Aldermen Urging Chicago Public Schools CEO Pedro Martinez to Ensure $175M Pension Payment or Face Budget Imbalance

CHICAGO (WLS) — The funding feud between Chicago Public Schools and the mayor’s office over a $175 million pension payment is heating up.

More than two dozen City Council members have signed on to a letter to schools CEO Pedro Martinez demanding that CPS make the payment.

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City aldermen have expressed concern that if the city does not receive the $175 million by the end of the month, it will lead to an unbalanced budget. This imbalance could ultimately result in increased costs for taxpayers in the future.

In the previous fall, the city fronted the pension payment for non-teacher CPS employees with the expectation that CPS would reimburse the city the $175 million. However, this reimbursement has not yet materialized.

Budget Committee Chairman Jason Ervin is now spearheading an effort to pressure Martinez to act.

Ervin was gathering signatures on a letter to Martinez demanding CPS come through on that payment by March 31.

Ervin expressed disappointment by stating, “The CEO assured us that the payment would be made. However, it appears that there has been a reluctance to follow through on that commitment. As a result, the city of Chicago may have to allocate an additional $175 million for a group of employees who are not under our jurisdiction.”

All this comes as CPS is trying to close its contract negotiations with the Chicago Teachers Union, and as the School Board has scheduled public hearings this week on an amended budget.

Martinez, in a recent letter to CPS families, said the district only has $139 million left in its budget this year, adding, “my administration will prioritize using our remaining funds from this school year on labor agreements.”

Without the CPS payment, the city would have an imbalanced budget, which could cause a financial downgrade, which means taxpayers are on the hook for higher interest payments.

“Well, I’ve never seen this happen before, where we were short by any amount. And, you know, it’s unfortunate, because it just shows the complete mismanagement by this administration,” 32n Ward Ald. Scott Waguespack said.

“Ultimately, you’ll be up to Mayor Johnson, have the conversation with the folks he appointed on that board. Again, it ends up being a little too gray area for me to put my signature on a letter. I do think that CPS needs to figure out how to be a responsible body,” Ald. Andre Vasquez said.

Late Wednesday afternoon the mayor weighed in.

“There are efforts to disentangle these leanings that have been relied upon for a very long time. It’s very clear that these particular employees that are hired by Chicago Public Schools that it’s important that their retirement is secured,” Johnson said.

By disentangle, the mayor is referring to separating CPS and the city’s financial connections that would have the school district handle its own pension payments, which for years the city had taken on.

Thursday and Friday, CPS will host public hearings on amending its budget.