Education

CPS Board Approves District Budget Without Borrowing to Cover $175M Pension Payment

Chicago’s Board of Education has approved a new budget for Chicago Public Schools, rejecting calls from Mayor Brandon Johnson and others for high-interest borrowing to help the cash-strapped district cover a $175 million municipal pension payment it may instead pass on to the city.

The board voted 12-7, with one abstention, late Thursday following a contentious debate between board members who were split on how best to fund city schools while keeping costly cuts out of the classroom.

The spending plan proposed by interim CPS CEO Macquline King relies on non-classroom cuts and $379 million in TIF dollars in order to close a $734 million budget gap. It will also push a $175 million municipal pension payment onto the city, unless CPS can obtain enough outside funding to cover that cost.

Members opposed to the district’s proposal claimed it was based on “assumptions, not facts.” Those in support said taking out a high-interest loan threatens to “shut down the district.”

“I cannot vote yes on a budget that assumes a $379 million TIF surplus, when City Council has not demonstrated the political will to do it,” board member Jitu Brown said.

Johnson had pushed for the loan and recently said he expected CPS to make that pension payment. A previous iteration of his handpicked board fired previous CPS CEO Pedro Martinez after he refused to sign off on such borrowing.

Eleven board members penned a letter to King earlier this month saying it would be “difficult” for them to support the current proposal without the district taking out a loan to cover the cost of the pension payment — something Johnson has repeatedly pushed for.

But King and other CPS leaders have resisted that push, saying it would lead to a “downward spiral” of credit downgrades, higher interest rates and steeper cuts to staff, programs and services. In a letter to families this week, King said the CPS proposal will fully protect individual school budgets and eliminate the risk of cuts to classrooms, both now and later in the school year.

“Throughout this process I’ve been trying to block out the noise to focus on what really matters — the student experience,” King said Thursday.

Ahead of the crucial budget vote Thursday, a majority of the City Council this week penned a letter urging the board members to avoid a high-interest loan while pledging to “support a TIF surplus to help balance both the city and CPS budget.”

CTU President Stacy Davis Gates on Thursday wrote a letter of her own to those alderpeople, asking for them to solidify their commitment. The union believes the city’s TIF surplus is approximately $500 million, and if that amount is handed to CPS, it would not only allow the district to keep its promise to keep cuts out of the classroom, it would help reverse initial cuts to custodial staff, classroom assistants, crossing guards and Safe Passage workers.

Davis Gates said the alderpeople’s letter “feels like a life preserver,” but if they are serious about helping CPS, they need to confirm that commitment through verified documentation to guarantee the TIF funding if coming.

“If they’re playing with us — they’re playing with our emotions, playing politics — if they’re doing any of that, then that would be awfully cruel,” Davis Gates told WTTW News on Thursday. “It would be unnecessary, it would be immature and it would be the opposite of being a leader.”

The CTU issued a statement after the vote saying that approving what they called an “imbalanced budget” will “cost Chicago’s public school students.”

“It will cost them essential special education minutes, regular and consistent hot meals, driver’s education, mental health support, and the protection of Safe Passage and school crossing guards,” the union said. “These cuts will impact schools across this city – from Duke Ellington to Ft. Dearborn to Greeley to Belmont-Cragin Elementary – and they won’t just be felt in our classrooms. They will be felt in our homes.”

Ald. Andre Vasquez (40th Ward), who spoke in favor of the district’s budget plan at Thursday’s meeting, said that forcing CPS to cover the pension payment would be “fundamentally unjust.”

“If anyone has told this board that CPS will not receive TIF surplus funds, or that those funds are contingent on CPS paying the pension payment, let me tell you plainly, it is not true,” he told the board. “They’re lying to you.”

Ald. Jason Ervin (28th Ward) countered that the city is facing its own budget challenges, and if CPS does not make that $175 million pension payment, it would cause “additional and substantial damage.”

“While it may seem (an) attractive and cost-cutting measure, any money saved by foregoing this reimbursement would further burden us all and outweigh any short-term benefit that you may receive,” he said.

King has maintained that there’s no need for an immediate loan, but she acknowledged Wednesday on “Chicago Tonight” that “in the event of an emergency,” CPS does have the “ability and flexibility” to borrow.

Prior to the budget vote, the board added Ángel Vélez, a diversity, equity and inclusion consultant, as its newest member. An appointment of Johnson’s, Vélez fills the vacant seat left by appointed member Frank Niles Thomas, who resigned earlier this summer.

Johnson has said “all options will be on the table” to resolve the district’s budget gap, but has also added that he expects CPS to cover the pension payment. He — along with CPS and CTU leaders — have repeatedly called on Gov. JB Pritzker and Illinois legislators to properly fund the district in line with the state’s funding formula.

“If we are able to then restore those cuts, take the need away from having a loan, then we’re all in Springfield together in veto session going after what we are owed from the governor and the General Assembly,” Davis Gates said.

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