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The Chicago school board voted Thursday to make a pension reimbursement to the city after 18 months of controversy and leadership turmoil stemming from the payment. But there is one catch.
The board voted unanimously to authorize the $175 million payment to the city to support a municipal pension fund that covers city workers and some non-teaching district staff — but only if the entire $552.4 million tax surplus boost for Chicago Public Schools that Mayor Brandon Johnson has proposed comes through.
Chicago’s City Council must approve that record level of funding from special economic development taxing districts, known as TIFs, as part of the 2026 budget the council must pass by the end of the calendar year. The proposed surplus would provide CPS with almost exactly the $379 million in TIF funding the district’s 2025-26 budget passed in August assumed — plus an amount equal to the pension payment.
The vote on the Municipal Employees’ Annuity and Benefit Fund marks the end — for now — of an intensely divisive chapter for the district that ultimately contributed to the departure of the previous CPS superintendent. Some hope it will build trust between the district and the mayor. Yet others worry about the timing, due to fiscal uncertainty and budget cuts. And the one-year agreement doesn’t resolve pension responsibilities in the longer term.
Some City Council members have said they think the surplus tax amount in Johnson’s proposal is too large. Before Thursday’s special board meeting, some board members said they would prefer to wait until the district actually receives the TIF money before approving the reimbursement.
The CPS budget approved in August said the district would only make the pension reimbursement payment if additional revenue from the city or the state came through.
But district officials assured the board Thursday that the agreement protects the district in the event that it does not get the full TIF amount proposed by Johnson. And some board members argued that approving the agreement now would send an important message of good faith to the mayor’s office and aldermen.
“This is something that as a board we voted on, and it’s important to keep our word,” elected board member Yesenia Lopez said.
Still, a couple of board members said that despite voting for the payment, they are concerned it would siphon away funds that could instead reverse cuts to district custodians, crossing guards, and other positions the district made this summer.
“It absolutely takes dollars away from the classroom and our school communities who need support now more than ever,” said elected board member Ellen Rosenfeld.
Rosenfeld and other board members also called for a longer-term plan to spell out responsibility for the pension payments and disentangle city and district finances.
The city is required by law to make annual payments to the municipal fund. But faced with ballooning payments in 2020, former Mayor Lori Lightfoot shifted a portion of it to CPS. That move angered the Chicago Teachers Union, Johnson’s former employer and close ally. The union lambasted Lightfoot, accusing her of balancing the city’s budget on the backs of students.
With backing from an almost entirely Johnson-appointed school board, former CPS CEO Pedro Martinez refused to pay the reimbursement, citing looming budget deficits. The clash over the payment led to the resignation of the entire school board and to Martinez’s firing by a new board handpicked by Johnson.
But current board members aligned with the teachers union and mayor have argued that chipping in for the pension fund is part of being a reliable partner to the city.
The district has seen some added financial pressures this fall, including federal grant funding the Trump administration has withheld over the district’s Black Student Success Plan and transgender student policies.
Under the new pension payment agreement the board approved Thursday, the district can subtract the $8 million in federal magnet grant funding it stands to lose from the pension reimbursement if it cannot recoup that grant loss in another way. However, as Lopez noted, the agreement doesn’t account for other funding the Trump administration might cut or withhold.
CPS funding has been top of mind for board members this week. Some members joined the CTU on a trip to Springfield Wednesday to lobby for more funding for CPS. Some members also held a Thursday morning press conference to press Chicago City Council members to back Johnson’s TIF proposal.
“We’re trying to be good partners across the board,” said appointed board member Michilla Blaise during the meeting. “We’re trying to make friends. We’re trying to bring home the bacon for CPS.”
In other business, the board voted to table until its next meeting Tuesday a resolution to approve spending $1.4 million to ensure that the financially troubled EPIC Academy, a charter high school on the South Side, can finish out the school year. The school is then slated to close next summer.
The decision to postpone the vote came after elected board member Jitu Brown proposed an amendment to that resolution calling on the district to craft a transition plan with input from the EPIC school community that tries to keep students and staff together at a high-performing school or schools.
District officials noted that the amendment could conflict with the district’s principals contract, which gives school leaders authority over hiring on their campuses. Some board members raised concerns about the last-minute introduction of the amendment, which ultimately failed a board vote.
Brown explained that he had conceived the amendment the previous evening while speaking with the Chicago Teachers Union, which represents EPIC educators, and the advocacy group Advancement Project on the way back from Springfield.
During public comment earlier in the meeting, Andrew Escalante, a social studies teacher at EPIC, asked the board for more engagement with the school community and a plan that keeps students and staff together as much as possible.
“We are people and as people, we deserve honesty, stability and a voice in what happens to us,” he said.
Mila Koumpilova is Chalkbeat Chicago’s senior reporter covering Chicago Public Schools. Contact Mila at mkoumpilova@chalkbeat.org.
