Chicago Schools Sue State over Pension Funding

March 14, 2008 ( - The Chicago Public Schools system is charging it was unconstitutionally required to maintain certain pension funding levels despite a shortfall in state funding.

According to Reuters, in a lawsuit filed in Cook County Circuit Court, school officials said the state has failed to fund Chicago teacher pensions at a level equal to 20% to 30% of the total funding earmarked for the statewide Teachers’ Retirement System, with fiscal 2008 funding amounting to only 5.3%. Officials told Reuters the district has had to make up the funding shortfall to the Chicago Teachers’ Pension Fund out of operating dollars to satisfy a state requirement that it reach a 90% pension funding level by 2045.

Board of Education President Rufus Williams said the school system diverted $131 million in operating funds to pensions in fiscal 2008 and expects to divert another $188 million in fiscal 2009. In addition, officials said the district received no funding boost from $10 billion of pension bonds that Illinois sold in 2003 and would not benefit from Governor Rod Blagojevich’s latest plan to sell up to $20 billion of pension bonds, according to the news report.

The lawsuit seeks a declaratory judgment that the 1995 law which required the 90% funded level only from Chicago Public Schools an unconstitutional funding disparity.

The Chicago school system has about 20% of the total number of public school teachers in Illinois.