UPDATE: 10:07 p.m.
(CBS) -- The Chicago Board of Education made its pension payment on schedule Tuesday, but at a cost -- massive layoffs.
The meet the $634 million obligation, the board used a combination of borrowed money, $200 million dollars in cuts and layoffs it promised before talks with the Chicago Teachers Union broke down last week.
The board is expected to lay off 1,400 employees, and Interim Schools CEO Jesse Ruiz said in a statement that classrooms will be impacted.
"As we have said, CPS could not make the payment and keep cuts away from the classroom," he said.
"This is not all teachers," Board of Education spokesman Bill McCaffrey said. "This will begin starting tomorrow in the central office. School based positions won't be impacted until later this summer."
Mayor Emanuel said Tuesday that schools would open on time this fall, but he refused to discuss what classrooms would look like when they did.
Although the 1,400 anticipated layoffs are fewer than half of the 3,000 layoffs Union President Karen Lewis said school board negotiators threatened last week, the union is claiming it was "blindsided."
The two sides met Monday, and Lewis said in the CTU statement that "there was no mention of this action."
"These layoffs prove that the Board never intended to make the pension payment in good faith and that they are using this to justify more attacks on our classrooms," she said.
Lewis blamed "a history of poor financial management by the Board." Ruiz blamed "decades of pension neglect."
CTU vice president Jesse Sharkey told reporters late Tuesday evening that news of the layoffs, "is dismaying news. It will have an extremely harmful effect on students who are disproportionately poor, students of color that are in Chicago Public Schools. These policies are the direct result of a long-term policy of fiscal mismanagement by Mayor Emanuel's handpicked board. He has a banker in charge of the board, David Vitale, who comes out as the president of the Board of Trade, who has run policies that have consistently left revenue on the table."
Word that Chicago schools would make the full pension payment first came in a surprise announcement from Illinois House Speaker Michael Madigan (D-Chicago) who talked to reporters in Springfield Tuesday.
"I've been advised by reliable sources they have cash on hand and they'll be in the position to make the payment before the end of the business day today. The full payment," Madigan said, adding his source "wasn't Rahm."
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