Aldermen petition CPS CEO to make $175M pension payment, or risk unbalanced city budget

CHICAGO (WLS) -- The funding feud between Chicago Public Schools and the mayor's office over a $175 million pension payment is heating up.

More than two dozen City Council members have signed on to a letter to schools CEO Pedro Martinez demanding that CPS make the payment.

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Aldermen say if the city does not get that $175 million by the end of the month, the city's budget will become unbalanced, costing taxpayers more money down the road.

Last fall, the city made the advance pension payment for non-teacher CPS employees, based on the expectation that CPS would then repay the city that $175 million. That hasn't happened yet.

Budget Committee Chairman Jason Ervin is now spearheading an effort to pressure Martinez to act.

Ervin was gathering signatures on a letter to Martinez demanding CPS come through on that payment by March 31.

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"The CEO stated they'd make the payment. But, right now, it seems like there is walking that back a little bit. Unfortunately, the payment is not made. The city of Chicago will have to only up another $175 million on a group of employees that don't belong to us," Ervin said.

All this comes as CPS is trying to close its contract negotiations with the Chicago Teachers Union, and as the School Board has scheduled public hearings this week on an amended budget.

Martinez, in a recent letter to CPS families, said the district only has $139 million left in its budget this year, adding, "my administration will prioritize using our remaining funds from this school year on labor agreements."

Without the CPS payment, the city would have an imbalanced budget, which could cause a financial downgrade, which means taxpayers are on the hook for higher interest payments.

"Well, I've never seen this happen before, where we were short by any amount. And, you know, it's unfortunate, because it just shows the complete mismanagement by this administration," 32n Ward Ald. Scott Waguespack said.

"Ultimately, you'll be up to Mayor Johnson, have the conversation with the folks he appointed on that board. Again, it ends up being a little too gray area for me to put my signature on a letter. I do think that CPS needs to figure out how to be a responsible body," Ald. Andre Vasquez said.

Late Wednesday afternoon the mayor weighed in.

"There are efforts to disentangle these leanings that have been relied upon for a very long time. It's very clear that these particular employees that are hired by Chicago Public Schools that it's important that their retirement is secured," Johnson said.

By disentangle, the mayor is referring to separating CPS and the city's financial connections that would have the school district handle its own pension payments, which for years the city had taken on.

Thursday and Friday, CPS will host public hearings on amending its budget.