The clock is ticking from the fact that the government formation in Chicago – the city public schools in Chicago or Chicago, and both supported by the same taxpayer set – will make the necessary contribution of $ 175 million on a retirement plan, covering the non -CPS employees as well as for other city employees.
Mayor Brandon Johnson and several of his allies in the City Council are raising pressure on CPS Executive Director Pedro Martinez and the Chicago School Board to cover this contribution, as well as to find nearly $ 140 million needed to increase salaries and other expenses related to new and not finalized CSPs. Martinez called on the school board to say “no” for the contribution to the Annuit Fund and the benefits of municipal officials, which, under state legislation, is the responsibility of the city of Chicago.
At the end of the month, city authorities claim that Chicago should close the books for good in 2024 and this budget will be out of balance if CPS does not recover to the city for a pension payment worth $ 175 million, which the city government faces the expectation of being paid by the school area. If this happens, the city’s credit rating may be reduced for the second time in 2025, which would make future loans more expensive.
Oh, did we mention that the city is planning to sail a huge $ 830 million in bonds with a common debt? Another decrease would certainly be a slight time.
The preservation of the government body owes what another agency and the justification proposes, why the other must pay is difficult for journalists and finance experts. Imagine how confused the ordinary taxpayers of this ridiculous, irresponsible, intergovernmental spitting are.
But the bottom row is not difficult to understand.
There is not enough money, neither in the city’s budget, nor in the school neighborhood, to pay for school workers, as well as what the city says should be the part of the schools in maintaining a deeply funded pension plan from bankrupt.
In the real world inhabited by real people, the answer in such circumstances is yes Reduce costs: Find the parts of the household or business budget that would be nice to have, but they are not absolutely necessary. And then excise them.
But in the world, inhabited by Mayor Johnson and his political benefactors in the Chicago Teachers Union, this option is anathema. He is never worthy of Sygen’s viewing.
So the mayor’s financial team has spent months offering various CPS options to pay the retirement load that everyone adds to one result: getting more debt in a school system that is already The largest issue of municipal bonds in the country.
The latest “proposal” of Johnson’s team is CPS to refinance some of its existing debt and use the revenues to make the retirement payment. They provided valuable small public details (or, so far, CPS) on how it would work. But it sounds suspicious as this fearsome strategy used in past difficult times in Chicago’s financial history – spoon and throw. This means refinancing debt already on books, extending the schedule for repayment and inclusion of budget holes while walking the weight of debt on future taxpayers.
This is a municipal financial practice that is deeply frowning with a good reason and one that the Johnson administration boasted that it did not use even while facing significant fiscal pressure at urban level.
City authorities have said CPS can use additional money that the system expects to receive in the future, as the Chicago tax financing areas are expiring to pay higher costs linked to refinancing, Tribune reports.
Martinez, who will be departing as chief of schools at the end of the school year, has consistently stated that CPS has enough money to pay the higher costs of the expected new working transactions thanks to the record release of TIF, which the City Council approved at the end of last year, which provided all taxation organizations. But this amount is not enough to cover the retirement payment. Not with the amount of expected labor deals.
Amendment to the CPS budget designed to consider March 20 by the School Board will allow $ 139 million to be spent on the TIF surplus for pensions or higher salaries. The Council should follow Martinez’s recommendation and distribute that money in employment contracts.
What about paying a pension? This is Johnson’s problem at the city level. Do you know what he says so? Long established state legislation.
While Johnson and CTU (the two join the hip joint) refuse to see the necessary school consolidations and other savings in an area where one -third of the schools are not even half full, they must be liable for the retirement payment.
CPS and the city will meet the same problem again in a few months when CPS has to set its budget for the next school year. If Johnson and his CTU friends want schools to pay some of this retirement plan, they must change the law to Springfield.
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