuming an interest rate of approximately 4.85%, according to WTTW News’ calculations.
Jaworski said CPS would be able to absorb those payments because it is set to see its property tax revenues rise significantly as nearly four dozen tax-increment financing districts are set to expire.
The budget crisis threatening to overwhelm the third largest school district burst into public view nearly six months ago when Chicago Public Schools CEO Pedro Martinez said he refused Mayor Brandon Johnson’s request to resign.
Johnson has consistently urged CPS to borrow to cover those costs, but Martinez called the proposal backed by the mayor “exorbitant” and fiscally irresponsible.
The final act of the CPS Board made up of members appointed by Johnson was to fire Martinez without cause, leaving him in office until June.
Despite the deep breach between the two men, both Johnson and Martinez have ruled out layoffs, cuts or furloughs to CPS operations. CPS cannot raise property taxes high enough or quickly enough to cover the gap, leaving borrowing or cuts the only options.
In October, Johnson declared $570 million in the city’s TIF districts to be in surplus for 2025, a record-breaking amount that is 31% bigger than 2024’s surplus, which set the previous record.
That sent $311 million to CPS, with the rest heading to other taxing agencies.
CPS’ budget already relies on $172 million from the city’s TIF surplus, and its 2025 budget earmarked those revenues to cover the cost of the recently ratified SEIU Local 73 contract and the district’s operations.
A hastily scheduled meeting Wednesday afternoon at City Hall between Johnson, Martinez and Chicago Teachers Union President Stacy Davis Gates failed to result in a deal.
Even after Johnson said he believed an agreement could be reached before Thursday’s board meeting, no deal has yet been finalized.
The high-profile meeting is the first public indication of Johnson’s direct involvement in contract negotiations between CPS and CTU. Johnson is a former middle school teacher and organizer for the CTU who rose to prominence during the 2012 strike during former Mayor Rahm Emanuel’s time in office.
Johnson has repeatedly pressed school district officials to borrow money to cover those costs, while Martinez has called the proposal backed by the mayor “exorbitant” and fiscally irresponsible.
The final act of the CPS Board made up of members appointed by Johnson was to fire Martinez without cause, leaving him in office until June.
Despite the deep breach between the two men, both Johnson and Martinez have ruled out layoffs, cuts or furloughs to CPS operations. CPS cannot raise property taxes high enough or quickly enough to cover the gap, leaving borrowing or cuts the only options.
One of the major sticking points preventing a deal between CPS and CTU involves the amount of time elementary school teachers have to plan and prepare while on the clock.
The last offer from CPS leaders would give teachers 10 minutes of additional prep time, while the union is insisting on 20 more minutes of prep time, after reducing its initial demand of 30 more minutes.
Negotiators have also failed to reach an agreement on teacher evaluations and pay increases for tenured teachers.
Johnson told reporters Tuesday he supported the union’s call for more paid preparation time for teachers.
Contact Heather Cherone: @HeatherCherone | (773) 569-1863 | [email protected]
