Hiring, Firing, and Striking: How the Chicago Teachers Pension Is Killing Schools Softly
Now that the spectacular 4th of July fireworks display at Navy Pier has fizzled, and the thousands of "deadheads" have smoked their last joint at the Grateful Dead farewell concert at Soldier Field stadium, I am left to ponder the less euphoric aspects of my beloved city.
Just as I was putting my feet up to enjoy summer break, Mayor Rahm Emanuel and interim CEO of CPS Jesse Ruiz announced that they were laying off 1,400 central office and school employees. They also said they were slashing $200 million from the school budget, mostly in special education and sports programming, to avoid utterly destroying the city's public education system.
Didn't Emanuel and Ruiz tell us that the historic 50 school closings of 2014 would begin to right-side the financially strapped Chicago school district?
Well, yes, that's what they said, but...
To make it through just one more year, the Chicago city counsel last week approved the school district's borrowing of $200 million dollars, with a $935 million line of credit. (This is an expensive loan, considering the district has a junk bond rating.) Though this $1.1 billion loan will allow CPS to pay its bills through the 2015-16 school year, none of the money would pay the $700 million pension payment that's due again next year.
What will happen then? My guess is more teacher layoffs, larger class sizes, higher property taxes, and a mass exodus of middle-class residents with young children.
The bright-ish side of all this is that Governor Bruce Rauner and the state legislature went ahead and approved $7 billion in education spending (though down from last year). This is a big deal because our elected officials in Springfield (the capital of Illinois) ended the fiscal year in a deadlock without passing a 2016 budget, which means Illiniosans are now living through a partial government shut down. Fortunately for us, schools are set to start on time.
But they may not stay open in Chicago. Chicago Teachers Union (CTU) reached an impasse with the city board of education two weeks ago during negotiations for a new teachers contract. While it appears that the CTU does not have enough time to legally call a strike at the beginning of the school year, many speculate that teachers will strike in November or December.
The biggest point of contention goes back to the teachers pension. The CPS says that it can no longer allow teachers to pay just 2 percent into their pension fund while it contributes 7 percent on behalf of the teachers. The district wants teachers to pay the entire 9 percent; in essence, asking teachers to take a 7 percent reduction in take-home pay while still agreeing to work a 20 percent longer school day.
Since the 1980s, when teachers went on strike much more often, both the CTU and CPS have used increased pension contributions as a bargaining chip in lieu of higher wages. The problem is that on and off since 1995, CPS has more often put IOUs into the pension fund than dollars, something they could never have done with teacher salaries.
When asked for words of wisdom regarding CPS's financial woes, former interim Chicago schools chief Terry Mazany put it this way: "My concern is that we're ending up pitting the interest of the children and fully funding their education against the interest of the retirees and fully funding their hard-earned pensions, and that's just not a fair situation to put people in. ... [We need] to be able to recognize the true cost of educating Chicago's children."
In my 12-year career as a teacher, it's only been in the past four years that I have stopped to research just how expensive "free" public education is. My stint as an education blogger has compelled me to crunch education numbers besides just my salary, my raises, and (sometimes) my school's budget. I've come to realize just how opaque and not-transparent those numbers really are.
Once in 2008, I dared to challenge a representative from the Chicago Teachers Pension Fund who was leading an all-staff meeting at my school about our pensions. The man immediately shut me down; he actually yelled at me (I don't think he wanted to come to a charter school, anyway). All I had asked him was how come he kept "guaranteeing" us these high rate of returns from our pension when all investments by their very nature have risks and cannot be guaranteed.
As a mother of three kids, two of whom are CPS students, I cringe at the thought of sacrificing the quality of their education to fund my retirement. It makes me angry that the mayor-appointed board of education promised benefits to teachers that they knew they could not afford, and that the teachers union played along with the game, leading workshops for teachers about our "guaranteed" retirement benefits instead of suing the pants off the district for not funding our pensions. This pension mess has put all aspects of profession at risk.
The state of Illinois' Constitution says that public pension benefits cannot be "diminished or impaired," and the Illinois Supreme Court unanimously ruled that the politicians cannot change the terms of the pension benefit. So while this may "guarantee" my pension, it is leaving a painful, bloody trail of red ink over the budgets of every public service in the state.
But despite the 1,400 education layoffs, Chicago's hiring!
Mayor Emanuel is in hot pursuit of a new CEO of schools to replace Barbara Byrd-Bennett who stepped down in May under the shame of a FBI investigation into a misappropriation of funds. (The mayor also recently replaced four of the seven school board members who chose not to renew their expired terms.)
Any of you interested in taking CPS' top spot? He who steps his toes into the ring of Chicago pubic education and politics will most certainly experience the fireworks of the 4th of July and the mind-numbing fog of a Grateful Dead concert each and everyday! But for some reason, every time I think about the Chicago Teachers Pension Fund, I hear Lauryn Hill singing "Killing Me Softly."
*Minor updates made on 7/11/14