Ald. Bob Fioretti (right) talks with Aldermen Scott Waguespack and Ricardo Munoz during Wednesday's City Council meeting. All signed on to the ordinance to redistribute funds to CPS. View Full Caption DNAinfo/Ted Cox

CITY HALL — A leading progressive alderman submitted an ordinance to divert development funds to public schools Wednesday, but the mayor immediately dismissed the proposal.

Ald. Bob Fioretti (2nd) submitted an ordinance proposed earlier in the week by the Progressive Reform Caucus to declare a surplus in Tax Increment Finance funds and redistribute the money back to Chicago Public Schools.

The ordinance cites the $457 million TIFs skimmed off property tax revenues in 2012 — money that would have gone to the schools and other public bodies — and says any leftover funds should be used to address the "deep and unsustainable cuts in virtually every neighborhood elementary school and high schools."

Submitted at Wednesday's City Council meeting, the proposed ordinance was immediately signed by 26 aldermen and was assigned to the Budget Committee, under the chairmanship of Ald. Carrie Austin (34th), who has spoken out against CPS closings.

The Chicago Teachers Union and grassroots groups led by Raise Your Hand held a protest at City Hall Wednesday demanding the redistribution of the development funds.

But Mayor Rahm Emanuel responded, "You cannot either tax your way or TIF your way out of this problem," when asked about the proposal at a news conference following the council session. He said the surplus in TIF funds could be as little as $10 million, and would be a drop in the bucket in the face of the estimated $1 billion CPS budget deficit.

The mayor again blamed the statewide public-pension crisis for a large portion of the CPS deficit, pointing to how under current law the school system's mandatory pension payment will rise to more than $610 million this year from $200 million last year.

The mayor said those development funds would have a minimal impact on the school budget deficit and that pension reform is necessary, adding, "The problem will recur each year until you solve it."

Fioretti and others, however, argue that any available funds should be used to help minimize local school budget cuts this year.