Chicago Board of Education members are being pressured into a financial rescue mission for a unit of government they don’t even represent — the city of Chicago.
Mayor Brandon Johnson and Ald. Jason Ervin, his staunch City Council ally and chair of the Budget Committee, turned up the heat in advance of Thursday’s important school board vote on a needed amendment to the current-year CPS budget.
At issue is a $175 million contribution to a deeply underfunded pension fund that covers employees of both CPS and the city of Chicago. Johnson has insisted that CPS make that payment because many of the fund’s beneficiaries are nonteaching school employees even though state law clearly says the city of Chicago is responsible for the fund. Ervin went so far as to threaten the schools with financial retaliation by the city government if they don’t agree, according to news reports.
We’re on record already saying that the school board shouldn’t take on more debt to cover the pension obligation. And, no, CPS CEO Pedro Martinez did not promise the City Council that he would do so, notwithstanding Johnson and Ervin’s repeated public claims to the contrary. For the record, Martinez said last year that he would urge the school board to pay the pension cost if additional funding supplied by the city via declarations of tax increment financing surpluses was sufficient. It wasn’t. Case closed.
But, more broadly, we think school board members should ponder to whom they owe their allegiance. Especially now that 10 of the 21 board members have been elected for the first time in city history under an arrangement that will lead to a fully elected board in 2027, this board owes its fealty to the taxpayers of Chicago and the families who count on CPS to educate their children. And to no one else — including Chicago’s mayor.
In that light, a decision to add more debt to a $9.3 billion pile of junk-rated bonds and other IOUs in order to finance something that isn’t even a legal obligation would not only be fiscally irresponsible — it would also violate this board’s fiduciary duty to the people it serves.
It’s not this school board’s fault that the mayor painted himself into this ill-advised corner by assuming for nearly a year now that CPS would come through — especially after Martinez made clear repeatedly that CPS didn’t have the financial bandwidth to both make the pension payment and pay for a yet-to-be-finalized labor agreement with the Chicago Teachers Union. Johnson and Ervin say the consequences to the city government of paying the $175 million might mean having to dip into reserves, which would risk a second credit downgrade in 2025.
Chicago School Board members: Whatever negative consequences City Hall suffers won’t be your fault if you do your duty and reject Johnson’s demand. For months, the mayor sought to remove Martinez from his perch so that a school leader (and board) could be installed who would do his bidding before this moment of reckoning arrived. He failed. It was Johnson’s responsibility to come up with a Plan B if his bid to strong-arm CPS fell short. We do not know of one.
Chicago School Board members: If you agree to the city’s demand that you refinance $240 million in existing debt to free up cash for all this stuff CPS can’t afford, incurring tens of millions or more in additional future debt costs in the process, you will have made it much harder to put a school system teetering on insolvency back on a sustainable financial track. And you may well have made it more likely the state of Illinois will have to intervene and take some measure of control over CPS’ finances. At the very moment Chicago voters are electing their own school board members for the first time.
At a Tuesday news conference in which Johnson made his closing argument for CPS to debt-finance the pension cost, the mayor compared the school district to an adult child who has failed to launch. “I don’t want to sound like my dad, but at some point they’re going to have to move out,” he said, adding: “It’s a relationship we have to disentangle.”
The metaphor of the irresponsible or unserious young adult, though, strikes us as apt for how the mayor himself has managed this situation and — more broadly — city finances. Beholden as he is to the Chicago Teachers Union for its political support, Johnson straitjacketed Martinez and the board by insisting on no cost-cutting or school consolidation as they face deficits as far as the eye can see. That’s an absurd demand for a district in which a third of the schools serve less than half the students they’re designed to teach.
By saying no, this school board would be the grownup in this dispute, making a tough choice for the benefit of those they’ve sworn to serve.
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