CPS CEO Pedro Martinez defends his school budget plans in City Council hearing

Chicago Public Schools’ highly contested budget dispute landed on the floor of the City Council in a marathon hearing Wednesday where alderpersons questioned schools CEO Pedro Martinez over the district’s budget shortfall and how he intends to secure more funding.

While Martinez made the case for a slew of new revenue options for both this year and the long term, Council members admonished CPS’ lack of a plan for the end of pandemic relief funding this year.

“We all knew that this day was coming, and so we're getting here to this day, and we're still sitting here with unanswered questions around what's the plan going forward,” said 46th Ward Ald. Angela Clay, vice chair of the Council’s Committee on Education and Child Development, which called the hearing.

In the short term, Martinez reiterated his proposal for an unprecedented $484 million in tax increment financing surplus dollars to help fill an operating budget deficit this year. That would take money out of development funds to help both the city and schools budgets.

That's a politically challenging prospect since many alderpersons rely on that money to attract development to their wards — but some Council members seemed open to at least considering the idea.

For more sustainable solutions, Martinez called on Council members to join him in Springfield to push for more state funding. And he advocated for state legislation that would allow CPS to pursue taxes through ballot referendums for repairing, renovating and modernizing school buildings — a change that would free up more of the district’s budget to spend on staffing and programs.

The committee had invited Martinez and both the outgoing and new Board of Education members to the hearing to discuss the school system’s budget concerns. No board members showed up. All seven members announced their resignations earlier this month, and the mayor appointed six replacements a few days later.

Ald. Jeanette Taylor (20th), chair of the Education and Child Development Committee, kicked off the meeting urging alderpersons to “talk about solutions” and not resort to hostility.

“I hear everything else but how we're going to get this budget together,” Taylor said. “And let's not act like it's all on Pedro,” she added, naming former CPS CEOs whose decisions she said contributed to the current shortfall.

Martinez said CPS needs the unprecedented TIF surplus — which would more than double last year’s record surplus — to help pay a $175 million pension payment for nonteacher school staff, plus another estimated $150 million for new collective bargaining agreements with the Chicago Teachers Union and a new principals union.

In response to questions, CPS officials stressed that staffing or programming cuts are not viable options because increased investments in schools have driven reading and math growth since the pandemic. Martinez said even more funding is needed to keep supporting the city’s high populations of students who are in poverty, have disabilities, are unhoused or are learning English.

“There is no school in Chicago that is fully funded without access to TIF, without the state being fully funded,” Martinez said. “This is about really investing in our schools.

“We’re showing evidence of gains, and I believe that the only way we're going to be successful in securing funding from the state and also continuing the support we get from you is to show those results,” he said.

Martinez also argued that teachers deserve a raise and said CPS has offered “reasonable” 4% increases.

“The work is harder today than it has ever been because of the needs,” he said.

Ald. Nicole Lee (11th) asked whether Martinez had a plan once federal pandemic relief funding runs out. The school district spent most of the COVID relief money on staff, which it now wants to keep.

Martinez defended spending the federal COVID relief money on staff. Post-pandemic, he said, staff was drowning in work and needed more support. And he said he wanted to show people, using that money, that it was possible for the public school system to more robustly support its students.

CPS officials warned that a short-term, high-interest loan pushed by Mayor Brandon Johnson would harm the district’s financial health and potentially lead financial institutions to downgrade its bond rating.

“It would put the district in such financial stress it would actually put more pressure on the city, and frankly, give an excuse to the state to continue to not fulfill their responsibility,” Martinez said.

Sarah Karp covers education for WBEZ.