CTU, CPS Views on Large Fund Balance Key in Contract Talks

CTU Argues CPS Has Enough Money to Settle Contract

Chicago Teachers Union leaders argue that Chicago Public Schools already has the money to settle tense contract negotiations without mid-year budget cuts. CPS officials, however, argue that’s not the case if the district will still be required to make a pension payment that City Hall is counting on.

Fund Balance a Point of Contention

The CTU has said the record amount of cash CPS received from the city’s tax increment financing districts should land a deal. And union leaders in the past week have pointed to CPS’ $1.1 billion fund balance as evidence that the district has the financial resources necessary to end the contract battle.

“They have a sufficient amount of reserves,” CTU research director Pavlyn Jankov said Monday.

“It’s that in conjunction with the highest, historic TIF surplus we’ve ever had, $300 million,” he said, “which in every other contract bargaining scenario is the deal closer: The TIF surplus gets released, and we have a contract.”

CPS Officials Disagree

The large fund balance is a massive improvement from negative balances almost a decade ago. But the $1.1 billion figure doesn’t represent cash the district actually has on hand to spend.

CPS CEO Pedro Martinez said the district needs even more TIF dollars to help afford this year’s budget. And CPS officials insist the $1.1 billion fund balance is misleading.

CPS Chief Financial Officer Miroslava Mejia Krug told reporters at a news conference Monday that the district exhausts the funds on operational expenses and has to take short-term loans so it can make payroll. That leaves only $66 million — or three days’ worth of operating expenses — in the bank at any one time.

Pension Payment a Concern

Martinez added that the school district can pay the salary raises it offered the teachers union this year using TIF funds. It offered 4% raises for each of four years.

But Martinez said CPS still can’t afford a $175 million municipal pension payment that the city is counting on CPS to pay. About half of the employees covered by this pension work for CPS, but up until 2019, the city covered it.

Contract Negotiations Continue

The CTU on Friday said it would accept the cost-of-living raises offered by the school district, which are 4% a year over four years. But it is still fighting for more money for veteran teachers, who stop getting additional annual raises, called steps, based on experience. The CTU said they think those raises would cost about $25 million a year.

Conclusion

The contract negotiations between the CTU and CPS have been ongoing for months, with both sides having different views on the district’s financial situation. While the CTU argues that CPS has the money to settle the contract without mid-year budget cuts, CPS officials disagree, citing the district’s need for more TIF dollars and the pension payment that the city is counting on. The negotiations will continue, with the CTU and CPS hoping to reach an agreement that satisfies both parties.

FAQs

Q: What is the dispute between the CTU and CPS?
A: The dispute is over the district’s financial situation and whether it has the money to settle the contract without mid-year budget cuts.

Q: How much is CPS’ fund balance?
A: The district’s fund balance is $1.1 billion, but it doesn’t represent cash the district actually has on hand to spend.

Q: What is the pension payment that the city is counting on CPS to pay?
A: The pension payment is $175 million and covers about half of the employees covered by this pension, who work for CPS.

Q: What is the CTU fighting for?
A: The CTU is fighting for more money for veteran teachers, who stop getting additional annual raises, called steps, based on experience. The CTU said they think those raises would cost about $25 million a year.