The Chicago Board of Education approved an intergovernmental agreement Thursday that promises to give the city up to $175 million to cover a pension payment, but only if the City Council approves taking a massive amount of money out of special taxing districts called TIFs — a move that would result in Chicago Public Schools receiving hundreds of millions in additional revenue.
In the school district’s budget, members already promised that the district would make the pension payment should it get more, from any revenue source, than the $379 million it needed to balance its budget.
If the record TIF sweep proposed by Mayor Brandon Johnson is approved, CPS would get $552 million, which would give the district almost enough to make the full payment.
Acknowledging that they made a commitment in the CPS budget, board members unanimously approved the agreement. The 21-member board is partly-elected, partly-appointed by the mayor.
Board member Michilla Blaise called it an important step. In the past the school board took TIF money, but later refused to provide the pension payment. She said the agreement was needed because the board has “shown ourselves to be a little bit funky.”
“So I’m hoping that this reaffirms the commitment and the partnership between the city and CPS, and I hope that we can go forward together,” she said.
The board was under pressure to approve the agreement and, even with it, the deal could fall through.
Ald. Jason Ervin (28th), budget committee chair, declared last week that the mayor’s budget would not leave his committee without a board-approved intergovernmental agreement.
The massive sweep of the TIF funds is already proving to be a major friction point in the mayor’s budget. The tax money collected in TIFs is supposed to be used for projects in wards. Many City Council members are upset that their TIF funds would be drained, leaving no money for projects, such as parks, libraries and even repairing school buildings.
Several City Council members say they will fight to keep some money in their TIFs, but any reduction in the money pulled could upset the careful math needed to balance CPS’ budget and get the city the full pension payment, which it needs to end the current fiscal year in the black.
With the approval of the agreement, school board members called on City Council members to keep the TIF sweep in the budget at the amount proposed by Johnson.
At a news conference before the special meeting, board members pointed out that more than 30 City Council members out of 50 signed a letter saying they would support a TIF surplus to help CPS, rather than the alternative of taking a short-term loan to cover a deficit. Member Jitu Brown read the names of the alderpeople who signed that letter.
“So we are asking our aldermen now to support the TIF surplus, like you promised you would do,” said Brown, who represents District 5A on the West Side.
School board member Karen Zaccor said, without the $379 million from TIFs, the school district would be forced to make more cuts. These would be in addition to cuts that were made this spring as the district grappled with a $700 million budget deficit.
“There are not enough safe passage workers ensuring that students get safely to schools especially now that ICE is prowling our communities,” said Zaccor, who represents District 4a on the North Side. “Principals are telling us that their schools are not clean because there are not enough custodians. Even though the cuts are not in the classroom, they impact children’s health and their ability to learn.”
A representative from the Chicago Teachers Union said it has developed a tool that will show how much would have to be cut in each ward if the $379 million doesn’t come through.
CPS continues to be in a tough budget position. The federal government canceled an $8 million grant and could pull back more money. Cuts to Medicaid and other benefits could impact CPS’ budget and its students. Meanwhile, CPS is projecting deficits in years to come.
A few school board members said they really want the school district to pocket all the TIF money and not make the pension payment.
“I can’t emphasize enough that we’re making this decision in an incredibly difficult environment when there are countless programs and supports that our families need, many of which could be supported with the money that we will give back to the city,” said board member Jessica Biggs, who represents District 6B on the South Side.
School board members acknowledged that taking money out of TIFs is not a long-term solution. This week, several of them went to Springfield to try to convince state lawmakers to pursue progressive revenue so that more funding could be funneled to education.