By: Ted Dabrowski and John Klingner
If you were holding out for Chicago Mayor Lori Lightfoot to finally show her fiscal reform credentials, you can give up now. That’s the only conclusion you can reach after looking at the new labor contract she’s offered to the Chicago Teachers’ Union. It was posted yesterday in a school district blog and the offer is amazingly rich in raises, benefit bumps and headcount increases. A list of highlights from the proposal is included below. Salary increases alone will cost the district more than $350 million over the life of the 5-year contract.
Lightfoot’s terms are totally disconnected from Chicago’s fiscal reality, especially when you consider the fact that the city and school district are shrinking (appendix 1), both are virtually insolvent (appendix 2), and Chicagoans are on the hook for nearly $70 billion in city and school district pension shortfalls, according to Moody’s most recent calculations (appendix 3). The rating agency already rates CPS five notches into junk, two notches worse than Detroit’s, and Lightfoot’s offer will only make the ratings outlook worse (appendix 4). Higher salaries and an increased headcount will not only drive up operating costs, but they’ll also push up the district’s pension debts – the last thing the district needs.
Remember, it was only two months ago when Lightfoot asked Gov. J.B. Pritzker for a state takeover of the city’s pension debts – a bailout by any other name. Now she’s turned around and offered this contract. As we wrote in July, does she really think she can get away with this?
And let’s be clear as to why the contract offer was posted online. Lightfoot wants to signal to the media and to the public just how generous her contract is – and that the CTU has absolutely no case for a strike.
But in doing so, she’s exposed just how out of touch she is with the plight of the average Chicagoan (appendix 5) and the city’s precarious finances. Just look at some of the highlights from her contract proposal (our comments are in italics):
- The average teacher will get a salary hike of 24% over the five-year period. Guaranteed. Ordinary Chicagoans don’t get guaranteed raises under long-term contracts, nor will they see raises that look anything like that.
- A second-year teacher’s salary will rise from $53,000 in 2019 to $72,000 by the end of the 5-year agreement. That’s a 35 percent pay raise. Again, guaranteed.
- A new teacher starting next year will earn nearly $55,000. The average teacher will see her salary rise to nearly $100,000 by 2024. These salary increases mean the district’s pension debts will jump.
- For health care, CPS will shoulder more and more of the burden while employees’ share stays nearly the same. Deductibles, co-pays, and similar charges would not change for the entire five-year term of the contract. Under this offer, teachers will continue to enjoy these benefits for five years at about the same rate they are paying now. Ordinary Chicagoans, meanwhile, have seen their healthcare costs skyrocket.
- Health service nurses will see an average 14% increase in pay immediately in their paychecks. School clerks will see an 8% increase on average immediately, with up to 12% depending on whether they have an associate degree or not. Teacher assistants (TAs) will receive a 9% increase on average immediately. More guaranteed pay neither CPS nor Chicagoans can afford.
- CPS promised to add at least 200 more school social worker positions to CPS schools and at least 250 additional full-time nurse positions over the next five years. All as CPS loses students year after year (see appendix 1).
- None of these positions will be privatized. The offer includes an ironclad anti-privatization guarantee. All employees hired to fill these roles will become full-time employees and CTU members. Cuts off any chance for cost savings and efficiencies in the future.
- The CTU contract will include language that affirms CPS’ comprehensive policy around sanctuary schools and sanctuary employer protections for immigrant and refugee teachers, students and their families. Costs?
- The offer to SEIU members not only includes the same 16% raise and insurance benefits as CTU – it goes even further. CPS is restoring benefits, adding additional pay, and making other improvements for SEIU members. Yet more unaffordable increases.
- Critical building improvements for more than 300 schools across the city, with 93% of the $619 million in guaranteed capital funding going to schools that serve majority low-income students. Largest-ever capital investment in pre-k classrooms ($120 million). Meanwhile, CPS still has dozens of near-empty failing schools it refuses to close (see appendix 6).
All the above ignores the fact that CPS teachers are already the highest paid among similar, large districts in the nation, according to the NCTQ (appendix 7). That gives the average career CPS teacher a starting pension of more $70,000 in yearly benefits, or more than $2.2 million in lifetime benefits.
What’s amazing, if not surprising, is how the CTU continues to demand even more than what CPS has already offered – the union wants more in benefits and more hiring guarantees.
Unfortunately, that’s making CPS’ proposal look “reasonable,” at least when compared to the union’s demands.
Their recommendations ignore a simple fact: Chicagoans can’t afford what Lightfoot is offering. In an ideal world, she’d rescind her deal, but that’s obviously not going to happen.
Lightfoot made a big mistake by ignoring what happened to her predecessor, Rahm Emanuel. He got rolled again and again by a militant CTU. The week-long strike in 2012 and a one-day strike in 2016 eliminated any aspirations for reform Emanuel may have had.
Mayor Lightfoot thought that by playing nice, she’d win points with the union. But with over 90 percent of teachers voting to authorize a strike, it’s clear she’s made a terrible mistake.
Read more about why Chicagoan’s cant afford the proposed contract with the CTU:
- Is Lori Lightfoot ready for a potential Chicago teachers strike?
- How Springfield Should Authorize Lightfoot To Negotiate With Chicago Teachers Union (But Won’t)
- Chicago’s Lightfoot demands a state taxpayer bailout, then offers CTU a 5-year contract, 14% raise?
- Why Chicago’s Lightfoot should push for a pension amendment, not tax hikes