(Bloomberg) — The Chicago Board of Education delayed a decision on whether to pay $175 million to the city for pension costs, funds that Mayor Brandon Johnson has counted on to balance his 2024 budget.
The board withdrew a proposed amendment to its own budget for the year, which runs through June, to authorize an additional $139 million of spending and an inter-governmental agreement. Those funds would come from city economic development dollars known as tax increment financing, or TIF.
The 21-member panel, split between elected and mayor-appointed officials, will take up the items at a later date, given the progress being made toward signing an agreement with the teachers union, according to Chicago Board of Education President Sean Harden. Talks have been underway for about 11 months.
“We are extremely, extremely close to settling the teachers union contract,” Harden said during a meeting on Thursday. “So as a result the budget amendment and related items have been withdrawn from today’s agenda and these items will be brought back to the board at a later date for consideration.”
The school district’s fiscal 2025 budget was originally approved in July, but didn’t cover pension contributions requested by the city or additional costs for pending teacher and principal contracts. The proposed amendment outlines how the additional $139 million could be used to cover these outstanding costs.
The pension payment has been at the center of a battle between district leadership and City Hall. The budget amendment was proposed in part to potentially repay $175 million in costs made by Chicago to cover non-teacher pensions for school employees like janitors or cafeteria workers. The city was expecting the school district to pay it back.
Johnson has suggested Chicago Public Schools take out a loan to pay for the reimbursement, an option CPS Chief Executive Officer Pedro Martinez has refused to execute. Martinez has said he requested $484 million in TIF funding, much more than the $300 million the district received, to meet additional costs.
“We are pleased that Chicago Public Schools and the Chicago Teachers Union are making meaningful progress towards a contract agreement,” Johnson said in a statement after the agenda items were withdrawn. “Board members have expressed a desire for clarity on the final cost of the contract before voting on the budget amendment.”
Johnson added the city wants to “ensure that our school district and our teachers are fully aligned and that we are doing everything we can to protect our students and protect our schools from harmful policies and potential budget cuts.” On Thursday, President Donald Trump signed an executive order to largely dismantle the Education Department.
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