Chicago schools make pension payment; 1,400 jobs 'impacted'

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Posted: Jun 30, 2015 10:14 PM
Chicago schools make pension payment; 1,400 jobs 'impacted'

SPRINGFIELD, Ill. (AP) — The interim CEO of Chicago Public Schools said Tuesday 1,400 jobs will be "impacted" after Illinois lawmakers failed to provide relief and the financially struggling district had to borrow money to make a $634 million contribution to its teacher pension funds.

Jesse Ruiz said in a statement that CPS must make $200 million in cuts, and he blamed Illinois lawmakers for "driving the district further into debt." Mayor Rahm Emanuel, speaking at a news conference earlier in the day, described the nation's third-largest district as being at "a breaking point."

"As we have said, CPS could not make the payment and keep cuts away from the classroom, so while school will start on time, our classrooms will be impacted," Ruiz said.

Ruiz said only that the jobs would be "impacted" beginning Wednesday, without further elaborating on how. A spokeswoman for CPS — which has about 40,000 employees — didn't respond to questions. A city official says Emanuel and Ruiz will lay out a plan Wednesday.

Tuesday was the deadline for CPS to make the mandated payment, and for weeks Emanuel and the district had been pushing lawmakers to approve a 40-day delay they said would provide breathing room to find a longer-term solution. But the Illinois House voted down that plan last week, and bill sponsor Democratic Rep. Barbara Flynn Currie said Tuesday she "didn't have the votes" for the measure to pass and wouldn't call it again.

House Speaker Michael Madigan later said he thought the bill was "moot" because he was told that CPS planned to make the full payment by the end of the day. Asked whether the district would have enough money remaining to keep classrooms open and pay teachers, the Chicago Democrat responded: "I don't know."

The Chicago Teachers' Pension Fund later confirmed the full payment had been made.

Emanuel used the situation to once again call for changes in how pensions are funded. Currently, the state makes the employer contribution to teacher pensions for districts outside Chicago, while CPS pensions are funded by Chicago taxpayers. The mayor calls that system unfair, saying no other districts have to worry about whether to fund pensions or classrooms.

"The school system is supposed to be focused on the education of our children," he said. "Because of the structural inequity and because of the system, Chicago Public Schools now are questioned about whether they make a pension payment, not whether they hit a graduation rate."

Emanuel's critics say CPS gets more money than other districts through other types of state funding.

Senate President John Cullerton introduced legislation late Tuesday that would shift the employer contribution for CPS pensions to the state, among other changes. It's scheduled for a hearing Wednesday. While Gov. Bruce Rauner, a Republican, has supported the concept, he's likely to oppose the Chicago Democrat's bill because it omits other key provisions he wants.

Rauner also had floated a plan to accelerate $450 million in state grant payments that would have been provided to CPS over the course of the year and for other purposes. Emanuel rejected the offer, with a spokeswoman saying using 2016 funds to pay 2015 pension costs "follows the same path that got the schools into the current financial mess."

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Associated Press reporter Sophia Tareen contributed to this report from Chicago.