Chicago Board of Education Approves Agreement for Controversial Pension Payment

Introduction to the Agreement

The Chicago Board of Education approved an intergovernmental agreement Thursday that promises to give the city up to $175 million to cover a pension payment, but only if the City Council approves taking a massive amount of money out of special taxing districts called TIFs — a move that would result in Chicago Public Schools receiving hundreds of millions in additional revenue.

The Budget and Pension Payment

In the school district’s budget, members already promised that the district would make the pension payment should it get more, from any revenue source, than the $379 million it needed to balance its budget. If the record TIF sweep proposed by Mayor Brandon Johnson is approved, CPS would get $552 million, which would give the district almost enough to make the full payment.

Approval and Commitment

Acknowledging that they made a commitment in the CPS budget, board members unanimously approved the agreement. The 21-member board is partly-elected, partly-appointed by the mayor. Board member Michilla Blaise called it an important step. In the past the school board took TIF money, but later refused to provide the pension payment. She said the agreement was needed because the board has “shown ourselves to be a little bit funky.”

Pressure to Approve the Agreement

The board was under pressure to approve the agreement and, even with it, the deal could fall through. Ald. Jason Ervin (28th), budget committee chair, declared last week that the mayor’s budget would not leave his committee without a board-approved intergovernmental agreement.

Controversy Over TIF Funds

The massive sweep of the TIF funds is already proving to be a major friction point in the mayor’s budget. The tax money collected in TIFs is supposed to be used for projects in wards. Many City Council members are upset that their TIF funds would be drained, leaving no money for projects, such as parks, libraries and even repairing school buildings.

Impact on City Council and CPS Budget

Several City Council members say they will fight to keep some money in their TIFs, but any reduction in the money pulled could upset the careful math needed to balance CPS’ budget and get the city the full pension payment, which it needs to end the current fiscal year in the black. With the approval of the agreement, school board members called on City Council members to keep the TIF sweep in the budget at the amount proposed by Johnson.

Call to Action

At a news conference before the special meeting, board members pointed out that more than 30 City Council members out of 50 signed a letter saying they would support a TIF surplus to help CPS, rather than the alternative of taking a short-term loan to cover a deficit. Member Jitu Brown read the names of the alderpeople who signed that letter. “So we are asking our aldermen now to support the TIF surplus, like you promised you would do,” said Brown, who represents District 5A on the West Side.

Consequences of Not Receiving TIF Funds

School board member Karen Zaccor said, without the $379 million from TIFs, the school district would be forced to make more cuts. These would be in addition to cuts that were made this spring as the district grappled with a $700 million budget deficit. “There are not enough safe passage workers ensuring that students get safely to schools especially now that ICE is prowling our communities,” said Zaccor, who represents District 4a on the North Side. “Principals are telling us that their schools are not clean because there are not enough custodians. Even though the cuts are not in the classroom, they impact children’s health and their ability to learn.”

Additional Challenges

A representative from the Chicago Teachers Union said it has developed a tool that will show how much would have to be cut in each ward if the $379 million doesn’t come through. CPS continues to be in a tough budget position. The federal government canceled an $8 million grant and could pull back more money. Cuts to Medicaid and other benefits could impact CPS’ budget and its students. Meanwhile, CPS is projecting deficits in years to come.

Long-Term Solution

A few school board members said they really want the school district to pocket all the TIF money and not make the pension payment. “I can’t emphasize enough that we’re making this decision in an incredibly difficult environment when there are countless programs and supports that our families need, many of which could be supported with the money that we will give back to the city,” said board member Jessica Biggs, who represents District 6B on the South Side. School board members acknowledged that taking money out of TIFs is not a long-term solution. This week, several of them went to Springfield to try to convince state lawmakers to pursue progressive revenue so that more funding could be funneled to education.

Conclusion

The approval of the intergovernmental agreement by the Chicago Board of Education marks a crucial step in addressing the pension payment issue, but it also highlights the ongoing challenges faced by CPS in securing stable and sufficient funding. The controversy over TIF funds and the potential impact on City Council members and the community underscore the need for a long-term solution that prioritizes the needs of students and families.

FAQs

1. What is the intergovernmental agreement approved by the Chicago Board of Education?
   The agreement promises to give the city up to $175 million to cover a pension payment, but only if the City Council approves taking a massive amount of money out of special taxing districts called TIFs.
2. How much money would CPS receive if the TIF sweep is approved?
   CPS would get $552 million, which would give the district almost enough to make the full pension payment.
3. What are the concerns of City Council members regarding the TIF sweep?
   Many City Council members are upset that their TIF funds would be drained, leaving no money for projects, such as parks, libraries, and even repairing school buildings.
4. What are the potential consequences if the $379 million from TIFs is not received?
   The school district would be forced to make more cuts, in addition to cuts made this spring, which would impact children’s health and their ability to learn.
5. What is the long-term solution sought by school board members?
   School board members are seeking progressive revenue so that more funding could be funneled to education, rather than relying on TIF funds.