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Chicago Tribune
5 days ago
- Business
- Chicago Tribune
Joe Ferguson and Daniel Anello: Chicago Public Schools can't afford to bail out City Hall
This month marks yet another turning point in the checkered financial history of Chicago Public Schools. With a projected $734 million deficit, as estimated by the interim CEO, the Board of Education must pass a budget by the end of August. The decisions made in the coming days will determine whether CPS begins a path to fiscal stability — or plunges into a tailspin that will make recovery brutally painful. Closing the gap was already a herculean task when it stood at $529 million, before the interim CEO added $175 million in the form of a pension reimbursement that City Hall has been attempting to strong-arm CPS into over the last year. Now, at $734 million, a solution is all but impossible without cuts to critical programs. The Municipal Employees' Annuity and Benefit Fund of Chicago (MEABF) pension fund, created in 1921, covers both city workers and CPS non-teaching staff. Yet two-thirds of this cost belongs to the city, and the city controls the tax levy designated to cover this pension fund. The law clearly states that it is the city's sole responsibility to fund MEABF, not CPS. The district did make partial reimbursements under an intergovernmental agreement during the COVID era, when it was flush with $3 billion in federal relief. That relief is now gone, but the mayor is insisting that CPS continue to pay. Let's be clear: There is no good way for CPS to pay this $175 million reimbursement. Revenue options are nearly nonexistent. Property taxes have already been raised to the legal limit, and CPS can raise money only through a referendum, which there is no time for. Even without the pension charge, CPS is being forced to make painful choices. Adding $175 million to the burden is like tossing a cinderblock to someone on the verge of drowning. It pushes any necessary cuts from difficult to catastrophic. City Hall's suggested solution for paying the pension reimbursement? CPS should just borrow the money. But a short-term, high-interest loan is a deeply risky move that simply kicks an even heavier can down the road. Borrowing to plug this year's hole may feel like an easy fix, but it's no fix at all. It would saddle CPS with increased interest payments and deepen the district's future budget deficits, just as the district faces yet another financial cliff next year. CPS is still paying nearly $200 million per year in interest on short-term borrowing from its last crisis, between 2016 and 2018. Those payments will last until 2048. Had the district avoided borrowing then, this year's deficit would be smaller. Repeating past mistakes now will only guarantee deeper harm to students and schools tomorrow. Even in the short term, borrowing poses major risks. Using debt to cover operating costs would likely trigger a credit downgrade, dropping CPS even further into junk bond territory. That downgrade would raise borrowing costs across the board, deepening the deficit and limiting future options. The consequences are real. First, higher interest rates would make CPS' debt more expensive, worsening future budget gaps. Second, most CPS borrowing supports capital needs, especially building maintenance. If borrowing becomes more costly, even less will be done to fix the district's $14 billion repair backlog. Third, CPS is banking on saving $100 million by refinancing existing debt at better rates. A downgrade risks erasing those savings and creating a new $100 million gap this year alone. And while these numbers may feel abstract, the impacts are not. Rising borrowing costs divert dollars away from classrooms, counselors and student supports. The true cost isn't just felt by taxpayers; it's paid by children, who lose access to the education resources they deserve. CPS is painting itself into a corner by attempting to cover the city's MEABF pension bill. It all but guarantees the district's only exit is through borrowing. But any loan is a dangerous gamble with the futures of hundreds of thousands of students. Editorial: State control of Chicago Public Schools grows likelier as budget crisis intensifiesA loan now could trigger a spiral of rising deficits, interest payments and more borrowing, culminating in CPS being locked out of credit markets entirely. That's exactly what happened in 1980, when the state had to step in and take over. That kind of crisis could undo the hard-won authority of Chicago's newly elected school board before it even begins. Importantly, when engaged, the public has been clear: Chicagoans overwhelmingly oppose CPS paying the city's pension bill, and they oppose borrowing to cover the current gap with or without the pension expense. The Board of Education should reject this shortsighted proposal. CPS exists to educate students, not to subsidize city pensions. Chicago's children, families and taxpayers deserve better. They deserve a school budget that protects the classroom, preserves fiscal integrity, and puts kids first.
Yahoo
26-03-2025
- Business
- Yahoo
CPS staff in a political tug-of-war: What to know about Chicago's $175 million pension battle
Tiwanda Parker, a college and career coach at Marshall High School, wonders how she could make a convincing argument for students to apply for jobs at Chicago Public Schools without a more stable pension picture. 'We have to make sure that we believe in this profession,' she said. 'And a part of believing in this profession is … making sure that those basic benefits are in place.' Who picks up the bill for the disputed $175 million pension payment for nonteaching CPS staff has been a looming question mark for the district in recent weeks and months. It is part of what led to the resignation of the previous school board and the subsequent firing of schools' chief Pedro Martinez. It's also part of what led to last week's delay of a budget amendment to balance the city's books by the end of March. The city has already made the payment but is awaiting reimbursement from CPS. Mayor Brandon Johnson and predecessor Lori Lightfoot have argued CPS should be responsible, while Martinez repeatedly has said the payment is the city's legal obligation. The district said in a statement to the Tribune it doesn't have the funding to cover the pension payment on top of the costs of a new teachers contract. 'Chicago Public Schools (CPS) officials have been clear for more than a year that CPS, like many districts, is facing a challenging fiscal situation without federal COVID-19 relief funds and without state education dollars that meet the state's own definition of full funding,' a CPS spokesperson said in the statement. Johnson's team had been warning of a looming March 30 deadline to log the reimbursement in its books for 2024. Without it, the mayor's team had suggested it might have to draw from its reserves to reconcile the difference. The final shortfall, Johnson deputies said in a Tuesday briefing, would not be known until later this spring, but an accounting fix could be done without Council sign-off. 'Again, it's too early to tell, but ultimately, any of this kind of reconciliation does not require a council vote, OK?' a senior administration official said. Conversations about the Municipal Employees' Annuity and Benefit Fund by city officials in recent weeks don't often address the people behind the pension that is being treated like a political football. 'This is our pension, we've done the work and it should be paid,' said Lashawn Wallace, who was a paraprofessional with CPS for 32 years and is now on leave from the district to work as an organizer for the Chicago Teachers Union. Regardless of who picks it up, the pension contribution tab for the MEABF will continue to rise as it digs out of near-insolvency. The MEABF only had about 24% of the funds it needed to cover future payments at the end of 2023, according to the fund's most recent actuarial report. Pension contributions, by law, must rise to reach a 90% funded level by 2058. Former Mayor Rahm Emanuel got creative with how to meet the city's obligation to MEABF workers, including imposing water-sewer tax increases, but Johnson settled his budget last year by a razor-thin margin and has not floated similar options to cover the gap. More than half of the fund's beneficiaries are current or former CPS employees, according to city officials — a number that is growing. The fund also covers some employees from the city and the Chicago Housing Authority. There were over 36,900 active members of the MEABF, per data as of December 31, 2023, the most recent figures provided by city employees. That doesn't count over 24,400 inactive members and 26,000 retirees and beneficiaries. During the Tuesday briefing with the mayor's office, Johnson officials said they won't know how large the gap from the MEABF will end up being until a 'book reconciliation' between March 30 and June 30 that accounts for final revenues and expenses from 2024. The city can only log revenues for the last fiscal year until the end of this month. The mayor's team also could not say whether other revenues would overperform enough, or whether expenses would drop enough to cover the $175 million difference. They also demurred on whether the city should cut back on other revenues it doles out to CPS — like grants, capital projects, or tax-increment financing surplus — to make up for the shortfall. Drawing down from the city's reserves may earn the ire of ratings agencies, but is still on the table, mayor's office officials said. Regardless, 'we have sufficient liquidity to meet our obligations,' a Johnson administration official said. 'We can't predict how the rating agencies will react to either the news cycle or the material impact. So we will do our work, and they will do theirs, and both of those things will be public.' Ald. Scott Waguespack, a frequent mayoral critic, warned that any action cutting out City Council will make Johnson's already-fraught aldermanic relationships 'much worse' after a grueling 2025 budget cycle. He and 14 other aldermen issued a letter on Tuesday demanding council approval for any movement of city funds to cover the 2024 budget gap, as well as quarterly reporting on the Finance and Budget committees on cash-flow management. 'The problem I have with a couple of my colleagues who are with them on this and just saying, 'Hey, we're just going to move the money around,' it's other people's money,' Waguespack, the former chairman of the Finance Committee, said. 'It's taxpayers' money, and they can't treat taxpayers like it's an open cash register.' At a recent school board meeting to discuss financial options to cover the pension payment in mid-March, Jill Jaworski, the city's chief financial officer, said in a presentation that she herself is a member of the MEABF. She recommended the school board approve a borrowing proposal to address the budget gap partly caused by the $175 million pension payment asked for by the city. Jaworski said the pension conflict is a 'highly unusual situation' based on a 'highly unusual history.' In all other school districts in Illinois, Jaworksi said, teacher retirement contributions are paid for by the state. By law, the city is responsible for making MEABF payments. That only changed in 2020, when Lightfoot, in an effort to detangle district finances from the city as it transitioned to an elected board, forged an agreement that would shift some costs onto CPS. The district made its first payment to the fund in 2021, and future payments were supposed to gradually rise to more than $250 million. 'As CPS moves to be a completely independent school board, there is a need for CPS to become financially independent,' Jaworski said, suggesting the state should help pick up some costs, as it does with other school districts in Illinois. But CPS is different from other districts because of its status as a large, urban district. It also has millions of dollars of debt in capital project expenses for its old buildings. Because of those rising obligations to the MEABF, the city's ask of CPS could grow to $315 million by 2027, according to projections in a 2022 district analysis, further stressing an already structurally imbalanced budget. Tom Sgouros, a research associate in data science at Brown University, said it is possible to run a pension system at low levels of funding under the right demographic conditions indefinitely — assuming there's no large population bump or other unexpected changes. 'That's because whoever's in the Chicago system that is going to be owed a pension liability to them, the last dollar of that liability isn't going to be paid out until they die,' Sgouros said. In a recent interview with the Tribune, Joe Ferguson, president of the watchdog group the Civic Federation, said: 'There is no professionally advanced and vetted pathway for the school board to take on the MEABF reimbursement, which it has no legal obligation to take on in the first instance.' Non-teacher CPS employees told the Tribune they don't care how the pension payment is paid, so long as they still have stability and aren't short-changed in their retirement benefits. Chicago Teachers Union President Stacy Davis Gates reiterated that sentiment at a rally with firefighters and teachers union members Monday morning, where members of both unions urged the swift settlement of their respective contracts. 'Let me say this. I don't care who pays it. The city can pay it. The school district can pay it. They can figure out how to honor the workers in this city,' Davis Gates said when asked about the pension payment. 'It only is a problem of hot potato when it comes to the workers of this city.' 'Protect those who protect you,' read one of the signs that bobbed in the sea of CTU red ski hats and jackets.
Chicago Tribune
26-03-2025
- Business
- Chicago Tribune
CPS staff in a political tug-of-war: What to know about Chicago's $175 million pension battle
Tiwanda Parker, a college and career coach at Marshall High School, wonders how she could make a convincing argument for students to apply for jobs at Chicago Public Schools without a more stable pension picture. 'We have to make sure that we believe in this profession,' she said. 'And a part of believing in this profession is … making sure that those basic benefits are in place.' Who picks up the bill for the disputed $175 million pension payment for nonteaching CPS staff has been a looming question mark for the district in recent weeks and months. It is part of what led to the resignation of the previous school board and the subsequent firing of schools' chief Pedro Martinez. It's also part of what led to last week's delay of a budget amendment to balance the city's books by the end of March. The city has already made the payment but is awaiting reimbursement from CPS. Mayor Brandon Johnson and predecessor Lori Lightfoot have argued CPS should be responsible, while Martinez repeatedly has said the payment is the city's legal obligation. The district said in a statement to the Tribune it doesn't have the funding to cover the pension payment on top of the costs of a new teachers contract. 'Chicago Public Schools (CPS) officials have been clear for more than a year that CPS, like many districts, is facing a challenging fiscal situation without federal COVID-19 relief funds and without state education dollars that meet the state's own definition of full funding,' a CPS spokesperson said in the statement. Johnson's team had been warning of a looming March 30 deadline to log the reimbursement in its books for 2024. Without it, the mayor's team had suggested it might have to draw from its reserves to reconcile the difference. The final shortfall, Johnson deputies said in a Tuesday briefing, would not be known until later this spring, but an accounting fix could be done without Council sign-off. 'Again, it's too early to tell, but ultimately, any of this kind of reconciliation does not require a council vote, OK?' a senior administration official said. What about the beneficiaries? Conversations about the Municipal Employees' Annuity and Benefit Fund by city officials in recent weeks don't often address the people behind the pension that is being treated like a political football. 'This is our pension, we've done the work and it should be paid,' said Lashawn Wallace, who was a paraprofessional with CPS for 32 years and is now on leave from the district to work as an organizer for the Chicago Teachers Union. Regardless of who picks it up, the pension contribution tab for the MEABF will continue to rise as it digs out of near-insolvency. The MEABF only had about 24% of the funds it needed to cover future payments at the end of 2023, according to the fund's most recent actuarial report. Pension contributions, by law, must rise to reach a 90% funded level by 2058. Former Mayor Rahm Emanuel got creative with how to meet the city's obligation to MEABF workers, including imposing water-sewer tax increases, but Johnson settled his budget last year by a razor-thin margin and has not floated similar options to cover the gap. More than half of the fund's beneficiaries are current or former CPS employees, according to city officials — a number that is growing. The fund also covers some employees from the city and the Chicago Housing Authority. There were over 36,900 active members of the MEABF, per data as of December 31, 2023, the most recent figures provided by city employees. That doesn't count over 24,400 inactive members and 26,000 retirees and beneficiaries. During the Tuesday briefing with the mayor's office, Johnson officials said they won't know how large the gap from the MEABF will end up being until a 'book reconciliation' between March 30 and June 30 that accounts for final revenues and expenses from 2024. The city can only log revenues for the last fiscal year until the end of this month. The mayor's team also could not say whether other revenues would overperform enough, or whether expenses would drop enough to cover the $175 million difference. They also demurred on whether the city should cut back on other revenues it doles out to CPS — like grants, capital projects, or tax-increment financing surplus — to make up for the shortfall. Drawing down from the city's reserves may earn the ire of ratings agencies, but is still on the table, mayor's office officials said. Regardless, 'we have sufficient liquidity to meet our obligations,' a Johnson administration official said. 'We can't predict how the rating agencies will react to either the news cycle or the material impact. So we will do our work, and they will do theirs, and both of those things will be public.' Ald. Scott Waguespack, a frequent mayoral critic, warned that any action cutting out City Council will make Johnson's already-fraught aldermanic relationships 'much worse' after a grueling 2025 budget cycle. He and 14 other aldermen issued a letter on Tuesday demanding council approval for any movement of city funds to cover the 2024 budget gap, as well as quarterly reporting on the Finance and Budget committees on cash-flow management. 'The problem I have with a couple of my colleagues who are with them on this and just saying, 'Hey, we're just going to move the money around,' it's other people's money,' Waguespack, the former chairman of the Finance Committee, said. 'It's taxpayers' money, and they can't treat taxpayers like it's an open cash register.' 'Highly unusual situation' and 'highly unusual history' At a recent school board meeting to discuss financial options to cover the pension payment in mid-March, Jill Jaworski, the city's chief financial officer, said in a presentation that she herself is a member of the MEABF. She recommended the school board approve a borrowing proposal to address the budget gap partly caused by the $175 million pension payment asked for by the city. Jaworski said the pension conflict is a 'highly unusual situation' based on a 'highly unusual history.' In all other school districts in Illinois, Jaworksi said, teacher retirement contributions are paid for by the state. By law, the city is responsible for making MEABF payments. That only changed in 2020, when Lightfoot, in an effort to detangle district finances from the city as it transitioned to an elected board, forged an agreement that would shift some costs onto CPS. The district made its first payment to the fund in 2021, and future payments were supposed to gradually rise to more than $250 million. 'As CPS moves to be a completely independent school board, there is a need for CPS to become financially independent,' Jaworski said, suggesting the state should help pick up some costs, as it does with other school districts in Illinois. But CPS is different from other districts because of its status as a large, urban district. It also has millions of dollars of debt in capital project expenses for its old buildings. An increasing payment Because of those rising obligations to the MEABF, the city's ask of CPS could grow to $315 million by 2027, according to projections in a 2022 district analysis, further stressing an already structurally imbalanced budget. Tom Sgouros, a research associate in data science at Brown University, said it is possible to run a pension system at low levels of funding under the right demographic conditions indefinitely — assuming there's no large population bump or other unexpected changes. 'That's because whoever's in the Chicago system that is going to be owed a pension liability to them, the last dollar of that liability isn't going to be paid out until they die,' Sgouros said. In a recent interview with the Tribune, Joe Ferguson, president of the watchdog group the Civic Federation, said: 'There is no professionally advanced and vetted pathway for the school board to take on the MEABF reimbursement, which it has no legal obligation to take on in the first instance.' Non-teacher CPS employees told the Tribune they don't care how the pension payment is paid, so long as they still have stability and aren't short-changed in their retirement benefits. Chicago Teachers Union President Stacy Davis Gates reiterated that sentiment at a rally with firefighters and teachers union members Monday morning, where members of both unions urged the swift settlement of their respective contracts. 'Let me say this. I don't care who pays it. The city can pay it. The school district can pay it. They can figure out how to honor the workers in this city,' Davis Gates said when asked about the pension payment. 'It only is a problem of hot potato when it comes to the workers of this city.' 'Protect those who protect you,' read one of the signs that bobbed in the sea of CTU red ski hats and jackets.
Chicago Tribune
19-03-2025
- Business
- Chicago Tribune
Ald. Jason Ervin: CPS needs to follow through on the municipal employee pension payment
Chicagoans may be following the back and forth between the City Council and Chicago Public Schools leadership over an obscure pension payment and wonder how does this affect me? As the chair of the City Council Budget Committee, I want to be clear: The fate of the CPS pension payment will have a direct impact on every single Chicagoan, whether you live on the West Side, the South Side or the North Side. City finances affect all of us. First, a little context is needed. All the way back in 2020, CPS and the city of Chicago signed an agreement that called for CPS to ramp up payments to the Municipal Employees' Annuity and Benefit Fund (MEABF) pension fund over the coming years because CPS employees make up a majority (more than 60%) of the beneficiaries of this particular pension fund. The City Council does not decide how many people CPS hires or for what positions, so we cannot indefinitely pay for their employees' pensions. For the past five years, CPS has made their portion of the pension payment. Last year in good faith, Mayor Brandon Johnson reduced the amount that CPS would have to pay from almost $300 million to $175 million to demonstrate our partnership with the school district and to provide some relief to CPS' budget. In October, CPS CEO Pedro Martinez came before the City Council and committed, unequivocally, that CPS would pay its share of the MEABF pension payment in exchange for a larger tax increment financing surplus. In response, the City Council appropriated the largest TIF surplus in the history of Chicago and gave CPS a record $300 million to help cover the cost of the payment. Now, in the final weeks before Chicago reconciles its budget for the past fiscal year, the CEO is reversing course and urging board of education members to reject their obligation to make the payment. Martinez defends this reversal by saying that CPS has no legal obligation to make this payment. No member of the City Council disputes this. The issue at hand is that members of the council voted to appropriate such a large surplus because we were operating with the understanding that CPS would follow through on the pension payment. By refusing to make the $175 million payment, CPS is jeopardizing more than $300 million in potential surplus next year alone. As the chair of the Budget Committee, I can tell you that it would be near impossible to convince council members next year to give CPS anywhere near the dollars that we appropriated for the past two budgets if district officials were to turn their backs on us now. The impact on the city's finances would be dire. We would end this year with a deficit, putting our city's credit rating at risk and making it more difficult for the city to balance its budget next year. Essentially, Martinez may make your taxes go up because he refused to follow through on the commitment he made to the City Council. Furthermore, Martinez is sending a clear message to CPS employees that he is not responsible for fully compensating them with the incomplete budget he proposed. Instead of spending his time generating a comprehensive solution, now he is pointing the finger at the citizens of Chicago and expecting us to pick up the tab. There is even reporting that suggests that Martinez inserted language into the proposed budget amendment in an attempt to get the city to take on debt to pay for CPS' pension payment. I can say with certainty that no City Council member would take on any amount of debt to make this payment on CPS' behalf. The board of education will host public budget amendment hearings this Thursday and Friday. I encourage all Chicagoans who care about fiscal responsibility and transparency to show up and demand that CPS follow through on their commitment to make this payment. We need a productive working partnership with our school district to improve our schools, not a political showdown between the City Council and CPS. Ald. Jason Ervin, who represents the 28th Ward, is chairman of the Chicago City Council's Budget Committee.
Chicago Tribune
13-03-2025
- Business
- Chicago Tribune
Mayor Brandon Johnson pushes CPS to refinance $240M in debt, experts warn of long-term risks
The city is pushing Chicago Public Schools to refinance about $240 million in debt to balance its budget for the year, a move that some finance experts argue is fiscally irresponsible. In a briefing with reporters Tuesday, senior aides to Mayor Brandon Johnson said the district could get the money released out of an existing debt service fund, which school districts use to pay off debt similar to a mortgage or a construction loan on a house. CPS borrows money by selling bonds and has to pay it back over time. CPS could then pay it back with expiring tax increment financing money — tax money set aside to spur growth in neighborhoods — in two to 10 years, Johnson's aides said. But the city and outgoing CPS chief Pedro Martinez are in a tough spot, financial experts say. Due to a decline in federal funding and an increase in operating costs, the district is staring down a budget deficit of at least $500 million for the 2025-26 school year. In a week, the school board will tasked with a difficult decision about how to balance its books. Board members have received advice from various financial firms and are waiting on another outside firm's analysis to help understand the implications of that decision. Six school board members told the Tribune they received an email at the beginning of March from the Board of Education's bond attorney Lewis Greenbaum of Katten Muchin Rosenman warning against using debt to cover operating costs. 'We have reviewed the (Illinois) Constitution and applicable statutes concerning debt issuance by the District and we find no authority for the issuance of debt by the District to fund a budget deficit,' the email states. Greenbaum's email talks about the risks and challenges of borrowing under a budget deficit — where the amount of expenditures for the fiscal year is greater than the amount of revenues and reserve funds. Still, CPS' proposal to restructure existing debt is different from issuing new bonds, according to financial experts. Refinancing debt works in emergency situations, but the MEABF payment is less of an emergency so much as a 'standard cost,' said Ralph Martire, executive director of the Center for Tax and Budget Accountability. 'It may get you through a budget cycle or two,' Martire said. '(But) it creates … fiscal stress that challenges your capacity as a public sector entity to continue funding your core objectives or services long-term.' In July, Martinez settled the district's budget without accounting for the costs of a $175 million pension payment for nonteacher staff or a new teachers contract. The mayor's office acknowledged Tuesday that CPS is facing serious budget challenges this year, but said Martinez has committed to covering the Municipal Employees' Annuity and Benefit Fund payment as well as the unsettled teachers contract. The briefing with reporters came days after a budget amendment was posted online, part of the process for a governing body to account for those labor costs. Two budget hearings were scheduled for Thursday and Friday for the school board to hear from the public about how to best cover the gap, which Johnson's top aides estimated to be around $240 million. CPS began covering part of the pension payment five years ago as part of an effort to transition the district to an independent governance structure with a hybrid, half-elected, half-appointed school board, seated in January. District officials originally agreed to pay close to $300 million to the MEABF but Martinez negotiated the number to $175 million, according to the city. CPS said in a statement that it has worked hard to minimize borrowing during the school year. Shifting funds to reimburse the city for a pension payment could increase the likelihood of cuts, furloughs, layoffs and a possible strike, district officials said. 'The district remains in a precarious position with no meaningful ability to use reserves or borrow for any budget gap closure,' a CPS spokesperson said in a statement. Meanwhile, Jill Jaworski, Chicago's chief financial officer challenged CPS' bond attorney's reservations on why it cannot take on more debt: 'There is a manner in which they can come up with a plan of finance to do a borrowing, if that is fully necessary at the end of the day to meet their obligations to balance their budget.' Asked for comment about the reservations, the mayor's office didn't immediately respond. Complicating Johnson's CPS agenda further is the looming exit of his top labor liaison, Bridget Early. The mayor's spokesperson Cassio Mendoza on Tuesday confirmed her resignation, first reported by Crain's Chicago Business, is effective at the end of the week. Early's official role — deputy mayor for labor relations — was created by Johnson on his first day in office as a nod to his administration's focus on union outreach. But two years later, the inaugural job has been increasingly focused on one notable union: the Chicago Teachers Union, where Johnson cut his political teeth as an organizer. After the mayor soured on Martinez over the MEABF pension and loan last summer, it was Early who served as a conduit between the mayor's office and Johnson's previous school board. The Tribune reported that in a Sept. 12 email sent to the board's president and vice president, Early outlined a series of 'talking points' on 'board expectations from the mayor' for the rest of their term, including seeing the 'CEO out by 9/26' and landing the CTU contract. 'It is okay if this is a lot to take on. If this feels like too much, we can work on an exit plan,' Early wrote at the end of her memo to Jianan Shi and Elizabeth Todd-Breland, who indeed resigned along with the rest of that seven-member board the next month. Half a year later, Early is also heading for the exit, but without a CTU contract secured. Martinez was fired without cause in December and is now presiding over negotiations as a lame-duck CEO until June, one that is actively working against the mayor's $240 million CPS borrowing plan. Early told Crain's on Tuesday that the CTU contract is 'nearing its conclusion.' But uncertainty abounds over whether the new hybrid school board has enough Johnson loyalists to shepherd his agenda over the finish line. Previously the political director for the Chicago Federation of Labor, Early's involvement in CPS matters makes sense given that CTU is one of the city's most powerful unions and a top ally of the mayor. His previous deputy mayor for education, Jen Johnson, was the other top official in his administration with the most experience in that field as the CTU's former chief of staff, but she stepped down in October. Outside of that September memo to Shi and Todd-Breland, Early was in the room with the mayor during a November meeting at City Hall where Johnson allies chewed out Martinez over impending charter school closures. And last month, Early began disseminating a plan for the school district to accept the $175 million pension obligation and issue $242 million in bonds. Public records obtained by the Tribune show that in the last couple months, Early also took the reins on corralling the hybrid school board — or at least part of it — on that endeavor. Throughout February, Early met weekly with Johnson's appointed board President Sean Harden and Vice President Olga Bautistia under the topic of 'CPS BOE x MO,' her email records show. 'BOE' stands for Board of Education, while 'MO' stands for mayor's office. In a Feb. 3 email to an executive assistant for the mayor's office, Early wrote, 'We do need these on a weekly basis for 30 minutes.' Early also strove to schedule a weekly 'Ed Meeting' with most of the Johnson-aligned members of the school board. Listed in the attendees across these check-ins are 10 of the mayor's 11 appointees, with Cydney Wallace's name missing as she was only brought onto the board in late February. At least two elected members who were CTU-endorsed were also invited: Jitu Brown, and Ebony DeBerry. In total, six of the 10 members who were elected in November were backed by charter school interests or otherwise independent of the CTU. All of those members confirmed to the Tribune Wednesday they were not briefed by Early on the mayor's CPS plan. Board members will vote on the proposed budget amendment at a meeting March 20. Johnson needs two-thirds support from the 21-member board to pass a budget amendment, and the board president only votes in a tie. If the amendment doesn't pass, that pension payment obligation will go back to the city. Johnson has until March 30 to balance his books. In a post-City Council news conference Wednesday, Johnson refused to detail his backup plan if he loses the school board vote on his budget amendment. Instead, he all but accused Martinez of being dishonest if he succeeds in scuttling his CPS plan. 'I want to believe that the CEO did not come before the City Council and lie to them. I want to believe that,' Johnson said when asked what the city will do if CPS doesn't absorb the pension payment. 'You want me to answer that if the CEO lied to the City Council, what's the contingency plan around someone being dishonest?' Meanwhile, Johnson allies in City Council began collecting signatures for a message imploring Martinez to cover the MEABF payment during Wednesday's monthly meeting. The letter carries no actual weight but has become a common mechanism for aldermen to exert defiance against the mayor's CPS agenda. Led by Ald. Jason Ervin, the mayor's handpicked budget chair, and Jeanette Taylor, his education chair, the letter says they are 'demanding CEO Pedro Martinez follow through on his commitment to the city of Chicago and reimburse Chicago Public Schools' (CPS) portion of the MEABF payment.' 'We reject any attempts to pass the responsibility of balancing his budget onto the Council, or the taxpayers of Chicago, who we represent,' the letter says. Martinez agreed to pay the pension payment at a City Council meeting in mid-October if he received $484 million in tax increment financing surplus money, allocated by aldermen after all funds have been pledged for projects within their district. CPS only received about $300 million in TIF surplus revenue when the district settled its budget in December.
