Chicago Public Schools (CPS) leaders are raising concerns about two new bills in the Illinois legislature that address pension costs for school employees. One bill, introduced by Senator Robert Martwick, would require CPS to begin paying into a municipal retirement fund that covers both CPS support staff and city employees. This proposal has been a point of contention between city officials and the district, with Mayor Brandon Johnson advocating for CPS to take on these payments.
A second bill from Martwick proposes shifting all costs of the district’s separate teacher pension fund from CPS to the state. While this move is seen as unlikely in an election year, it highlights a long-standing complaint from district officials that Illinois covers most teacher pension costs outside Chicago but only pays about one-third of those costs within the city.
CPS officials have stated that these proposals could create significant financial challenges for the district. In a statement, they said: “Without a corresponding increase in state or local funding, this shift would force a choice between pension payments and student education.” The district faces a deficit exceeding half a billion dollars and argues that taking out loans to cover recurring pension payments would only worsen its debt situation.
Martwick described his bills as “placeholders” designed to prompt discussion among city, district, and state leaders about how best to handle these financial responsibilities before the fully elected school board takes office in January. He explained: “There are no easy answers here; there’s no way to make the pension debt magically go away,” adding, “These decisions are challenging, but for the good of the students and taxpayers, they must be made.”
Joe Ferguson of the Civic Federation echoed concerns about CPS’s financial vulnerability. He noted: “The larger problem is that there aren’t meaningful, collaborative discussions between the city and CPS,” adding criticism that current legislative efforts do not clarify where funding would come from.
Estimates vary regarding how much CPS would need to pay annually into the Municipal Employees’ Annuity and Benefit Fund. The district puts this figure at $175 million to $200 million, while a recent budget presentation from Mayor Johnson’s office estimated it at $346 million. In comparison, this year’s teacher pension fund cost for CPS was approximately $660 million—mostly covered by dedicated property taxes.
Last October, Chicago school board members agreed unanimously on a $175 million reimbursement to the city’s pension fund after special tax revenues were allocated by Mayor Johnson to help cover costs. However, some board members previously resisted including such payments without new revenue sources.
Supporters of permanently transferring these costs argue it will help separate CPS finances from those of City Hall as governance shifts toward an elected school board. Detractors caution that doing so under current law—which places responsibility for municipal pensions on the city—would likely result in cuts affecting classroom resources due to increased financial strain.
CPS has warned that passing these obligations onto the district without additional funding could trigger an immediate fiscal crisis when full board elections occur in 2027. As one possible solution, officials suggest having the state assume more teacher pension costs while using freed-up property tax funds for municipal pensions instead.
Martwick acknowledged his bills are still evolving and clarified their intent is not to give any party undue advantage but rather prompt urgent action: “It almost sounds like they’re saying, ‘No, no, no, let’s stay entangled.’ CPS needs to grasp that this disentanglement is real.”
He also pointed out ongoing efforts among Illinois progressives seeking new state revenue sources such as higher taxes on wealthy residents—a move he hopes will eventually allow expanded state support for Chicago teacher pensions.
Some lawmakers recently proposed another measure backed by the Chicago Teachers Union (CTU) aimed at fully funding mandated services like transportation for students with disabilities through adjustments in statewide school finance formulas.
There have also been calls within CPS leadership for consolidating its teachers’ pension fund with Illinois’ broader system covering educators outside Chicago—a step opposed by CTU leaders who fear negative impacts on union members’ benefits.
Hal Woods from advocacy group Kids First Chicago described Martwick’s bills as starting points rather than imminent policy changes: “I don’t think he would stick CPS with a $346 million bill and no way to pay for it,” Woods said. He suggested neither proposal is likely to pass soon unless accompanied by substantial new revenue streams or broader compromises involving all stakeholders.
