Education

As CPS Board Balks at Making $175M Pension Payment, New Contract With Teachers Remains Out of Reach

One week ago, Mayor Brandon Johnson told reporters he was confident two things would happen in short order.

First, nearly a year of high-stakes negotiations with the Chicago Teachers Union would culminate within hours, if not days, in a new deal with the 25,000-member labor organization that reflects his vision for the nation’s fourth-largest school district, Johnson told reporters.

And then a new 21-member, partially elected Chicago Board of Education would vote to cover a $175 million pension payment and figure out how to pay for new contracts with the unions representing teachers and principals.

As of Wednesday afternoon, neither has happened.

That leaves Johnson — who campaigned on promises to transform CPS into a school district that offers a well-rounded education to every Chicago child and security to its employees — caught in another bruising political battle that has, once again, frustrated his allies and emboldened his critics.

Senior Johnson administration officials told reporters Tuesday that they were no longer counting on CPS to reimburse the city for making the required payment into the pension fund that includes 23,166 employees of CPS who are not teachers by Sunday. CPS is required to make that payment under the terms of an intergovernmental agreement that ended mayoral control of the school district, according to city officials.

A scheduled vote by the Chicago Board of Education on a proposal to amend CPS’ budget for the current academic year was called off March 20 after it was clear it did not have at least 14 of the 21 votes it needed to pass.

Two days after the shelved vote, seven board members sent a letter to Board President Sean Harden vowing to reject Johnson’s plan to essentially borrow $240 million by refinancing current debt to cover the cost of the pension payment and the new labor agreements, as first reported by Chalkbeat Chicago.

The district already has $9.3 billion in debt, according to district records.

City officials had been warning for months that any refusal by CPS to cover the pension payment by the end of March would force the city to dip into its reserves to ensure that it can close the books on the 2024 fiscal year in the black, a move that could drain the city’s emergency fund and prompt Wall Street ratings agencies to downgrade the city’s credit rating, threatening Chicago’s financial stability.

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.

“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,” Ald. Jason Ervin (28th Ward) wrote in a column published March 19 in the Chicago Tribune.

But senior administration officials downplayed the ramifications of CPS’ refusal to reimburse the city for the $175 million pension payment it has already made on Tuesday, despite Johnson’s full-court press just one week ago.

There is no need to ask the Chicago City Council to approve plans to move money within the city’s budget to account for CPS’ refusal to reimburse the city, officials said. The city’s final accounting of its finances in 2024 won’t be finalized until the late spring or early summer, when its annual financial report is compiled.

“We have sufficient liquidity to meet our obligations,” officials said.

That brought an immediate objection from at least 18 members of the City Council, who urged Johnson to come back before them to craft a solution. If Johnson declines, his deeply fraught relationship with many members of the City Council, including some of his allies, could reach new lows, sources told WTTW News.

While Johnson has consistently urged CPS to borrow enough money to make the pension payment and cover the new cost of contracts with the unions representing the teachers and the principals, Chicago Public Schools CEO Pedro Martinez has refused, calling the mayor’s proposal “exorbitant” and fiscally irresponsible.

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 as the only apparent option.

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 Johnson’s direct involvement in contract negotiations between CPS and CTU, a deal remains out of reach. Johnson is a former middle school teacher and organizer for the CTU who rose to prominence amid the 2012 strike during Emanuel’s time in office.

The last major sticking point preventing a deal between CPS and CTU involves the amount of time elementary school teachers have to plan and prepare while on the clock, CTU officials told reporters Wednesday.

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. That initial demand would restore the amount of paid prep time elementary teachers had before former Mayor Rahm Emanuel lengthened the school day.

Elementary teachers now get one 60-minute prep period per day and two additional 15 minute prep periods per week, according to district official

The district has proposed giving every teacher 70 minutes of paid prep time every day while “reallocating the two 15-minute paid prep periods and adding 20 additional paid prep minutes per week,” according to district officials.

“This is the most additional prep time that CPS can propose without negatively impacting classroom instruction time,” according to the CPS statement.

CPS cannot afford to hire more staff to give elementary school teachers more paid prep time, according to district officials.

CTU officials have repeatedly blamed Martinez for the failure to ink a deal, saying he has stalled negotiations.

Martinez has been working diligently to reach a “fair contract resolution that recognizes the significant contributions of our educators while being mindful of our budgetary limitations and fiduciary responsibilities,” according to a statement from a CPS spokesperson.

“CPS is disappointed in the manner in which CTU continues to make false claims against the district and the issues remaining on the table,” according to the statement. “CPS will continue to work in good faith, and we look forward to presenting a final agreement for approval to the Chicago Board of Education that supports staff and prioritizes students as outlined in the District’s five-year strategic plan.”

Negotiators have also failed to reach an agreement on teacher evaluations and pay increases for tenured teachers.

While CTU leaders contend the district’s evaluation system discriminates against Black teachers, CPS officials said there is no evidence that is true.

CPS’ current proposal would offer teachers raises of 4% to 7.5% in the first year and 4% to 8.5% each during the remaining three years of the deal, district officials said.

But CPS “simply can’t afford to comply with demands that would mean another $9 million in costs over the four-year contract” by raising teacher pay, district officials said.

Johnson has told reporters he supports the union’s call for more paid preparation time for teachers.

Contact Heather Cherone: @HeatherCherone | (773) 569-1863 | [email protected]

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