Chicago Teachers Union and CPS clash over budget issues as contract talks continue amid financial concerns
After months of discussions, both sides are still at odds but agree on one thing: they can manage this school year with a balanced budget, though they have different ideas on how to achieve it. The CTU points to the significant cash CPS received from tax increment financing (TIF) districts as a reason for optimism. They also highlight CPS’s $1.1 billion fund balance as proof that the district has the resources to resolve the contract dispute.
CTU’s research director, Pavlyn Jankov, emphasized that CPS has enough reserves to make a deal. He noted that the historic TIF surplus of $300 million should typically help close the gap in contract negotiations. However, while the fund balance is a positive change from previous years, it doesn’t mean CPS has that cash readily available.
CPS CEO Pedro Martinez insists that the district needs more TIF dollars to manage this year’s budget. He and the Chief Financial Officer, Miroslava Mejia Krug, argue that the $1.1 billion fund balance is misleading. They explain that the district spends its funds on operational costs and often has to take out short-term loans to meet payroll, leaving only a small amount in the bank.
Martinez clarified that if CPS truly had a billion dollars in cash, they wouldn’t need to rely on loans. He also mentioned that the school district can cover the salary raises offered to the teachers union using TIF funds, but they still can’t afford a significant pension payment that the city expects.
The situation is further complicated by the city’s budget needs. Former Mayor Lori Lightfoot shifted some pension contributions to CPS, and now Mayor Brandon Johnson is counting on those funds to balance the city’s budget. Martinez has expressed his willingness to cover the pension payment when federal COVID relief money was available, but now that those funds are gone, he believes that money should stay with CPS.
Looking ahead, the school district is projecting a $700 million deficit next year, which could grow to $900 million in subsequent years. The CTU has agreed to the cost-of-living raises offered by CPS but is still advocating for additional raises for veteran teachers, which they estimate would cost around $25 million annually. CPS’s human resources chief acknowledged the CTU’s role in advocating for their members but stressed that the district must prioritize the salary increases they can afford.
