(Bloomberg) – The Chicago Board of Education has delayed its decision to pay the city $175 million in pension costs, which Mayor Brandon Johnson relies on its 2024 budget.
The board of directors withdraws a proposed amendment that will continue through June into the current year to authorize an additional $139 million in spending and intergovernmental agreement. These funds will come from the city’s economic development dollar, called tax incremental financing or TIF.
According to Chicago Board of Education Chairman Sean Harden, the items will be made later in view of the progress of signing an agreement with the Teachers Union, according to Chicago Board of Education Chairman Sean Harden. Negotiations have been going on for about 11 months.
“We are very, very close to resolving the teacher union contract,” Harden said at a meeting on Thursday. “So, the budget amendment and related projects are withdrawn from today’s agenda that will bring them back to the board at a later date.”
The district’s fiscal year 2025 budget was initially approved in July, but does not cover New York City’s required pension donations or additional costs that are yet to be paid to teachers and major contracts. The proposed amendment outlines how an additional $139 million can be used to cover these unpaid fees.
Pension payments have been at the center of a battle between regional leaders and the city hall. Part of the budget amendment is to repay Chicago’s $175 million in fees to cover non-teacher pensions for school employees such as dry employees or cafeteria workers. The city expects the school district to pay it off.
Johnson suggested Chicago Public Schools to allocate a loan to pay for reimbursement, and CPS CEO Pedro Martinez refused to enforce the option. Martinez said he asked for $484 million in TIF funding, far more than the $300 million received in the region to cover the additional costs.
“We are pleased that Chicago Public Schools and the Chicago Teachers Union have made meaningful progress on the contract agreement,” Johnson said in a statement after withdrawing the agenda item. “Before the vote on the budget amendment, board members expressed a clear desire for the final cost of the contract.”
Johnson added that the city wants to “make sure our district is fully aligned with our teachers and that we are doing everything we can to protect students and protect our schools from harmful policies and potential budget cuts.” President Donald Trump signed an executive order Thursday to largely remove the education sector.
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