CPS Officials Urge Payment of $175M Pension Obligation Following Conclusion of Public Hearing on Budget Amendment

CHICAGO (WLS) — The battle is heating up between Chicago Public Schools and City Hall over making a pension payment or finalizing new contracts with teachers and principals.

It’s turning into a war of words over who promised what and who’s going back on their word.

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The CPS Board wrapped up two days of public hearings on an amended budget on Friday, ahead of next week’s Board of Education meeting.

All of this comes as City Hall is ramping up pressure on a cash-strapped CPS to pay the city back for a $175 million pension payment.

There has been a lot of finger-pointing between Chicago Mayor Brandon Johnson and CPS CEO Pedro Martinez over money tied to a pension payment for non-teacher employees at CPS.

The city made the $175 million pension payment last fall with the understanding that CPS would pay the money back.

“I’m expecting the CEO to pay for all of his expenses,” said Cristina Pacione-Zayas, the mayor’s Chief of Staff.

RELATED | Chicago Public Schools Board holds public hearing on budget amendment

The school funding feud goes back to October 16, when Martinez appeared before the City Council’s education committee, talking about the budget.

“So even if we did a TIF surplus to cover that $375, are you committing to reimbursing us $175 toward that pension payment,” 9th Ward Ald. Anthony Beale asked at the time.

“Absolutely, alderman,” Martinez replied.

Those figures are in millions of dollars. The dilemma for the district is it only has enough money to pay for a new contract for the Chicago Teachers Union and the principals, or to repay the city for the pension payment.

On Wednesday, Mayor Johnson deflected when asked what the city’s contingency plan would be if CPS does not come up with the money.

“He made a promise and so it’s incumbent upon him to keep to his word,” Johnson said.

Martinez explained to the Board of Education, during amended budget hearings the past two days, that the promise was contingent on getting millions more in TIF money.

“The commitment was based on the request for 484 [million in TIFs], and then in the end when the City Council passed their final budget then the amount came in very short of that, $299 million,” Martinez said.

ABC7 pressed the mayor’s Chief of Staff on what the city would do if CPS does not repay the pension money leaving the city on the hook for the $175 million.

That is his job to take care of his budget, to secure the resources include every single expenditure that he has known,” Pacione-Zayas said.

ABC7 continued to ask if the city is at least making contingency plans if that happens.

“The city is expecting the CEO to do his job,” Pacione-Zayas replied.

ABC7 asked if there is no contingency plan.

“I’m saying that he needs to deliver,” Pacione-Zayas replied.

Now, there is some debate about whether CPS could take out a loan to cover the debt. CPS said it’s not legal, but the mayor’s Chief of Staff contended Friday that it’s not so cut and dried.

The Board of Education will vote on an amended budget next Thursday.