The clock is ticking on which governmental entity in Chicago — the city of Chicago or Chicago Public Schools, both supported by the same set of taxpayers — will make a required $175 million contribution to a pension plan covering nonteaching CPS employees as well as a hodgepodge of other city workers.
Mayor Brandon Johnson and several of his allies on the City Council are ramping up the pressure on CPS CEO Pedro Martinez and the Chicago School Board to cover that contribution as well as find nearly $140 million more needed for salary increases and other costs tied to new, not-yet-finalized union contracts for CPS teachers and principals. Martinez has urged the school board to say no to the contribution to the Municipal Employees’ Annuity & Benefit Fund, which under state law is the responsibility of the city of Chicago.
At the end of the month, city officials say, Chicago must close the books for good on 2024, and that budget will be out of balance if CPS doesn’t reimburse the city for the $175 million pension payment, which the city government fronted in expectation of being repaid by the school district. If that happens, the city’s credit rating may well be downgraded for a second time in 2025, which would make future borrowing more expensive…