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By: Mark Glennon*

Thursday at 6:00 p.m. Mayor Lightfoot will deliver a genuinely historic speech on her plans for dealing with Chicago’s fiscal crisis. Will she break the mold by proposing the long overdue list of drastic reforms the city needs?

If the city’s negotiations on a new contract for the Chicago Teachers Union are an indication, forget it — expect more of the same. While Lightfoot’s tough talk has reflected deeper concern than Mayor Emanuel showed, those contract negotiations indicate no profound change in direction is at hand.

To many of us, some things seem obvious. When you’re so broke that your survival is threatened you don’t raise pay. You don’t keep facilities open that aren’t even half full. You don’t provide lavish retirement benefits. You expect employees to contribute to their own retirement. You do what countless private sector companies did to survive the Great Recession – you tell your employees that a period of austerity, that may or may not be fair, is unavoidable. That’s how you live to fight another day.

We think that way because we live in an alternate universe. In government across most of Illinois, especially Chicago, habits never die, no matter what the consequences. In their universe, fiscal reality means nothing.

Lightfoot and Chicago Public Schools already offered a five-year contract including a 16% salary increase. Teachers and staff would see a total of $351 million in salary increases, according to WTTW. Between that increase and regular salary increases based on years of service, the average teacher would see their salary increase 24% over the life of the five-year deal.

The CTU rejected that and have threatened to strike. They live in yet another universe. They want a 14% increase but over a three-year deal. Other demands previously reported include more generous benefits, numerous staffing requirements, 55 additional “community schools,” a reduction in class size, creation of affordable housing for teachers and more.

Where would the money come from? “Rich people,” CTU Vice President Stacy Davis Gates said.

The final contract will probably end up somewhere between what each side has proposed, which is to say things are going the way they traditionally have. Lightfoot has shown no indication she wants to end the pattern. Lightfooot’s Thursday speech, if it goes like the CTU negotiations, would then be historic only because it sets the tone for more of the same, which would be catastrophic for Chicago.

Lightfoot should be threatening to reconstitute CPS entirely. She should be giving a shock-and-awe budget speech like we suggested for Mayor Emanuel four years ago. Almost all the specific reforms we listed then apply today. She should be educating Chicagoans about why radical reforms are needed. Respecting CPS, she should have softened the ground by telling Chicago facts like we’ve reported over the last few months, and included in the appendix below.

Those facts cry out that CPS needs structural reforms, some of which should be reflected in the new CTU contract, but they are being ignored.

If Lightfoot likewise ignores the rest of the city’s deep, structural problems, her Thursday budget address will be a sad affair indeed.

*Mark Glennon is founder of Wirepoints.

Read more about CPS, the CTU and the City of Chicago’s fiscal situations:

APPENDIX — CPS TODAY

•  Chicago teachers are already highest paid compared to teachers in similar districts according to data from the National Center on Teacher Quality.

For example, a Chicago teacher with a master’s degree receives $80,000 a year after ten years of work. In contrast, an equivalent teacher in New York City makes $70,000 and a Los Angeles teacher makes $60,000.

A big reason for that is due to how fast Chicago teacher salaries grow. The average new teacher with one to four years under her belt starts out with a salary just above $50,000. By the time that teacher reaches 10 to 14 years of service, her salary grows to more than $85,000 annually.

•  The average career Chicago teacher will get $2 million in total pension benefits, far more than ordinary Illinoisans.

High salaries translate into big pension benefits for career teachers. The average CPS teacher who retired in 2018 with 30-34 years of service had a final average salary of nearly $98,000 and a starting pension of over $70,000. Their average retirement age was 61.

That pension will increase automatically by 3 percent each year and by year 25 of retirement, the pension will be double its starting amount. In all, the average retired career Chicago teacher will collect over $2.1 million in benefits over the course of her retirement.

In contrast, an ordinary Illinoisan at retirement would need to have around $1.5 million in his or her account at retirement to collect the same amount of benefits as a career Chicago teacher. Most Illinoisans will never save that amount of money.

•  Taxpayers still “pick up” a majority of Chicago teacher pension contributions. Chicago teachers are supposed to contribute 9 percent of their salary every year towards their pensions. But every year since 1981, CPS has paid for, or “picked up” 7 of that 9 percent.

That means Chicago teachers only have to pay 2 percent of their salary towards their own. That costs Chicagoans over $100 million a year. Mayor Emanuel tried to reform pickups in 2016, but he was rebuffed by the union. Only new workers lost the pickup. And even then, the district gave out extra 3.5 percent raises in exchange.

•  CPS is losing students but spending more on them than ever before. One of the CTU’s contract demands calls on CPS to spend money to hire more teachers and even more support staff. That might make sense in a dynamic, rapidly growing city with a growing school population.

But CPS is losing students and has been for nearly 20 years. At the same time, the district’s spending per student has jumped.

In all, CPS’ per student spending has doubled since 2000 according to ISBE, even as the district’s enrollment has fallen by nearly 75,000 students, or 17 percent, over the same time period.

•  Near empty, failing schools should be closed and their resources redirected.

Declining enrollment is hitting some Chicago schools particularly hard. In 2017, the Chicago Tribune examined the demographics of some of the most underpopulated schools in Chicago. It found the enrollment of the 17 worst schools has dropped from nearly 20,000 in 2008 to just over 4,600 today. Their buildings are, on average, filled to just 20 percent capacity.

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I thought pensions represented deferred market rate pay and/or a contributions financed retirement savings plan. I support good pay for good teachers, and they seem to be getting it, but teachers’ pay is always based upon their ability to shut down schools but has no relationship to actual classroom performance, and it is almost impossible to fire a poorly performing teacher. The CTU should have to decide whether they want to save for big pensions after a long successful career or to receive COMPETITIVE pay for for current labor. “The average CPS teacher who retired in 2018 with 30-34 years… Read more »

s and p 500

This video about crumbling Chicago Schools looks pretty bad. I would think that having sewage flow into classrooms would be unacceptable, especially if CTU teachers are the people who have to go to work in those SAW movie classrooms. I’ll bet it’s not this bad in Greece or Spain.

https://www.cnn.com/videos/us/2019/06/20/school-infrastructure-crumbling-field-dnt-vpx.cnn

Mike

The video is about two small suburban Cook County school districts, each with one school only, and each which had a recent failed bond referendum to refurbish and expand facilities. The Komarek District 94 (North Riverside) $22M (not including interest) referendum failed on April 2, 2019. The Pennoyer District 79 (Norridge, Harwood Heights, Norwood Park) $25M (not including interest) referendum failed on March 20, 2018. There is a lot of deferred maintenance in public schools throughout Illinois. Neither pension funding status nor deferred maintenance are mandatory financial obligations to be considered during collective bargaining. The union and district can claim… Read more »

Mike

Another point is the annual employer / state contribution to the pension fund. State politicians mandate less than actuarial required annual employer / state contributions to the CTPF pension fund allowing local and state politicians to claim a “full pension contribution” was made which helps enable the inevitable “balanced” budget claim. These are frequently repeated mantras when justifying public sector pay hikes in Illinois. The Chicago Teachers Pension Fund (CTPF) unfunded liability increased from $10,888,978,612 (50.1% funded) on the June 30, 2017 actuarial valuation date to $11,953,907,035 (47.85% funded) on the June 30, 2018 actuarial valuation date, per the Public… Read more »

Bob

She will probably attempt to screw CPD and so she can cave to the CTU. She knows the cops can’t strike. It’s all the police fault to Lightfoot. Thats what she has been hammering on.

NB-Chicago

Also,,upcoming, all the other cps seiu staff is threatening a strike..who knows what theyll get. Also does the $351 mill (assume thats total for 3 years?)only cover ctu raises and not all added accompanying pension/bennie cost?, cost for all the new nurses and social worker (assume ctu will insist they become ctu members)? …..then up next the coppers are going to be looking for there new deal (in a city that already has more cops per capita than any other big city)..and on and on…if middle income shumks like me are priced out who cares.

Tom Paine's Ghost

If Lori Lightfoot has a half a brain she would reconstitute CPS and start all over. She could negotiate teacher contracts with a different teacher organization or simply ignore the unions altogether. Such an action might force AFSCME and SEIU to acknowledge the financial abyss and aid Lightfoot with Chicago’s other financial crisis issues. Whats the saying? Kill one monkey to warn a hundred.

Wirepoints has covered this in the past.
Link here:
https://wirepoints.org/isnt-wholesale-reconstitwholesale-reconstitution-of-cps-the-only-real-optionution-of-cps-the-only-real-alternative-wp-original/

And Link here:https://wirepoints.org/hard-to-duplicate-illinois-1980-cps-rescue-better-government-association/

Mike

CTU Boss Talks Like Working Man, Lives Like Wealthiest 1 Percent.
Chicago Teachers Union boss Jesse Sharkey talks like a socialist tough guy, lives in a posh Rogers Park estate and drives a Tesla.
By Mark Konkol, Patch Staff.
Aug 27, 2019.
https://patch.com/illinois/chicago/ctu-boss-talks-working-man-lives-wealthiest-1-percent

Ken

Let the schools shut down and keep them shutdown and clean house. Too many administrators getting paid too much for the level of responsibility. We need less administrators and less teachers. Student teacher ratio in Illinois is low compared to many other states.

JWB

Yep. And if she caves to the unions with her only solution being to raise taxes not cut costs, she’s automatically done, failed, a one-termer, a loser and a same-old democrat politician. We’ll know tomorrow.

Willowglen

JWB – agree, but must point out the failure will be epic. She starts a billion dollars in the hole, and that’s before agreeing to the giveaway to the CTU. The actual increased cost of the CTU contract will be much more than stated. With no state bailout forthcoming, very limited ability to borrow, other taxes such as the transfer tax for properties over $1M (only $14M to the fisc), Lightfoot will have to raise property taxes really substantially. This will only raise revenue of any material nature in a smattering of wards, and even a modest outflow from those… Read more »

debtsor

” I think Lightfoot is more honest than your average Illinois politician, but her lefty politics are really expensive, especially in patronage filled Chicago. I can’t think of s worst time for a lefty of Lightfoot’s ilk to be elected.”

She’s been treating her job more like a receivership, as if the finances of the City is being taken over by an outside entity … ie her…than she is acting like a mayor.

Brian

I keep telling people only 2 things can and will happen to fund everything. Income taxes go up and property taxes go up. For everyone by the way. ALL OTHER REVENUE is peanuts. The ONLY way to generate billions is income and property taxes. Anyone who says anything other is lying.

debtsor

A city income tax would be brutal for people, especially after the progressives get their hands on it. I imagine that’s what she is proposing tonight and that’s why it’s been so hush-hush with what’s in her speech. There’s been no leaks to the press or early versions out there, no one except she and her staff know what she plans to say.

Illinois Entrepreneur

It’s like a broken record. CTU threatens everything in their arsenal, and the mayor weakly says, “I think we can reach a deal.” I have never seen the mayor actually bring out the weapons necessary to negotiate a proper, balanced agreement. CTU knows their power and they use it. Our “public servant” stands there like a sitting duck and meekly tries to figure out how he/she is going to tell the taxpayers that more money will need to be coughed up. Nothing about replacements — no contingency planning, no reconstituting threats, no closure threats — nothing. Our “executives” seem to… Read more »

Willowglen

I think the fascinating question is what will happen to the schools if the teachers do strike at the end of September. I would think that the most significant casualty would be a decline in enrollment. The decline is likely to happen in any event, but a strike would significantly accelerate the process. Query what the union thinks about total employment if the district falls below 300.000 in enrollment, which I could see happening in relatively short order (such a decline impacts funding from the state, so it is a serious, existential matter).

joe blow

hah! shut up and take it like a good servant

DantheMan

You would think the primary issue for the unions would be for the city to properly fund the pensions. Why aren’t they threatening to strike over that issue?

nixit

Because properly funding the pensions would mean less money for salaries.

Freddy

True More money for salaries=larger pension=soaking the taxpayer more. Soon they will demand on the same day that they fill out the application they can retire.