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Seven Chicago School board members say they oppose a plan to allow Chicago Public Schools to reimburse the city for a highly disputed pension payment — kneecapping for now the city’s efforts to close its budget books.
The declaration from the seven members — in a letter obtained by Chalkbeat and sent to board President Sean Harden on Saturday — means the city does not have enough support from the Board of Education to get the $175 million it is seeking from Chicago Public Schools. Reimbursing the city would require a vote from the board to amend CPS’s budget, and such an amendment needs two-thirds approval — or 14 yes votes — from the 21-member board.
The board president does not vote unless there is a need to break a tie. Harden did not immediately return a call for comment. A spokesperson for the mayor’s office could not immediately be reached.
“We cannot in good conscience make payments towards things for which we have no sustainable means of raising revenue,” said the letter signed by elected board members Jessica Biggs, Therese Boyle, Jennifer Custer, Angel Gutierrez, Carlos Rivas Jr., Ellen Rosenfeld, and Che “Rhymefest” Smith. The group has so far emerged as a faction of the board that has sometimes been critical of policies favored by Mayor Brandon Johnson, who appointed 11 of the 21 board members.
The pension reimbursement has been a major subject of debate between city and school district officials for months. For several board members, the idea of making cuts, borrowing money, or restructuring debt to cover the payment — which has been floated by City Hall and, more reluctantly, an independent consultant — has been a nonstarter.
“As a body entrusted to govern the Chicago Public Schools, its teachers, staff, and students, it is important to make decisions that are in the best interest of the district and in line with our fiduciary responsibilities,” the letter said. “Any terms brought forth that suggest more borrowing and the addition of more debt to the district is not financial best practice and creates further risk to the district.”
The issue centers around a pension fund the City of Chicago is legally obligated to fund, which covers, in part, retirement for CPS staffers who are not teachers. CPS began contributing to the pension fund under an agreement with former Mayor Lori Lightfoot. Johnson continued that practice, but CPS CEO Pedro Martinez has resisted reimbursing the city this fiscal year as the district faces financial challenges.
That resistance has become so charged that it helped cost Martinez his job.
In the letter, the seven board members say they will partner with the city in lobbying the state so CPS can levy taxes in order to cover the pension payment in the future.
“We see an opportunity to work together to create more responsible budgeting on these issues in the future, and look forward to those conversations,” the letter said. “We understand that the financial entanglement between the City and CPS are vast and intricate.”
The City of Chicago must close its current budget by the end of this month and needs the reimbursement from CPS or must turn to another fix, such as dipping into its reserves, which the city argues could result in a bond rating downgrade and make it harder to borrow in the future.
The district appears close to settling a new contract with the Chicago Teachers Union, and Martinez has said he wants to ensure the district has the funding to pay for additional labor costs. CPS — which did not budget for pension payment or union contract costs — would need to receive more funding from another source, make cuts, or refinance its debt in order to make the payment, according to the outside consultant’s report.
The city has provided the district with an additional $139 million in surplus Tax Increment Financing, or TIF, dollars, which come from special taxing districts meant to spur development. The district was set to amend its budget last week in order to accept the additional funding and earmark it toward the pension reimbursement and labor contracts with teachers and principals. That additional money is not enough to cover all of the district’s upcoming costs.
However, amid ongoing contract negotiations and pushback from several board members who don’t want to reimburse the city, Harden tabled the amendment.
The letter says the listed board members will vote yes on a budget amendment that allocates the $139 million toward new union contracts for teachers and principals.
Reema Amin is a reporter covering Chicago Public Schools. Contact Reema at ramin@chalkbeat.org.
