The long-simmering standoff between City Hall and Chicago Public Schools leadership that just blew up in the public eye leaves Mayor Brandon Johnson caught between the union that bankrolled his campaign and the school system he’s charged with leading.
The latest strife at CPS, stemming from the mayor’s unprecedented push to oust CEO Pedro Martinez in the midst of stalled contract negotiations with the Chicago Teachers Union, raises questions about longer term political fallout for Johnson, who’s already fighting on several fronts.
His effort to bounce Martinez was expected to come to a head at Thursday evening’s Chicago Board of Education meeting, but board members opted not to take up the issue. That means the power struggle between the Chicago Teachers Union-backed mayor and Martinez continues, while the school board and the families who send their kids to CPS schools wait to see how the fight plays out.
Sources from both sides say the schools chief’s days on the job appear numbered. The only question is a matter of how soon he gets canned by the seven-member school board, which was handpicked by Johnson and will remain controlled by mayoral appointees following the January transition to a hybrid elected school board.
At stake are CPS’s $9.9 billion budget — and its structural deficit that remains a liability; the teachers’ union ambitious hopes for its next contract; and a nascent five-year educational plan with sweeping implications for the district’s 320,000 students.
With November elections to Chicago’s first elected school board looming, the mayor’s handling of the situation has emboldened political opponents who see a perfect opportunity to tag him as beholden to the powerful teachers union, where he once worked.
The school tempest also threatens to imperil Johnson’s other goals as he tries to get a 2025 budget through a deeply divided City Council where many members are backing the beleaguered school CEO, and deals with harsh criticism about his decision to shut down the ShotSpotter gunshot detection system.
Johnson, for his part, has kept mum on specifics despite a flurry of movement from allies behind the scenes to ratchet up the pressure against Martinez.
“This is really not about discussing personnel issues,” Johnson said Thursday when asked what the CPS chief did to lose his support. Martinez has said the mayor asked for his resignation last week after he refused to take on a high-interest loan to cover a pension payment for CPS retirees as well as the upcoming CTU contract.
Pressed to elaborate, the mayor said: “The individuals who have been responsible for the upheaval in this city, they no longer have a place, and so of course they’re going to try to create tension. But the people of Chicago voted for me to transform this school district, and that is what I’m going to do.”
Uncharted territory
The relationship between Martinez, a holdover appointed by former Mayor Lori Lightfoot in 2021, and Johnson, who came up in politics as a CTU organizer, began on a promising enough note.
Martinez had CTU president Stacy Davis Gates’ endorsement to stay on when the transition took place in May 2023 and developed an unexpected rapport with Johnson at first.
But things soured during the spring session when it became apparent Gov. J.B. Pritzker would not budge on the union’s demand for $1.1 billion in additional funds as contract negotiations heated up. The CTU blames Martinez for not doing enough to lobby Springfield.
The Johnson administration instead pivoted to a plan to issue a high-interest loan that would cover some of the upcoming teachers’ raises as well as a city pension payment that goes toward nonteacher CPS employees. The district flatly refused, and the CBOE sided with Martinez during its July vote to pass the 2025 budget — a stunning rebuke of the mayor.
After several weeks of City Hall turning up the heat on CPS to reverse course in a budget amendment, Johnson last week asked for an “amicable separation” from Martinez, sources told the Tribune.
The resulting furor has been anything but amicable, shining a spotlight anew on the close relationship between Johnson and the CTU.
“There’s only one reason why Pedro is being asked to resign right now, and that’s because he’s unwilling to do the bidding,” former CPS CEO Janice Jackson said. “Doing this now in the middle of negotiations, beyond being unprecedented, I think it’s just reckless and irresponsible. … What is the responsibility to the taxpayers if you have everybody at the table negotiating and they all have one thing in mind, or one goal, which is to get the best contract despite not being able to afford it?”
Martinez’s refusal was followed by a flurry of political maneuvering that included the CTU accusing him of exploring closing schools, which Martinez denied. The school board on Thursday adopted a moratorium on school closings until 2027 in order to blunt that attack.
Martinez’s situation became messier still when his office released a statement attributed to CPS and the school board that board President Jianan Shi said he knew nothing about.
Now all eyes are on the Johnson-appointed board to see if they will cave before their terms are up in January. Shi still has not said publicly how he leans on firing Martinez, though he echoed the mayor’s refusal to discuss “confidential or personnel matters publicly” during Thursday night’s meeting.
Meanwhile, Johnson opponents are lining up to publicly back Martinez, further complicating the political calculus for the mayor.
The campaign to save Martinez has included a letter of support with 24 aldermen as well as Jackson and Arne Duncan, another former CPS chief and ex-U.S. Education Secretary.
“It’s a little hard to understand. The goal of any school district is to improve student achievement, accelerate student learning, and Chicago’s done that collectively extraordinarily well,” Duncan told the Tribune. “It reminds me a little bit of when the ‘90s Bulls broke up. They were winning, and they imploded from the inside, and never won like that again.”
CTU President Stacy Davis Gates, however, described Martinez’s backers as the “last gasp of neoliberal education.”
“You see people fighting to continue to harm the children of the Chicago public schools, and in particular, Black children,” Davis Gates said in an interview, alluding to the mass school closures under Mayor Rahm Emanuel and Duncan. “It’s like going backwards. It’s like going back to 2013.”
State Comptroller Susana Mendoza, who ran unsuccessfully for mayor in 2019, released her own long statement Tuesday lauding Martinez’s leadership and saying she and other elected officials “stand in firm opposition to Mayor Brandon Johnson’s request for CEO Pedro Martinez’s resignation.”
Davis Gates has denied playing a hand in Martinez’s attempted ouster even as she called him a “clown show CEO” as recently as Tuesday, and the CTU leadership team has given aldermen the full-court press on why Martinez is a poor schools chief.
In late August, amid rumors the mayor wanted Martinez gone, members of the City Council’s Latino Caucus attempted to mobilize a majority to issue a statement of confidence in Martinez. The effort was quashed after CTU officials caught wind and began calling caucus members who expressed sympathy for Martinez in the group chat that day, sources told the Tribune.
Among progressive aldermen opposed to firing Martinez were Alds. Daniel La Spata, 1st, and Andre Vasquez, 40th, the latter of whom argued: “It would also be a concern that the CEO would be used as a scapegoat for such a loan, just to be cut anyway.”
But Johnson ally Ald. Carlos Ramirez-Rosa, 35th, told the Tribune the real fiscal malfeasance is his colleagues ignoring the need to account for the pension payment toward the Municipal Employees’ Annuity and Benefit Fund.
The $175 million MEABF obligation used to be the city’s until Lightfoot shifted the burden onto CPS, a move initially opposed by Johnson but now one he is fighting to preserve as he faces a nearly $1 billion budget gap in 2025 and a $223 million one at the end of this year. The school district did not include the MEABF payment in its budget passed in July, punting the responsibility back to Johnson and aldermen.
“It’s up to Pedro to ensure there’s not turmoil in the school district. He’s failing to do that,” Ramirez-Rosa said. “The CEO of CPS has to come up with a plan to pay the CPS pension payments. If a loan is the best way to do that, then unfortunately that is the best way to do that.”
Ticking financial and political bomb
The school board in July passed the district’s $9.9 billion budget that balances a $505 million deficit but does not answer how to pay for future collective bargaining costs from the CTU’s 30,000 members and the Chicago Principal Administrators Association’s over-1,200 members. A budget amendment will be needed.
CPS most recently offered CTU salary increases of 4% to 5% over the next four years in its counteroffer to the union’s April demand for 9% annual raises. District Chief Budget Officer Mike Sitkowski said at an August public bargaining session with the union that CTU has submitted more than 700 contract proposals, and just 52 of them would produce a deficit of $2.9 billion next school year, growing to nearly $4 billion by the 2028-29 school year.
The mayor’s team urged CPS to issue $300 million in long-term bond debt to cover the start of the 4% raises as well as the MEABF payment in the 2025 budget but was shot down by the district, which charged in an internal memo: “This strategy would be counter to our District’s commitment to fiscal responsibility. … This could be thought of as putting your credit card payments that you can no longer afford on your mortgage payments.”
In the July document obtained by the Tribune, district officials warn that issuing long-term debt with no revenue source could lead to more borrowing down the line, triggering a new cascade of downgrades from credit rating agencies at a time in which CPS remains the largest junk bond issuer in the U.S. and faces higher borrowing rates as a result.
Davis Gates did not answer directly when asked whether she supports the $300 million bond debt plan. “No one is asking for a loan,” she said. “Chicago Teachers Union is asking for a vision of how you fund our public school system.”
She added that Martinez is not “serious” about securing more revenue or filling 1,200 teacher vacancies.
“This obsession only with our contract and only with this loan means we’re missing the bigger picture, which is why I refuse to talk about the loan,” Davis Gates said. “Talking about the loan is Pedro’s way of distracting us from the fact that he doesn’t have a plan. … In fact, talking about financing our contract is a distraction from the finances of the district as well. We got bigger challenges than a loan.”
CTU messaging against Martinez has pointed to loans taken out during his time as CFO of the district from from 2003 to 2009. But the memo argues the main driver of the district’s current structural deficit comes from 2014 to 2017, when CPS filled deficits with several years of “crisis” borrowing in lieu of cutting expenses.
If CPS takes five years to pay the proposed $300 million back, it could cost over $434 million and grow the 2026 budget deficit to $951 million, the memo estimates, though that speculation hinges on unknown factors such as more funding coming from the state.
“That’s an extremely expensive way to close a budget gap, and it pushes a lot of the costs on to taxpayers 10 to 20 years from now,” said Justin Marlowe, director of the Center for Municipal Finance at the University of Chicago. “I think CPS was wise not to use that strategy, and I hope they don’t use it.”
The road from here
All of this is playing out under the backdrop of Chicago’s first elected school board races this November, which will be seen as a referendum on Johnson and the CTU’s education agenda as candidates are sure to face questions on Martinez and the loan on the campaign trail.
There are two more school board meetings in 2024 before January’s hybrid board is installed, with 10 elected members and 11 appointed by the mayor. The body will be fully elected come 2027.
To lose his position, Martinez would have to be voted out by the full school board. If the body fires him without cause, he would be entitled to stay on for six months and receive 20 weeks of severance pay, but the dynamic with the board would surely be contentious. If the board were to fire Martinez “for cause,” his contract would be terminated immediately without severance pay.
But uncertainty remains over whether the latter path could blow back in the board’s faces via a messy legal battle with Martinez.
Both school board and district leadership are concerned that the high-profile bid to remove Martinez is distracting from the district’s five-year strategic plan to shift resources into neighborhood schools and “underinvested” communities, a longtime promise of Johnson’s. In addition, departing CEOs often take their cabinets with them, leading to challenging turnover in the midst of the school year.
Ensuring the governor and state legislators don’t get spooked by the dysfunction in Chicago is also critical, as Johnson and the CTU have seen their political capital in Springfield dwindle this year. Still, they continue to clamor for increased state funding for CPS.
Pritzker distanced himself from the turbulence this week while also appearing resigned to its outcome.
“It seems challenging to change out the players in the middle of a negotiation,” the governor told reporters Wednesday. “But having said that, it is the prerogative of the Board of Education and the mayor to make a recommendation.”
