CHICAGO (Reuters) – The cash-strapped Chicago Public Schools called for binding arbitration on Wednesday to reach a contract and avoid a threatened strike by teachers.

But the union representing 27,000 educators and support personnel at the third-largest U.S. public school system immediately shut the door on the proposal.

“We don’t need binding arbitration because we can strike,” Chicago Teachers Union President Karen Lewis told the City Club of Chicago on Wednesday. “We’ve got 26 more days to work something out.”

In a letter to Lewis, Chicago Public Schools Chief Executive Forrest Claypool asked the union to agree to final and binding interest arbitration to avoid a strike that “would be devastating to our students and parents.”

He also warned that a strike, which could happen as soon as next month, would fuel anti-Chicago Public Schools forces in the Illinois capital.

Republican Governor Bruce Rauner is pushing for a state takeover of the Chicago public school system, which is struggling with a $1.1 billion budget deficit largely caused by escalating pension payments.

The arbitration plan surfaced after union officials rejected a nonbinding third-party arbitrator’s report released on Saturday that supported the school district’s January contract proposal, which the union turned down in February. That contract called for raising teachers’ pension contributions, along with moderate salary increases.

The union cannot legally strike until 30 days after the release of the arbitrator’s report.

In her speech to the City Club, Lewis called Rauner “the new ISIS recruit” and accusing him of committing “acts of terror” against the poor and working class due partly to the lack of a state budget.

Rauner’s office said that rhetoric “has no place in American public discourse and sets a terrible example for our kids.”

Lewis joined in the school district’s call for a new school funding formula.

“We understand the cupboards are fairly bare and people are looking at crumbs. What we do say is we want the ability to have you rearrange how you dole out the crumbs,” she said.

State funding to Chicago Public Schools would drop by $74.4 million under Rauner’s proposed fiscal 2017 K-12 school budget.

On Tuesday, top school district officials called on Illinois lawmakers to adopt a new school funding system to ensure districts with a high percentage of low-income students received their “fair share” of state dollars.

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