Mayor Brandon Johnson-aligned school board members balk at CPS budget plan that sidesteps city pension payment, borrowing

Chicago Tribune

2 days ago

Despite the presentation of a balanced budget containing no loan for the upcoming Chicago Public Schools academic year after months of debates over a multi-million dollar budget deficit, the entirety of the Chicago Board of Education is not sold on the $10.25 billion plan.
The proposal was the result of weeks of planning and bolstered by community engagement. It combines cuts to expenditures — that avoid cuts to classrooms — with input from outside partners such as the city and state, according to the district's Chief Budget Officer Mike Sitkowski, who presented the plan to the school board at their bi-monthly meeting Wednesday.
Notably, it balances the budget without a $200 million borrowing scenario or a $175 million pension reimbursement to the city, as proposed by Mayor Brandon Johnson. Interim CPS CEO Macquline King drew attention in recent days for pushing back on Johnson's proposals to rely on borrowing and make the pension payment.
King took over in June as the district was confronting a $734 million budget crisis in the wake of leadership upheaval. Just days earlier, the former schools chief Pedro Martinez had left the district for a new job in Massachusetts after a protracted public disagreement with Johnson about how to balance last year's budget, which ultimately cost him his job.
The interim CEO stepped into the role with two immediate priorities: settling the budget and ensuring a smooth start to the school year. While King, a former city employee, has taken a stance against Johnson, it remains unclear if the board will follow suit. And it remains to be seen how her relationship with Johnson will fare in light of the budget reveal.
A majority of the 21-member hybrid board members are Johnson-aligned, meaning they have significant sway over the final vote on a budget, which requires a simple majority, or 11 members to vote in favor.
During the meeting, while some Johnson-aligned members recognized the blood, sweat and tears that Sitkowski put into the proposal, they also expressed consternation about its potential to rupture relationships with City Hall. Meanwhile, several elected board members backed the proposal, saying it puts students first.
Sitkowski maintained that this year's plan, in agreement with King's approach, stays away from dangerous borrowing and helps the district in the long term, significantly decreasing the projected budget deficit in the next five years. He emphasized that the proposal fulfills all labor commitments as outlined in a new teachers contract finalized this spring — upholding promises to teachers' wages, class sizes and bilingual education support. It also offers protections to principals in their recently approved contract, he added.
He assured board members that he 'reviewed every line' to identify all cost-saving measures, such as cutting the CPS' central office budget by $50 million. He laid out a variety of strategies to ensure the most money would be funneled to the district, including using $65 million in one-time resources from the district's debt stabilization fund, which is designed to account for debt expenditures. The plan also saves $29 million by repurposing existing state and federal dollars, he said.
'This budget is designed to avoid the possibility of mid-year cuts. We're confident that it does that,' Sitkowski said. 'We also want to make good on this commitment, and work with our partners at the city, at the state level, on every level of government to continue to address these shared obligations that we don't, as a city, have the resources to currently address.'
He stressed that the city's $200 million borrowing plan would substantially hurt CPS' credit rating, as occurred during borrowing in the 2010s.
'We are now paying nearly $200 million per year for this crisis debt,' Sitkowski said, lamenting the previous borrowing undertaken by CPS. 'If we had access to this funding or our classrooms, rather than to pay off this debt, we could hire at least 2,000 additional teachers.'
The question of whether CPS accepts responsibility for a pension payment previously covered by the city took up a large amount of discussion at Wednesday's board meeting.
It is the city's responsibility to pay into the municipal pension, even though over half of the pensioners are CPS nonteaching staff, such as support staff and central office employees. The city covered the costs of the pension until 2021, when it shifted to the district under former Mayor Lori Lightfoot.
The district's proposal does not to commit to the pension payment, keeping the option open contingent on additional resources from the city and state. That is different from last year, when a budget was settled without leaving that option open, meaning a budget amendment was required to make the pension payment.
This March, the board postponed a vote on a budget amendment to engage in borrowing when it was clear it didn't have sufficient votes. The city ultimately took on the costs of the payment.
The partly-elected, partly-appointed board needs a supermajority — 14 out of 21 votes — to pass a budget amendment, but just a simple majority to pass the budget. Sitkowski isn't ruling out making the payment, but rather saying that CPS needs extra money from outside partners. That means this year, compared to in March, it just needs a simple majority to pass, Sitkowski said.
The proposal relies on an extra $79 million from special tax increment financing districts, called TIF, an economic development fund that collects taxpayer money to be used for special projects by aldermen in their districts. CPS received $300 million in TIF funding last year and expects to get more this year, according to Sitkowski. But the district needs even more money from TIF, and potentially from the state, in order to make the pension payment, Sitkowski said.
Aldermen have publicly stated that they won't vote to allocate their extra TIF dollars to the district if CPS does not agree to make the pension payment. But they also need their chunk of that money to balance a challenging city budget come this fall.
Board member Michilla Blaise, who represents District 5B on the West Side and was appointed by the mayor, advocated for completing the pension payment to maintain a collaborative relationship with the city, noting that the district had already made a misstep by not making the payment last fiscal year. She questioned why the city would allocate TIF funding to the district without a promise of a pension payment.
'We have to be good partners. We have to collaborate. And if we're going to act like we don't care about the city budget, why should they care about ours?' she asked.
Meanwhile, elected board member Carlos Rivas, who represents District 3B on the Northwest Side, pushed back on the idea that the city might withhold TIF funding without the promise of a pension payment, since the city allocates a TIF surplus each year. He said he expects another record surplus.
'There is no mechanism right now to give us less TIF money because they're mad at us,' Rivas said.
King remained stoic for most of the meeting, chiming in only when directly asked to confirm that she hasn't 'had any conversation to date about specific dollars in City Council.'
Two top aides to Johnson, including Kennedy Bartley, the mayor's chief of external affairs, and Jason Lee, Johnson's senior adviser, were also at the meeting Wednesday. Lee spoke to board members during a recess, according to city spokesman Cassio Mendoza.
While CPS is a large city agency and the budget is of high importance to the mayor's office, it is unusual to see a high level delegation from the mayor's office at a school board meeting. The city did not respond immediately to a request for further comment.
The district's shortfall ultimately stems far beyond current relationships with aldermen. It is the result of years of aggressive borrowing, chronically underfunded pension obligations and ongoing budget gaps.
At the same time, federal pandemic relief funding — which had previously bolstered student performance in math and literacy — expired in late 2024. And adding to the uncertainty are potential cuts proposed by the Trump administration to eliminate nearly 16% of the resources relied upon by many CPS families, according to a district presentation from a budget briefing with city officials, CPS and other stakeholders on Tuesday.
In talks about the deficit, CPS officials have repeatedly cited data showing that the district is missing $1.6 billion in funding from the state, despite a recent $45 million allocation. Board member Anusha Thotakura, who was appointed by the mayor and represents District 6A on the South Side, emphasized that relationships between board members and state officials will be vital moving forward.
'The only thing, aside from money falling out of the sky, that can help us close that gap is us in this room, and our partners, being serious about advocating for revenue,' Thotakura said.
For weeks, district leaders have been working closely to determine the best way to address the massive gap. They've already made cuts, trying to keep the reductions as far away from the classroom as possible. So far, that has meant restructuring of the special education department, cuts to custodial staff and hot lunches, among other measures.
Before the meeting, dozens of workers and community members dressed in matching purple Service Employees International Union Local 1 shirts gathered outside the CPS headquarters to criticize the recent layoffs of hundreds of custodians. They advocated for the district to ensure no more reductions will be made to custodial staffing moving forward.
SEIU Local 1 Vice President Greg King called the layoffs a failure of CPS and city leadership.
'Parents will be worried whether their kids are in a healthy environment or a safe environment. Our community has lost trust,' King said. 'Our students deserve to be safe and in a clean classroom, and our custodians deserve respect, and I'm going to say this, stop balancing your missed budget off the backs of our Black and brown kids.'