CHICAGO (CBS) — Now that the teachers’ contract is settled, the big question is how Chicago plans to pay for it.

The district says the deal it concluded with the teachers’ union will add some $75 million annually to the district’s already huge, $1 billion budget deficit.

Laurence Msall, president of the Civic Federation, says to pay for it, the city likely will have to close as many as 200 schools.

“It could actually be more, depending on the plan,” Msall said. “We have not seen the plan that the Chicago Public School administrators are going to need to come up with, but it is going to have to be a comprehensive restructuring of the system.”

And he says, another property tax hike is likely.

“But, they’re limited–unless they go to a referendum–to limiting the property tax increase to 5 percent or [the consumer price index], whichever is greater. “And so it is unlikely in this low-inflationary environment that the property tax increase will be enough to close the deficits that they face.”

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Even without factoring in the new contract terms, that deficit is projected at $1 billion for fiscal year 2014. The current budget shortfall is $665 million.

And while everyone’s relieved the strike is over, Msall says the Civic Federation is disappointed the two sides never even got around to discussing what he calls the “big elephant” in the room: The system’s ever-increasing pension burden.

Over the years, CPS has been able to avoid fully funding the teachers’ pension system. As a result, the fund is significantly underfunded to meet future needs of retirees. While the state legislature has given the district an extension until 2059, CPS will eventually need to contribute hundreds of millions of dollars to get the system funded at the required levels.

Teachers currently contribute 9 percent of their salary to the fund.

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