CPS, City of Chicago sparring over ‘dangerous levels of indebtedness,’ editorial warns

A left-leaning newspaper has taken Chicago Public Schools (CPS) to task for refusing to pay for recent pension plans or salary increases – a sum totaling more than $300 million.

“There isn’t enough money, either in the city’s budget or in the school district’s, to pay for school workers’ raises and for what the city says should be the schools’ part in keeping a deeply underfunded pension plan from sinking into insolvency,” wrote the Chicago Tribune in a recent editorial.

One of the disputed payments – a $175 million contribution to a pension plan for nonteaching CPS employees and other city workers – may downgrade the city’s credit rating if not reimbursed by the end of March.

“Oh, did we mention that the city plans soon to float a whopping $830 million in general-obligation bonds? Another downgrade sure would be poorly timed,” the editorial wryly noted.

The second disputed payment – almost $140 million for salary increases – is “the responsibility of the city of Chicago” by state law, according to the newspaper.

As a result, CPS CEO Pedro Martinez has encouraged the Chicago School Board to avoid paying it and give it instead to the city.

“Keeping straight on which governmental body owes what to which other agency and the rationale each offers for why the other should pay is difficult for journalists and finance experts,” the newspaper concluded. “Imagine how confused ordinary taxpayers are by this ridiculous, irresponsible, intergovernmental spat.”

‘Scoop and toss’

Mayor Brandon Johnson has proposed refinancing some of the district’s current debt load, paying for the pension plan through the proceeds. 

However, this financial practice is “deeply frowned upon for good reason,” according to the newspaper’s staffers. 

“It sounds suspiciously like that dreaded strategy used in past tough times in Chicago financial history — scoop and toss. That means refinancing debt already on the books, extending the repayment schedule and plugging budget holes while hiking the debt burden on future taxpayers.” 

All this only serves to add more indebtedness “at a school system that already is the nation’s single largest issuer of junk-rated municipal bonds,” the editorial noted. 

Journalists also criticize the longstanding relationship between the mayor and “his political benefactors at the Chicago Teachers Union (CTU),” highlighting its contribution to wasteful spending. 

“So long as Johnson and CTU (the two are joined at the hip) refuse to consider desperately needed school consolidations and other savings in a district in which a third of schools aren’t even half full, they should bear responsibility for the pension payment.” 

Ultimately, this imbalance of power fosters an environment celebrating fiscal irresponsibility, the editorial argues. 

“In the real world inhabited by real people, the answer in such circumstances is to reduce expenses: find the parts of the household or business budget that would be nice to have but aren’t absolutely necessary,” staffers write. “And then excise them.” 

Such common-sense approaches remain “anathema” to the current administration, refusing to give them “a smidgeon of consideration,” the editorial laments. 

‘It’s just become too much’ 

Other news outlets have noted the soaring growth of CPS spending, especially as its students continue to demonstrate poor academic outcomes. 

“Taxpayers are spending tens of thousands of dollars per student at public high schools in Chicago, and at two schools, the number is more than $100,000 per student,” writes The Center Square. “Leo Catholic High School on the city’s South Side, meanwhile, has achieved 100% graduation rates for over a decade at a fraction of the cost.” 

Taxpayers currently spend almost $20,000 per CPS student. 

“It’s so expensive. Again, ordinary, everyday Illinoisans and Chicagoans are going to have to pay for this,” said Wirepoints President Ted Dabrowski. “It’s just become too much. It’s not fair.” 

Once the city and district agree on a new teachers’ union contract, this amount will probably increase, Dabrowski warns. 

“Teachers are either going to get a 9% annual raise or a 12% annual raise. That’s what they’re fighting about.” 

Meanwhile, private schools are spending less and achieving better academic performance among their students. 

In one example, Leo charges only $9,300 in student tuition per year and gives a credit to parents volunteering at the school – up to $3,000. 

“We don’t dis-involve the parents, we involve the community writ large,” said Principal Shaka Rawls. “You’ll find dozens of organizations that’ll partner with us. You’ll find dozens upon dozens of parents that’ll partner with us. We believe in this kind of holistic approach that it takes not only our churches and faith-based organizations, but community-based organizations.” 

Rawls praises the progress of his students, many of whom come in “far below grade level.” 

“Not every student that comes out of Leo will be an academic all-star. We have those, but we also have students who come out of Leo self-confident, positive young African-American men, which we think is just as successful as scoring a 25 or a 27 on the (ACT).” 

High standards – not increased funding – secured the success of these graduates, according to Rawls. The school has enjoyed a 100% graduation rate since 2012. 

“Once we teach the young men the rules of the game, they’ll be successful. I think that, sometimes, large bureaucratic structures inhibit those successes,” Rawls said. 

“At a small, nimble school like Leo, we’re able to pivot and make necessary arrangements so the individual child’s individual needs are met inside the building.” 

‘Protecting the CTU’s monopoly’ 

The district serves more than 325,000 students and has faced inner turmoil throughout the academic year, including the resignation of all seven members of the school board in October. 

The CEO of CPS, Martinez, was also fired Dec. 20 but remains on duty until the end of the school year. 

“I’m not asking for anything extra,” he said in December after receiving a temporary restraining order against the board, which allowed him to continue union negotiations. “I’m asking just to allow me to do the job.” 

Much of the infighting stems from arguments over CTU and its bargaining platform and tactics. 

“CTU’s real goal is more money, more members, less accountability, less principal control over teachers, more job protections and elimination of even public school alternatives for poor families,” wrote Paul Vallas, a former CEO of CPS, on X. “It’s about protecting the CTU’s monopoly and expanding its power.”