Talks between the Chicago Public Schools and the Chicago Teachers' Pension Fund over the school district possibly borrowing $500 million have discontinued.
The school district had been looking to borrow the money to prevent future budget and staff cuts.
CPS and the Chicago Teachers' Pension Fund issued a joint statement Friday, saying that "the organizations have reached a mutual agreement to end discussions on CPS's proposed Fiscal Year 2016 pension payment schedule," something that was a component of the loan proposal.
On June 30, cash-strapped CPS, which faces a more than $1 billion deficit, made its $634 million, state-mandated payment to the teachers' pension fund. CPS made that payment through borrowing and $200 million worth of budget cuts, including 1,400 layoffs.
Chicago Mayor Rahm Emanuel has been calling on the state legislature to help the school district tackle its financial issues. The mayor, for example, wants Springfield to put a stop to the "dual taxation" of city residents as it relates to teachers' pensions. Chicago taxpayers provide funding for two teachers' pension funds -- one for Chicago teachers and another for suburban and downstate educators.
Emanuel has said a city property tax increase could be part of a "grand bargain" to help address CPS' fiscal woes.
"We will continue to pursue comprehensive reform out of Springfield, which includes pension parity and a 21st century school funding formula that doesn't shortchange Chicago's children," said Kelley Quinn, an Emanuel spokeswoman. "However, we will also continue to look at alternatives to close the $1 billion deficit with a goal of maintaining current class sizes."