LIGHTFOOT’S BUDGET CALLS FOR CPS TO REPAY $60 MILLION FOR PENSIONS
As union leaders claim another $38 million could end the teachers strike, Mayor Lori Lightfoot’s 2020 budget requires the Chicago Public Schools to reimburse the city for $60 million in pension contributions previously covered by City Hall.
The historic about-face is buried in the mayor’s budget overview.
It states: “In 2020, an additional $60 million is expected from Chicago Public Schools to cover a portion of its share of the city’s annual contribution to the Municipal Employees’ Annuity and Benefit Fund.”
And, according to a Chicago Teachers Union official, Lightfoot also wants CPS to repay the city for $33 million in security costs, although the city said that’s not a new demand this year.
For years, City Hall has covered the school system’s annual contribution to the largest of four city employee pension funds.
This year, Lightfoot needs the money to chip away at the city’s $838 million shortfall.
The $60 million pension reimbursement that would essentially claw back nearly 37% of the $163 million Lightfoot plans to forward to CPS from a tax-increment-financing surplus in Chicago history.
“CPS is the only sister agency that the city subsidizes by way of pension contributions. Every other sister agency pays its own fair share,” Chief Financial Officer Jennie Huang Bennett told the Sun-Times.
She said that more than 55% of Municipal Employees’ Annuity and Benefit Fund employees are CPS employees.
“Ultimately, it’s money that they owe,” she said. “. . . It’s about making sure that all of the various sister agencies live within their means and that we are all paying our fair share.”
Huang Bennett also said that unlike the pension cost, the $33 million for security is not a new demand this year.
Lightfoot’s pension reimbursement demand comes at a critical time. It could be the difference between ending Chicago’s longest teachers strike since 1987 or continuing it.
CTU Vice President Stacy Davis Gates has argued $38 million is all that separates the two sides.
On Monday, Davis Gates showed up at City Hall to lobby aldermen during the first day of City Council budget hearings.
She argued that, in addition to the $60 million pension reimbursement, Lightfoot is demanding that CPS reimburse the city for $33 million of the $80 million in school security costs assumed by former Mayor Rahm Emanuel two years ago.
“Costs that were shifted from the city to the schools is in the way of a contract settlement . . . . Cops were paid out of the city budget. That pension shift was paid out of the city budget . . . . That’s worse than Rahm,” Davis Gates said.
“The mayor has effectively put [nearly] $100 million in the CPS budget line that had previously been on the city budget line to try and balance the city budget, which is making these talks more difficult.”
After meeting with Davis Gates, Ald. Jason Ervin (28th) was asked whether the Black Caucus he chairs would urge Lightfoot to reverse her reimbursements demands.
“The schools are a unit of government that have to be self-sustaining,” Ervin said. “There is some concern that these costs that were borne by the city naturally should have been borne by CPS.”
Education Committee Chairman Michael Scott Jr. (24th) said only that the two sides are “very, very close” and CPS students, including his two children, “need to get back in school.”
Schools CEO Janice Jackson joined the stalemated negotiations on Sunday and lobbied aldermen Monday, refusing to talk to reporters as she left City Hall.
Jackson has maintained the union’s unresolved demands would cost far more than require another $100 million — far more than the $38 million the union claims — and that CPS “can simply not afford” to sweeten its $500 million offer.
On Monday, Huang Bennett denied CPS could end the teachers strike by continuing the pension subsidy.
“This would not pay for what it is the CTU is asking for,” Huang Bennett said.
“We also, in this budget, did provide an unprecedented level of support for CPS through the TIF surplus. It is the highest surplus in the city’s history. So it’s not to say that there aren’t things in this budget that help CPS.”