Copyright Chicago Sun-Times
The Chicago Board of Education will be asked Thursday to approve a contract to reimburse the city for a long-disputed $175 million pension payment for non-teaching school employees — but only if the City Council agrees to declare a more than $1 billion tax increment-financing surplus to bail out Chicago Public Schools. In a letter to City Council members earlier this week, Board President Sean Harden thanked the majority of alderpersons who twice “expressed support for an unprecedented TIF surplus to help balance both the city and CPS budgets.” The letter reminds alderpersons that the board approved a budget that “commits to paying the District’s portion” of the Municipal Employees and Benefit Fund pension payment “with TIF surplus funds that exceed $379 million, and we are prepared to codify our commitments” in an intergovernmental agreement that “outlines expectations and timeframe.” But the letter states, “At a time when public education is under attack and federal resources are in jeopardy, we believe that it is imperative that City Council support the $552.4 million in TIF surplus in Mayor Johnson’s budget proposal that protects the classroom and prioritizes students.” To reach $552.4 million for the CPS share of the TIF surplus — 52% — the total surplus would have to be at least $60 million more than the $1 billion surplus that the mayor talked about declaring. If it’s no more than $1 billion, as Mayor Brandon Johnson described in his budget address, then CPS would only reimburse the city for $140 million after failing to make any pension contribution for the last two years. Even at $1 billion, Johnson’s plan to double last year’s record TIF surplus is no sure thing. It has emerged as one of the most controversial elements of his proposed $16.6 billion 2026 budget. The mayor’s proposed budget is balanced by nearly $600 million in tax and fee increases on businesses and wealthy Chicagoans. On the first day of City Council budget hearings, mayoral allies and critics alike were united in their opposition to a TIF surplus that they fear could derail or, at the very least, delay indefinitely improvements to their local schools, parks and libraries, as well as job-creating economic development projects. On Wednesday, Education Committee Chair Jeanette Taylor (20th) said Johnson will have a hard time getting the 26 votes needed to approve a $1 billion TIF surplus. “Hell no… I am only one of the aldermen [who] is not about to wipe every last one of my TIFs — especially when there was never a conversation with us about what projects are in the queue and what projects are we trying to do before we do that,” Taylor said Wednesday. “While they will replenish, I’m not willing to gut all my TIFs to save Chicago Public Schools, which have been in financial ruin since [former CPS CEO] Barbara Byrd-Bennett” was convicted for shaking down a CPS contractor. Taylor said Rules Committee Chair Michelle Harris (8th) was among the most outspoken critics of the $1 billion TIF surplus. “She is loyal to the seat. She don’t care who sits on that 5th floor. But if they did not have a conversation with her and they just came up with, `We’re gonna wipe these TIFs — no. We’re not doing that,” Taylor said. Budget Committee Chair Jason Ervin (28th) declared last week that the mayor’s budget would “not leave this committee without a signed intergovernmental agreement from the Chicago Public Schools related to their pension obligations... We must have that in order to move forward... on this budget process.” Ervin demanded that the city be reimbursed for the entire $175 million pension payment for nonteaching school employees that triggered the mass resignation of the mayor’s appointed school board and the firing of Chicago Public Schools CEO Pedro Martinez. On Wednesday, Ervin was asked whether Harden’s promise to pay the city “TIF surplus funds that exceed $379 million” would be enough to satisfy him and his colleagues, and convince them to approve the $1 billion surplus. “I am interested in them living up to their responsibility at the [$175 million],” Ervin said. “It sounds like they’re moving in the direction that could be beneficial to us… I’m glad to hear that they are amenable to moving forward with paying a portion of their pension obligation… We’ll get to where we need to get to, but it is at least positive that they’re considering listening to what we’re asking for.” During last week’s hearing, Ervin complained that 70% of the TIF surplus is “coming out of socially economically disadvantaged areas” like his own West Side ward. The Budget chair hedged when asked Wednesday whether Johnson can get the votes he needs to approve a $1 billion TIF surplus. “We have a proposal and we’ll land the plane somewhere,” Ervin said.
