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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.

Rather than demanding reforms and holding the line on labor contracts – something we recommended to Lightfoot – her offer is bringing the district and the city another step closer to bankruptcy.

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):

  1. 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.
  2. 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.
  3. 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.
  4. 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.
  5. 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.
  6. 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). 
  7. 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. 
  8. 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?
  9. 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.
  10. 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.

“Take the district’s offer,” both the Sun-Times and The Chicago Tribune have recommended to Chicago’s teachers.

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:

Appendix 1

Appendix 2

Appendix 3

Appendix 4

Appendix 5

Appendix 6

Appendix 7

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Bill Johnson

Hit the road

BrianKasal

Really disappointing that Mayor Lightfoot is keeping the same old game going. The unions should consider that these actions are short term and could eventually lead to total collapse of their benefits for the entire union, versus making a few concessions today for the good of the whole system and the city that supports it. These selfish desires and the politicians that go along send a message to taxpayers, “we dont care” . How should the taxpayers of Chicago feel about that?

small town girl

I wonder what the bottom of the pay scale is. Do they reach a point in years and steps in which their salary stays the same? Their starting salary is pretty close to the max in downstate rural areas.

Mike

Bottom of the pay scale for the 2018-19 school year is $56,665. That’s from the 2015 – 2019 CPS/CTU teacher collective bargaining agreement which is located here: https://cps.edu/Pages/CollectiveBargaining.aspx The salary schedules (Appendix A, Salary Schedules and Other Compensation) begin on page 195 of 456. Refer to page 214 of 456 which has the following schedule. Lane 1. 1A. Salary schedule for Full-Time Appointed Teachers in 208-day positions. Step 1. $52,958, plus the pension pick up / added salary of $3,707, for a total of $56,665. Pension pickup is when the employer makes a portion of the employees pension contribution, a… Read more »

John

This is what happens when you put an unqualified person as Mayor. She has NO CLUE how to do her job but is getting paid a big salary.

joe blow

she checks off a lot of SJW boxes though so she has that going for her, results be damned

debtsor

I mean, she’s short, and she’s a carpetbagger from out of state – she’s not even from Chicago. What else matters?

S & P 500

I love the story of the Mississippi Bubble in France in 1719. France was broke, so banker John Law had in idea–print money that could be redeemed for gold. Since there wasn’t enough gold to back up all that cash, he told the people to buy shares in Louisiana. The whole thing blew up when the people found out that Louisiana was a worthless swamp. This Chicago fiasco is a similar situation with a government that wishes it could print money.

debtsor

I think the interesting part is the precipitous drop in students over the years. The City of Chicago is an unfriendly place to raise a family and the statistics bear it out.

debtsor

My guess is that she caves and then blames her massive tax increase to the CTU. She’ll say “but you all wanted to pay the teachers, for the sake of the children, I value education too – now here is how you as the city will pay for it. With massive tax hikes: 14% sales tax, 4% local income tax, 12% transfer tax, etc etc etc”

Then she’ll say “Don’t blame me, blame the CTU”

riverbender

I agree. The “it’s for the children” is a time tested proven way to justify every additional spending dollar in the education system. Sometimes I wonder though if it’s really an “it’s for the parent’s” situation as the parents look for a taxpayer provided baby sitting service. One thing for sure, based upon the testing results on the Chicago School System, it isn’t for the student’s educational successes so what else could it be other than for baby sitting?

Richard Hertz

Besides the money that the (?) teachers will receive, some time just visit the CPS headquarters and check out the digs they require to complete their daily jobs. Then why is it that CPS high school grads can’t read?

world with end

This is another wonderfully informative article from Wirepoints. I thought it was astonishingly uncaring for CTU to have such demands while Chicago is in such horrible financial shape. I’m now also astonished that the mayor would offer such a generous package while knowing of the city’s financial condition. When it comes to Chicago and IL, there’s frequent astonishment to be experienced lately.

Rick

All the other unions should now expect the same generosity, and set their demands very high. They know she’s going to cave.

Illinois Entrepreneur

So much good news here in Illinois/Chicago these days. Yet, I bet if you asked many of the voters here who they would vote for in the next election my guess is that they will be punching the (D) straight ticket again. They will not change, because virtue signaling is more important than pesky fiscal issues. They don’t care, and the greedy rich will pay for it. And as for public unions here — umm….what did everyone honestly expect? Lightfoot will cave to the public unions, as all democrats do. The real story will be when the bond market cuts… Read more »

MikeH

Gonna play a bit of devil’s advocate here and say that I’m sure when Lori first announced her designs on the mayor’s race, she actually believed that she’d reform the city. The quickness with which she threw in the towel is quite telling.

willowglen

It is a horrible time to be a leftist socialist mayor. There is no money. To this end, I think Lightfoot was a bit naive. When she saw the extent of the mess, she ran to Springfield for a bailout, not realizing that Springfield is way too broke to bail anyone out. I think she has no choice but enact massive tax hikes – and for the most part – that means really significant property tax hikes. Not a good place to be.

I do think she is sincere about ethical reforms and she has made real progress there. But she never had a plan for the fiscal crisis. There is no plan to be had, except for drastic reforms and reorganization including debt reduction.

willowglen

I agree with you, but she is not capable of making drastic reforms and accomplishing true debt reduction. It is just not in her DNA.

MikeH

You both nailed it. I think when she was running, she got tunnel vision on getting guys like Burke out, not realizing just how big of a fiscal trainwreck she was inheriting.

NB-Chicago

Does anybody know when does cps posts # of student population for the year, aren’t those figures supposed to be released after 30 days from start of school year? Sure # of student will take another nosedive. Maybe ctu wants to strike before student population # are released?

NB-Chicago

Also, it’s my understanding, ctu can’t strike for class size or staffing- just for pay & benifits, which Lightfoots not pressing on

No new numbers out there that we could find…

nixit

IIRC, Rahm didn’t release CPS’s dismal 20th-day enrollment numbers last year until October 26. That was a Friday, of course.

It’s in Lightfoot’s best interest to compile enrollment numbers ASAP.

nixit

“A second-year teacher’s salary will rise from $53,000 in 2019..”

I think it’s higher than that. Per the salary schedule on current contract: 2018-19, Lane 1, 208 Days = $53,892 WITHOUT the pension pick-up. New hires don’t get the pick-up anymore BUT an amount equal to the pension pickup is added to the teacher’s salary. So that teacher’s salary would be $57,665.

Susan

Fortunately for the school children, KhanAcademy.org offers FREE online lesson modules that can allow them to at least keep up their educational progress.
Parents should also contact homeschooling families who have resources in place, in order to quickly access tools for educational continuity during strike.

Children can actually flourish during the strike, when parents get involved to provide alternative learning platforms.

MikeH

At the very least, they might actually learn something useful.

DantheMan

I guess it was a pipe dream to hope a Dem socialist mayor would play hardball with the public unions. She instead will play hardball with the taxpayers, the same as her predecessors.

Well put