Mayor Brandon Johnson's Chicago Public Schools chief resists City Hall borrowing plan, pension payment as budget deadline looms

Yahoo

8 hours ago

CHICAGO — Chicago Public Schools interim chief Macquline King is resisting pressure from Mayor Brandon Johnson to make a controversial pension payment and borrow millions of dollars to settle the district's budget, a notable twist in what has become a deeply uncertain budget cycle for the fourth-largest school district in the nation.
Several city officials met with CPS leadership last Thursday without King to lay out recommendations aimed at helping her close a $734 million deficit by the end of August, according to several board members who spoke to the Tribune.
Among their suggestions: taking out a $200 million loan and asking for new state revenue, while accepting responsibility for a controversial $175 million pension payment, previously covered by the city. King initially opposed all of their major proposals, board members who spoke to the Tribune said.
King is scheduled to have meetings with aldermen and state representatives on Tuesday, discussing her budget plans. Sources told the Tribune she intends to tell them that they won't make the $175 million pension payment and will avoid borrowing measures. It's not clear whether the district plans to avoid borrowing altogether or do a smaller amount than previously proposed.
But her resistance to the city's proposals could have far-reaching consequences, not just for the district's financial outlook, but for its political future. Johnson, a former teacher and longtime Chicago Teachers Union organizer, has strongly supported borrowing as a way to avoid deeper school-level cuts to staffing and classroom services. His appointed school board president, Sean Harden, has echoed that stance.
Critics warn the city's proposed loan — likely a high-interest, long-term borrowing plan — could further harm CPS's already fragile credit rating.
The school year begins August 18, the first time in recent memory that the district will open classrooms without an approved budget in place. CPS must lay out a budget proposal at a school board meeting on Wednesday, with a final vote expected later this month.
CPS and King did not immediately respond to requests for comment. City officials also didn't respond.
With the majority of the school board aligned with Johnson and a former city official at the district's helm, it might seem the mayor's budget strategy would face little resistance. But the path forward is murky. Board members, both aligned and not aligned with the mayor's agenda, are split about how best to handle the district's budget challenges.
For months, observers have closely watched King's approach to tackling the district's fiscal crisis. She stepped into the role in June following the departure of former CPS CEO Pedro Martinez, who clashed with Johnson over similar fiscal strategies during contentious contract talks with the teachers union last fall.
As Chicago's former senior director of education policy, King was the only final candidate for interim CEO with City Hall ties — leading some to believe she might back Johnson's CPS budget approach. The mayor still holds control over the majority of the partly-elected, partly-appointed school board until 2027, when it transitions to a fully elected body.
A hybrid board, disentanglement
The hybrid school board is the result of 2021 state legislation that sought to disentangle CPS finances from city finances, a prospect that has become harder to realize as board members look to aldermen to unlock funds earmarked for specific projects in special taxing districts, hoping to use the money to close a budget gap of hundreds of millions of dollars.
Another complication is the $175 million pension reimbursement to the city for nonteacher employees, which was formerly the city's responsibility and got pushed to CPS under former Mayor Lori Lightfoot. The district is not required to make the payment by state law. It didn't make the payment last year due to its financial constraints, and the city had to eat the costs.
In the past, aldermen — facing their own budget constraints — have threatened to reduce funding from their taxing districts to the district if the CPS didn't step up on the pension obligation.
Following King's inclination to push the payment back to City Hall, the mayor's office scheduled several budget briefings with CPS, CTU, and the principals' union to meet with groups of state representatives and aldermen on Tuesday, according to an email reviewed by the Tribune. The goal of the briefings was to 'facilitate a conversation about how to address the deficit and maintain the staffing our schools need.' In the email, King's first name is misspelled.
After King took over for Martinez in mid-June, CPS has chipped away at the district's budget gap through finding efficiencies — cutting hundreds of custodians, ending hot lunch programs, eliminating crossing guard positions and downsizing staff at the district's central office.
As of last week, board member Ed Bannon of District 1 on the far North Side said he was told by CPS officials that the gap was down to $369 million, taking the pension payment into account in their estimates.
He said the state needs to step in, and pointed to research — first reported by the Sun Times — that CPS has only 73% of the funding it needs to give students what it deems an 'adequate' education.
'You don't pay a mechanic 73% of the job, and expect your car to run,' Bannon said. 'You don't pay a roofer 73% of what they charge you, and expect your roof not to leak.'
The relationship between board members and state officials will be even more important moving forward, said Illinois Democrat Rep. Ann Williams, who helped draft the school board legislation.
'Having a cohesive ask or plan would be helpful as we have those conversations,' said Williams.
For now, board members and Chicago officials remain far from having a cohesive plan. Without borrowing, King's remaining options to address the shortfall come down to further cuts — or more money from the city and state. Both depend heavily on negotiations that are still taking shape.
____
Solve the daily Crossword