How Brandon Johnson lost his longest political battle

The Chicago Board of Education handed the mayor a stunning defeat.

The longest political battle of Brandon Johnson’s tenure as mayor of Chicago came to an end on Thursday.

And despite stacking the deck heavily in his favor, the mayor lost.

How did that happen? And what happens next?

Let’s dive in.

The infamous loan

Johnson and the Chicago Teachers Union have pushed Chicago Public Schools to take out a $200 million, high-interest loan for more than a year – leaving a trail of charred political capital in their wake.¹

Consider what happened instead of support for Johnson’s loan:

• The entire school board resigned in October.

• CPS CEO Pedro Martinez endured a months-long smear campaign by the CTU, which culminated in his firing just before Christmas.

• A majority of school board candidates who won their elections in November vocally opposed the loan on the campaign trail.

• Johnson’s new CEO, Dr. Macquline King, refused to include the loan in her proposed budget.

• The powerful SEIU Local 73 broke from the CTU and opposed the loan.

• A majority of City Council members signed a letter opposing the loan,² including staunch Johnson allies like Byron Sigcho-Lopez and Jeanette Taylor.

• Chicago Public Schools’ chief budget officer warned the loan would trigger a “downward spiral” of credit downgrades, higher borrowing costs and cuts.

There is no issue on which Johnson has made so many power plays over such a long period to achieve a single outcome. The mayor’s frustration culminated in remarks at a town hall meeting last week.

“You put a Black man in charge of a city and all of a sudden everybody wants to be an accountant,” he said.

But at the Aug. 28 meeting of the Chicago Board of Education, the mayor was poised to finally put this issue to rest.

The budget vote

The 21-member school board only needed a majority vote to approve Johnson’s loan as part of its annual budget.

And the mayor directly appointed the majority of members, going so far as to fill one vacancy immediately before the vote.

The board meeting began with fireworks, as member Che “Rhymefest” Smith called out newly appointed board member Angel Velez for his intent to vote on the loan just minutes after joining the board.

Illinois State Sen. Willie Preston, D-Chicago, echoed those concerns in public comment.

“When you install someone to serve and make a decision as critical as this is a few hours before without anyone they represent knowing who they are…that’s business as usual,” Preston said.

“And I’m highly offended as a taxpayer, as a lawmaker who has been an ally to the city that I love and stay in, and as a parent of Chicago Public Schools students.”

Lengthy debate ensued. The board took its budget vote. And shockingly, most members went against the mayor, including several members he appointed.

The board voted 12-7 for Dr. King’s budget (and against the loan).

Three Johnson appointees voted in favor of the budget: Ed Bannon, Anusha Thotakura, and Cydney Wallace. Another, Debby Pope, abstained.

CPS is the largest municipal junk-bond issuer in the nation for a reason. It’s extremely rare to see school leadership stand up against reckless borrowing this way.

Thank you to all The Last Ward subscribers who contacted their board member on this issue over the last two weeks. And thank you to the 12 board members who stood up to the mayor and the CTU.

What’s next?

CPS finances remain extremely fragile. The Civic Federation put things into perspective in a statement following the vote:

Although structurally imperfect, the budget effectively addresses extraordinary ongoing fiscal constraints while preserving the core mission by avoiding cuts to the classroom. It also avoids risky revenue assumptions and short-term borrowing that would both undermine the District’s tenuous financial standing and increase future deficits.

The Chicago Public Schools still face a major structural deficit next year and beyond. The Federation urges the Board to immediately support CPS Administration in a concerted effort to legally and financially disentangle the District from the City of Chicago, right-size its facilities and operations to correspond to revenue and population levels and trends, continue the work of identifying long-term efficiencies, and collaboratively engage the State in the recalibration of existing revenue disparities.

Only by beginning to prepare now can the District avoid another budgetary crisis next year.

The district avoided disaster by rejecting Johnson’s loan.

But tough choices, such as consolidating near-empty schools and reviving the Chicago School Finance Authority, will be necessary to right the ship.

And as Ald. Bill Conway pointed out, school board members’ responsible choice to reject the loan leaves the city budget with a $175 million hole in what’s already expected to be a billion-dollar deficit this year. In a future edition of The Last Ward, we’ll be reviewing what Council members should be demanding in exchange for a difficult budget vote.

Time for Chapter 9

I argued via a new piece in City Journal last week that local leaders need to get serious about discussing Chapter 9 bankruptcy protections in Chicago.³

Chicago is the only city among the top 15 by population that lacks the power to seek bankruptcy protection. And state lawmakers should change that. Not because Chicago should immediately enter bankruptcy, but because having that option on the table—like every other big city does—forces fair, realistic negotiations.

Days later, Illinois Rep. Mike Quigley, D-Chicago, delivered a speech at the City Club showing what leadership on this topic looks like.

The single largest item we’re dealing with in the city right now is pension contributions. It’s 17% [of the budget] currently. New York’s at 9%. It’s the highest of any major city. The problem just got a lot worse with the bill in Springfield for police and firefighters. Can we not have any more unfunded mandates coming out of Springfield? We need partners who will help, not make it worse. We gotta sit down with our partners and stakeholders here and say, ‘We’re gonna do this together or we’re going to meet in bankruptcy court.’ I’m humored by those who say, ‘Well Chicago can’t file for bankruptcy.’ We sure as hell can get to a point where we can’t pay our obligations. We can’t get there. It is for us, now, this has to be a mission for us to accomplish this. Because I don’t care what side of the political spectrum you’re on. This matters. If all our money is going toward this end, it can’t go to any of the issues that you care about.

Bravo!

In the news

President Donald Trump has suggested he will deploy military personnel in Chicago. This is unpopular among Chicagoans. A new poll from M3 Strategies provides some insight:

• Sending in the Army: 27% support; 70% oppose (net -43%)

• Sending in the National Guard: 33% support; 65% oppose (net -33%)

• Sending in ICE: 33% support; 65% oppose (net -34%)

However, Chicagoans are extremely supportive of hiring more police officers: 75% support; 22% oppose (net +53%). This stands in stark contrast to the mayor’s recent remarks on Morning Joe.

I spoke about the issue on WGN’s Mincing Rascals podcast:

There's a great Ben Franklin quote, ‘Those who would give up essential liberty to purchase a little temporary safety deserve neither liberty nor safety.’ Nick Sposato, who is a very strong Trump supporter on City Council, said, ‘They don't have policing powers. They don't really know what to do. You’ve got 18, 19-year-old kids on the streets, and they're unfamiliar with the city, they're unfamiliar with the streets, and they have M16s’ … The military is not equipped to provide constitutional community policing, which delivers justice for victims. That’s the concern. And I would agree with Eric that it's, at best, a very temporary reduction [in crime]. And who knows, once they leave, that could lead to a big spike in crime. If criminals feel emboldened.

And on messaging:

The messaging [that] the National Guard shouldn't be here should be a message around safety. That it could increase violence, it could increase disorder. I think the wrong message to send is [public safety] is not an emergency in Chicago. That is a poor choice of words. And many of our public officials have been saying that. I think that plays right into Trump's hands … because it seems as though you're not taking the problem seriously … If you had Trump saying we’re going to have the National Guard come and they’re going to ride the CTA, every train, all day, every route, people in the city of Chicago would support that I think. But that’s not what’s being suggested. The scope is not clear. Putting a bunch of military [personnel] downtown is not a good idea. And the militarization of police has a cost. It does reduce trust in police when you have MRAPS and people with M16s walking around … those people aren’t building relationships with anybody.”

My “green light” recommendation on the podcast this week: Go see Waxahatchee with Jessica Pratt at the Salt Shed on Tuesday, Sept. 9.

1. The loan was originally meant to help pay for a new CTU contract, then to cover a one-time, $175 million pension payment to the city.

2. SEIU representatives claimed 30 council members signed their letter opposing the loan, but a public copy listed 27.

3. I did not choose the headline for the piece (“Chicago is on the verge of fiscal collapse.”) My recommendation was, rather, “Illinois pushes Chicago toward insolvency and the nation toward a bailout.” I can’t claim to predict when “fiscal collapse” could occur in Chicago nor whether we’re on an immediate “verge.” I can say promises that can’t be paid, won’t be paid. And Chicago has a lot of those promises.