About 40 teachers and staff from Chicago’s free high school for the arts have been negotiating their first contract for eight months, and now, they are threatening to set a strike authorization vote if they don’t make progress soon.

About 600 students, freshmen through seniors, go to ChiArts, a privately run Chicago public school, which offers conservatory classes in visual arts, performance arts, theater, music and creative writing.

On Monday, teachers held a rally in front of the school in the West Town area. Hundreds of students walked out of the school to show solidarity with their teachers.

They are demanding pay raises so their salaries are comparable to traditional CPS teachers and that management begin paying into a pension system for them.

“We lose good teachers every year and that has to stop. But, more importantly, we are not second class educators,” said Sunni Ali, who has taught at the school for 10 years.

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The Chicago Teachers Union contends that when salary, pension and benefits are taken together, ChiArts teachers receive about half of the compensation of the average traditional Chicago Public Schools teacher.

They also want smaller class sizes and more money to buy supplies for their classrooms.

If a strike occurred, it would be the third time this school year that teachers from publicly funded, privately run schools in Chicago walked out.

But the two other strikes involved charter school teachers, and ChiArts is what’s called a contract school. The Chicago Teachers Union, which represents ChiArts teachers, said it would be the first contract school strike in the nation’s history.

Contract schools are hybrids of charter schools and traditional public schools. ChiArts is one of only a few contract schools currently open in CPS.

Contract schools are funded more like traditional schools than like charter schools. Charters get a straight stipend per student, but traditional and contract schools get a lower stipend per student and money to cover administrative costs.

Also, state law requires charter schools to be open enrollment, with students chosen through a lottery, but ChiArts is allowed to select its students through an audition process.

Teacher Andrew Van Herik said that ChiArts’ administration maintains that, because the law does not specifically mention contract schools, they bypass some of the other laws that pertain to traditional public and charter schools. He said this is how they avoid contributing to the Chicago Teachers’ Pension Fund and holding closed board of directors meetings.

Van Herik said a lack of transparency is a big problem. ”They are more secretive than any of those schools,” he said.

The teachers say they are frustrated that they have been prevented from participating in the ChiArts board of directors meetings. The rally, held Monday afternoon, took place at the same time as the downtown board meeting. The union sent two teachers to attend.

ChiArts management did not respond to WBEZ’s request for comment nor did they answer questions.

ChiArts executive director Jose Ochoa sent a letter to parents, saying the board did agree to allow teachers to come to the public comment portion of the board of directors meeting.

The letter also said the school “can’t afford to pay for all they [the teachers] want.” It said ChiArts is challenged by having only one campus and a small number of students. The other private operators in Chicago that faced strikes have multiple campuses and therefore more ability to reduce overhead costs to meet teacher demands, according to the letter.

ChiArts raises as much as $3.5 million annually, according to Ochoa’s letter to parents. But he said that money is needed to pay for the arts programming the school offers for three hours every day.

Sarah Karp covers education for WBEZ. Follow her on Twitter at @WBEZeducation and @sskedreporter.