CHICAGO (CBS) — The Chicago Teachers Union is incensed over the city’s demand that teachers accept a seven percent pay cut, but Mayor Rahm Emanuel today emphasized he’s fighting a two front battle: not just over a teachers’ contract, but also over pension relief from Springfield.

CBS 2’s Derrick Blakley reports on that score, a visit from the governor didn’t offer a whole lot of hope.

Union President Karen Lewis says teachers feel insulted, but Mayor Emanuel says the city’s demand for a seven per cent teachers’ pay cut is simply facing financial facts.

“While I’m confident we can work through the issues, we have serious fiscal challenges,” Emanuel said.

Chicago schools are facing a billion dollar deficit, $750 million from a pension payments backlog.

“In 1995, when education reform was passed, the legislature allowed the city of Chicago not to make a single pension payment 1995 to 2004, and it wasn’t made,” Emanuel said.

In the first speech ever by a sitting governor before the City Council, Bruce Rauner warned Chicago shouldn’t look downstate for solutions.

“We don’t have the money to simply bail out the city of Chicago,” he said. “That is not an option.”

What the mayor wants is for Chicago taxpayers to stop paying pensions for its own teachers, and teachers outside the city as well.

“Either have Schaumburg, Naperville and Aurora pay what Chicago residents pay, or we pay what they pay,” Emanuel said. “But keeping two separate systems where we get dual taxation is wrong.”

But Rauner argues CPS also gets at least a half-billion dollars in extra payments which no other district receives and he railed against teachers unions demands.

“Those groups should not dictate terms,” Rauner said. “Those groups shouldn’t decide what is done and isn’t done. The schools don’t belong to them. They belong to the families, the parents and the taxpayers.”

Even some progressive aldermen, usually allied with the teachers union, didn’t seem overly upset with the city’s bargaining stance saying it’s there’s still plenty of time to cut a deal.

But help from Springfield? That may be an even bigger challenge.