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Chicago school board approves $170 million pension payment

The facade of Chicago Public Schools headquarters, with the district’s sign hanging on the wall behind windows with green silhouettes of students.

During the Chicago Board of Education meeting Wednesday, members narrowly voted to increase pension payments from $100 to $170 million.

Mauricio Peña / Chalkbeat

Chicago Public Schools leaders raised alarms about long-term financial pressures looming for the country’s third-largest district, arguing that like others in the state, it should have the ability to ask its residents to raise their own taxes to pay for operating and building project expenses. 

The wide-ranging discussion came Wednesday as a divided board voted to significantly increase the district’s contribution to a city employee pension fund. The board also faced ongoing criticism over trimming some campus budgets next year, though officials recently reversed some of those cuts. 

At the board’s regular monthly meeting, the district administration reiterated that it’s investing more in schools next year amid steep pandemic enrollment declines and is putting a premium on ensuring “reasonable” class sizes, arts programming, and academic interventions across the board. And officials gave a broad breakdown of how they have spent about $1 billion in federal COVID relief dollars so far, along with a more detailed outline of $600 million in additional spending planned for 2022-23. 

But those dollars will be gone in two years, officials stressed, and the district’s prospects for additional revenue are murky at best — as Chicago gears up for a transition to an elected school board. 

“This elected school board should have some of the same authority every other district in the state has to go to the voters for both operating and capital expenses,” said board president Miguel del Valle. 

CEO Pedro Martinez similarly expressed frustration that the district is currently limited in asking Chicago’s taxpayers for help in chipping in for building improvements — an option he says was available at districts where he worked in Nevada and Texas. 

CPS, which is gearing up to release its complete budget later this summer, announced its campus budgets in April. The district is allocating more dollars to schools overall, but critics pounced on proposed budget cuts at 40% of campuses amid significant pandemic-era enrollment losses. 

The district’s principal association, teachers union, and some parent advocacy groups have argued that the district should hold school budgets harmless for the third year in a row to account for heightened student academic and mental health needs.

The district has since restored about $24 million in cuts, including $14 million for special education, following appeals from school leaders. The district also divvied up educator professional development and other dollars that had previously been centrally budgeted among school campuses, boosting overall school budget amounts. With these revisions, the overall amount of the cuts decreased to $18.6 million, with about 23% of campuses now seeing lower budgets. 

But advocates and outgoing Chicago Teachers Union president Jesse Sharkey continued to make a case against any cuts to the board Wednesday.

“As long as staff is being cut from schools that are already short-staffed, you’ll hear me speak out against these cuts,” Sharkey said. 

Sharkey also decried a ballooning payment to a city employee pension fund at a time when Illinois, by its own calculation, found Chicago receives about 63% of the money it needs to be fully funded. 

The district is on the hook for $170 million to the Municipal Employees’ Annuity and Benefit Fund of Chicago, a pension fund that covers its support staff — up from $100 million last year. This will be the third year the district will contribute for its employees’ pensions, an expense the city has previously handled. 

“If the money isn’t there, let’s say we cannot afford to give $170 million to the city,” Sharkey said. 

But del Valle said stepping in to cover pension expenditures for the district’s own employees is a key step in “disentangling” the district from the city as Chicago Public Schools transitions to an elected school board from one historically appointed by the mayor. 

He called on the teachers union to join the district in advocating for more money from the state to help meet these pension obligations, which he said threaten to open up a “humongous structural deficit.”  

Still, he stressed, “These pension payments are CPS employees. They are our responsibility.”  

Board vice president Sendhil Revuluri said that over the years the city put “wildly inadequate” contributions into the fund, and Chicago now faces growing payments to catch up on increasing obligations. The $170 million represents about 65% of this year’s tab, with the city picking up the rest. 

The board backed the increased payment on a 3-to-2 vote. Member Elizabeth Todd-Breland, one of the no votes, argued the district really needs every dollar it can steer toward student needs as it tries to bounce back from the pandemic.

“I’m not comfortable with having City Hall balance any more of their budget on CPS’ budget,” said Todd-Breland, who added “This is one of those times where we’re being asked to do this on a timeline that does not work for CPS.”

Correction: The article’s headline has been updated to reflect the total pension payment approved by the board.

​​Mila Koumpilova is Chalkbeat Chicago’s senior reporter covering Chicago Public Schools. Contact Mila at mkoumpilova@chalkbeat.org.

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