The Chicago teacher pension debt. That's Paul Vallas.
Mayor Lightfoot has had to clean up the Vallas mess.
Mayor Lightfoot recently paid a $242 million supplemental payment to the City’s pension systems, making good on a funding policy adopted as part of the 2023 budget that helped lift its one junk rating back into investment-grade territory.
It was a rejection of past one-time maneuvers like scoop-and-toss debt restructuring, and completed a move to actuarially based pension payments.
But it was Lightfoot’s move to tap surplus revenues to make the additional $242 million payment that made her unique among officials when it comes to making pension payments.
She’s unique because she’s paying it.
It puts her in sharp contrast to former Mayor Richard Daley (2) and his CPS boss, Paul Vallas who together invented the reality of Chicago teacher pension underfunding and debt.
Vallas, now running for mayor again, would rather talk about something else then his history of CEO of CPS. Anything else. And Chicago reporters seem to have a short memory.
When state lawmakers gave Mayor Richard M. Daley control of Chicago Public Schools in 1995, the deal included sweeping changes to the laws that controlled how the district spent its money.
The biggest revenue shift came from combining several property tax levies—including one earmarked to pay for teacher pensions—into one fund that could be used instead to pay operating expenses.
Daley and Vallas used the power they were given and $62.2 million was diverted from pension payments to operating expenses.
At the time Vallas was applauded by the local press and pundits for fixing CPS’ longstanding budget woes.
They closed their eyes to the long-term damage that Vallas’s diverting of pension payments would do.
Just as they now seem to accept him as a crime fighting expert.
After the 1995 reforms that gave Daley more direct control of the schools and Vallas was appointed CEO, the diversion of pension payments eventually led to the pension system falling to less than 50% funded.
Leaving a mess for Mayor Lightfoot to clean up.
The late great Fred Hess warned that Paul Vallas was mortgaging our posterity and that our children’s children’s children would still be saddled with servicing that debt.