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The Chicago school board will hold a special meeting Thursday to authorize a $175 million pension reimbursement to the city.
The planned vote on an agreement to pay into a city pension fund that covers city workers and non-teaching Chicago Public Schools staff comes less than two weeks after Mayor Brandon Johnson proposed a record $552.4 million funding boost to the district. The intergovernmental agreement the school board will consider states that the pension payment will only take place if the district receives this money, which would require City Council approval.
To help close a gaping deficit in her $10.2 billion 2025-26 budget, interim district CEO Macquline King assumed $379 million from the city’s surplus of funds from special taxing districts, known as TIFs, aimed at spurring development. Under King’s budget, the district would make the $175 million reimbursement to the city only if CPS received an unexpected influx of dollars.
The $552.4 million in surplus funding proposed by Johnson provides roughly that pension reimbursement amount in addition to what the district already included in its budget.
But the district has more recently faced some added financial pressures, including federal grant funding the Trump administration withheld over the district’s Black Student Success Plan and transgender student policies, both of which are the subject of federal investigations.
At its special meeting at 9 a.m. on Thursday, the board will also consider spending $1.4 million to stabilize the financially troubled EPIC Academy charter school this school year and closing the campus next summer.
The payment to the Municipal Employees’ Annuity and Benefit Fund has been a source of intense debate and turmoil in CPS over the past year and a half. With backing from a largely Johnson-appointed school board, former CEO Pedro Martinez refused to make a reimbursement to the city, which had long covered the pension payment until former mayor Lori Lightfoot shifted a growing portion of it to CPS starting in 2020.
Martinez argued that the district could not afford the payment amid looming deficits and it remained the legal obligation of the city. A clash over the payment and other budgetary issues contributed to the resignation of the entire school board and to Martinez’ firing by a new board handpicked by Johnson.
Current board members appointed by Johnson or elected with support from his allies at the Chicago Teachers Union have argued that resuming the pension payment is key to being a reliable partner to the city and at the same time to becoming more independent from the city as CPS shifts to a fully elected school board. Some had even pushed for taking out a high-cost short-term loan to allow the district to make the payment.
Jennifer Custer, an elected school board member who has opposed making the pension payment in the past, said she will support signing the new agreement with the city. She said she would have preferred to wait until the district actually receives the money, especially given some of the uncertainty amid the federal government shutdown and inquiries into CPS.
But she said some of her colleagues on the board felt Thursday’s resolution would be an important “show of good faith” to the city. And she believes the agreement’s wording protects the district if the promised TIF surplus dollars do not come through.
“We have made sure that the district is on solid footing,” Custer said. “We would not be left holding the proverbial bag.”
Mila Koumpilova is Chalkbeat Chicago’s senior reporter covering Chicago Public Schools. Contact Mila at mkoumpilova@chalkbeat.org.
