CPS struggles with $175 million pension payment demand

Chicago Public Schools (CPS) is facing a financial challenge due to a demand from Mayor Brandon Johnson for the district to pay $175 million towards a pension obligation that should be covered by the City of Chicago. Educators and parents express concern that agreeing to this payment would harm students and strain the already fragile CPS budget. This pension fund, established in 1921, is meant to support city workers, including some CPS staff. According to Illinois law, funding for this pension falls to the city, not the school district. However, since 2020, the city has been gradually shifting these costs to CPS. Initially manageable at $60 million, the demand has now soared to $175 million as federal COVID relief funds have dried up. CPS already struggles with financial pressures, including labor agreements that require the district to allocate its remaining funds. If CPS is forced to make this pension payment, it could lead to severe consequences such as teacher layoffs, increased borrowing at high interest rates, or risky debt refinancing. Any of these scenarios would disrupt student learning and classroom stability. Currently, CPS spends around $817 million each year on servicing existing debt, which amounts to about $2,200 per student. Increasing this debt is seen as reckless and detrimental to educational resources. Parents voice frustrations over decisions being made without community input, urging for a focus on staffing and academic programs instead. The article emphasizes the need for the city to find stable revenue sources to cover pension obligations, rather than shifting costs to an already strained school district. Learning from past budget deficits, the article warns against creating instability for schools and the negative impact on students and educators. Ultimately, the decision to approve the $175 million payment could lead to deeper financial trouble for CPS. Rejecting it would push city leaders to seek sustainable solutions that protect the future of education. Parents and educators want assurance that their voices are heard in decisions affecting their children’s education.