Chicago Public Schools CEO Pedro Martinez Under Fire for Refusing to Absorb Pension Payment
An influential alderperson, Ald. Jason Ervin (28th), has demanded that Chicago Public Schools CEO Pedro Martinez appear before the City Council to explain why he is refusing to absorb a $175 million pension payment for nonteaching school employees.
Malfeasance Allegations
Ervin, the handpicked Budget Committee chair by Mayor Brandon Johnson, called Martinez’s decision "borderline malfeasance" for pushing through a $9.9 billion school budget that does not include the pension payment. At the time of former Mayor Lori Lightfoot’s shift, Johnson worked as a paid organizer for the Chicago Teachers Union, which sharply criticized the move. Now that Johnson is mayor, he’s asking CPS to absorb the pension payment.
Budget Challenges
The school system had to close its own $505 million deficit this year and find solutions to historical underfunding. That’s why Martinez and Johnson’s handpicked school board rejected the mayor’s request to take out a short-term, high-interest loan to cover the cost of both the pension payment and a new teachers union contract. Unless the board does an about-face, the city’s 2025 budget shortfall will balloon to $982.4 million and Chicago will end 2024 with a $223 million deficit.
Pressure on Martinez
Ervin plans to turn up the heat on Martinez by summoning him before the Budget Committee to "tell us what the hell he’s thinking." "The CEO of CPS needs to be held to account for this," Ervin said. "It’s almost to the point of malfeasance that you don’t pay your pension obligation…. These aren’t our employees. They’re your employees. Pay for ’em."
CPS Response
CPS put forward a balanced budget that aims to best support our students and staff, building on the District’s academic progress and ongoing work of the past couple of years. "Given our budget challenges, the district worked to identify as many cost savings as possible," a district spokeswoman said in a statement. "We will continue to work with all our partners to find solutions to our funding challenges so we can best support our students’ continued success."
Ousting Martinez
Headlines about the mayor’s behind-the-scenes maneuvering to oust Martinez over the unprecedented budget rebuke appear to have slowed the momentum to fire Martinez — at least for now. On Wednesday, Ervin was asked whether he believes the mayor should dump the schools CEO he inherited from Lightfoot. "Whatever the mayor decides to do with Martinez is up to him. If it were me, I probably would be pushing a little more now," Ervin said.
History of Pension Payments
While CPS employees make up a little more than half of the members of the Municipal Employees Pension Fund, the city had historically paid these pension costs for nonteaching school staff until Lightfoot used $60 million from CPS to chip away at the city’s $838 million budget shortfall that year. At the time, Ervin said CPS had to become a "self-sustaining" unit of government and questioned whether the city ever should have paid the pension cost.
Conclusion
The dispute over the pension payment highlights the complex financial relationships between the city and CPS. While some argue that CPS should absorb the payment, others argue that the state’s treatment of CPS is unfair. As the city and CPS work to disentangle their financial structures, the future of the pension payment remains uncertain.
Frequently Asked Questions
Q: Why is the city demanding that CPS absorb the pension payment?
A: The city is demanding that CPS absorb the pension payment because it believes that CPS has the financial ability to do so.
Q: Why did former Mayor Lori Lightfoot shift the pension payment to CPS?
A: Lightfoot shifted the pension payment to CPS to help chip away at the city’s budget shortfall.
Q: Why is CPS rejecting the mayor’s request to take out a short-term, high-interest loan?
A: CPS is rejecting the mayor’s request because it believes that taking on debt would not be in the best interest of the district.
Q: What is the impact of not absorbing the pension payment?
A: Not absorbing the pension payment could lead to a significant budget shortfall for the city and CPS.
Q: What is the future of the pension payment?
A: The future of the pension payment is uncertain and will depend on the outcome of the negotiations between the city and CPS.
