Chicago Rejects Rauner’s Surprise Pension Proposal

The Chicago Public School system (CPS) has less than a week to make a $634 million payment to the Chicago Teachers’ Pension Fund (the deadline is June 30).

Mayor Emanuel has been pushing the Fund to accept a partial payment; additionally, lawmakers this week considered a bill to extend the payment’s deadline by six weeks, but the measure failed.

On Thursday, Gov. Rauner made a last-minute pitch to help CPS alleviate some pension costs – but the city promptly rejected Rauner’s proposal due to the long-term costs involved.

From the Chicago Tribune:

In a new wrinkle, Rauner said that he would support a proposal for the state to pick up more of the tab for Chicago teacher pensions, an issued pushed by Mayor Rahm Emanuel as Chicago Public Schools faces a massive pension payment due Tuesday.

Emanuel administration officials said that the mayor was blindsided by Rauner’s school pension proposal, adding that the Republican governor’s solution would hurt CPS.

Rauner attempted to address the issue Thursday by offering to have the state pay for the district’s so-called normal pension costs — the annual amount CPS owes to the pension fund, not including years’ worth of missed payments that were signed off on by state lawmakers. In exchange for paying for those annual pension costs, Rauner said the state would stop funding block grants for the district as part of a new school funding formula he said would be put into effect by the end of 2016.

Emanuel officials, however, argued that the deal would cost CPS $400 million.

Anonymous Chicago officials cited by the Tribune called the deal “not a very even trade.”

Photo by bitsorf via Flickr CC License