Several school board members requested Thursday that outside experts opine on Chicago Public Schools’ budget woes.
New school boards always take a while to learn and understand the ropes of a school district’s finances, but typically, guidance is provided by the district’s economic advisers, not outside assessors.
However, some members of the new 21-member hybrid school board pushed back on that norm during a hearing Thursday morning. Multiple board members asked for subject matter specialists to join them at a second budget hearing scheduled for Friday to provide guidance on how to cover the costs of an unsettled teachers contract and a municipal pension payment that Mayor Brandon Johnson has requested schools CEO Pedro Martinez pay the city back for.
“You’re an expert at what you do. No shade,” board member Michilla Blaise, from the 5th District on the West Side, said to Mike Sitkowski, CPS’ chief budget officer, after he presented information about the district’s financial situation to board members.
“We should actually have some people — maybe a person from the city, a person from the assessor’s office … and we can have a real discussion, a healthy discussion.”
CPS finalized its $9.9 billion budget for the 2025-26 school year in July without accounting for the pension payment or a new teachers contract. Now, just $139 million is available from the money CPS received from Chicago’s tax increment financing districts, funds around that are allocated by aldermen for special projects.
That is not enough money to cover the budget gap, according to Sitkowski’s presentation. Several top aides to Johnson estimate the gap to be about $240 million.
To add previously unaccounted-for items to the budget, the district is required under law to amend its budget and hold two public hearings. The school board then must approve the proposed amendment by a two-thirds vote. The total process takes 15 days, according to school code.
The board is scheduled to vote on the proposed amendment at its monthly meeting on March 20. If the amendment passes, board members will then take up resolutions to decide where the $139 million goes. If they don’t vote to approve the amendment, the 15-day process will start up again in April.
How the board votes on the proposed amendment will have a demonstrable effect on children in CPS — a point that public speakers and district officials reiterated time and again Thursday.
Johnson’s aides have floated two separate plans to cover the CPS budget gap, and briefed some board members on those options. One is issuing bonds and repaying them with 4.37% or 4.6% interest — a relatively low rate, they say, that could be repaid in about 10 years. Another is refinancing existing debt, which some experts say is financially irresponsible.
The district received a record amount of money from aldermen this year as they relegated their surplus funds from tax increment financing districts. And Johnson’s refinancing proposal, floated to reporters earlier this week, relies on the ability to repay debt with expiring money from TIF districts.
At Thursday’s hearing, board member Jitu Brown, of the 5th District on the city’s West Side, said board members should understand that relying on money from the city’s taxing districts is a delicate balancing act. It’s a give and take, he said.
“If the City Council is making a long-term commitment to say expiring TIFs will come to Chicago Public Schools … do you all believe that if we don’t make that (pension) payment, that they will continue to do that?” he asked district officials.
Martinez said the district is “not allowed to borrow for deficits” and that depending on refinancing debt is not wise either because it would mean borrowing would be “built into next year’s budget.”
“The TIFs don’t belong to us,” he said. “We as a district have no control over them.”
Board members and CPS officials agreed Thursday that the financial strain goes beyond municipal responsibility and should be addressed at a larger, structural level by the state.
Still, several board members asked for outside experts to weigh in.
“I don’t know if you have the bylaws in front of you or how we’ve done it in the past with having subject matter experts here,” said Olga Bautista of District 10.
Blaise of District 5 confirmed to the Tribune after the meeting that she called Cook County Assessor Fritz Kaegi. He was checking his schedule, she said.
“Maybe there’s a loophole or there’s something we’re not thinking about. … Let’s talk about solutions,” she said. “Why can’t we have a subject matter expert?”
An appointed/elected divide
The pension payment in question — called the Municipal Employees’ Annuity and Benefit Fund — covers CPS staff members who are not teachers and some city employees. It began to shift to the district under former Mayor Lori Lightfoot, part of an effort to disentangle CPS’ finances as the school board became an independent, elected body.
Martinez has repeatedly said the pension payment is the city’s responsibility and has encouraged board members to put the available money toward the contract.
Johnson ran his mayoral campaign with financial support from the Chicago Teachers Union and promised that the city would pay the MEABF payment. He went back on his promise after he was elected mayor.
Eleven of the school board members were appointed by Johnson, who is a former teacher and organizer for the CTU, and 10 were elected in November. Of those 10, four ran and won with CTU backing.
All of the board members who requested subject-area experts Thursday were CTU-aligned.
By 2027, all 21 seats will be elected. But for now, the board’s divide will likely play a critical role in its final decision on the amendment and how to account for the district’s budget gap.
Although CTU said it is in the final stages of contract negotiations that have lasted nearly a year, it hasn’t agreed with the district on a final proposal.
That leaves the total price tag of the new, four-year contract unsettled. CPS said Thursday its contract proposal is under the $139 million provided by the TIF. The district’s plan doesn’t account for the $175 pension payment that needs to be paid by March 30.
Both elected and appointed board members appeared to be confused about their options Thursday. Many said they were waiting on a report from the outside financial firm Baker Tilly, commissioned by School Board President Sean Harden. That report is yet to be released.
“We expect to have it in the coming days. It will be a major component to determining what our next steps are for the board,” Harden said at Thursday’s hearing. “The board will have the opportunity to review it and (that will) inform the decisions around how resources are then allocated.”
