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By: Ted Dabrowski and John Klingner

Chicago teachers are striking for the third time in seven years. The Chicago Teachers Union has rejected what Mayor Lori Lightfoot says is “the most lucrative CTU package in its history.” The union shunned 5-year, 24 percent teacher raises and continues to demand more, including thousands in new hires and additional benefits like affordable housing.

Over 25,000 teachers and 7,000 support staff will be on strike while 300,000 students will be left in the lurch. 

It’s become standard operating procedure for the CTU to strike when it doesn’t like the school district’s contract proposals. In 2012, the union struck for one week over a contract dispute with then-Mayor Rahm Emanuel. It did the same again in 2016, when the union held a one-day walkout. 

In both cases, the union’s demands drove Chicago deeper into its financial hole. Now this strike poses a new danger to the fiscal viability of the city and the school district. The simple fact is that Chicagoans can’t afford either the CTU’s demands or Lightfoot’s offer.

Regardless of how the strike ends, the massive costs inflicted on CPS will force Chicagoans’ tax bills to keep rising, the city’s population to keep shrinking and property values will continue to suffer. Neither side’s deal will help teachers or residents if the city and the school district move faster toward insolvency.

Here are 13 reasons why the strike spells trouble for Chicago:

Chicagoans can’t afford either the CTU’s demands or Lightfoot’s offer.

1. Chicago teachers are already among the highest paid in Illinois. Chicago already offers new teachers a starting salary of $56,665, the 6th-highest out of Illinois 870 school districts. That salary rises rapidly as teachers work more and achieve higher degrees. A career Chicago teacher with a masters degree is paid a maximum of $100,000 a year by CPS, still one of the highest in the state.

That level of compensation is far out of reach for most Chicagoans, but even younger teachers get paid far more than what the average Windy City resident can afford.

The average teacher salary in CPS equaled $78,211 in 2019. That’s 55 percent more than what the average full-time private sector worker makes ($50,356).

If the union agrees to Lightfoot’s contract proposal, that average salary will rise to nearly $100,000 by 2024.

2. 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.

3. The district’s offer is unaffordable. Under the district’s proposal, the average teacher will get a salary hike of 16 percent over the five-year contract (24 percent if step and lane raises are included). The average teacher salary will be nearly $100,000 within just five years. Nurses’ average salaries will jump to $73,000 from $49,000 during those same five years, an increase of nearly 50 percent.

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4. The CTU’s demands are even more impossible. The CTU’s demands include a 15 percent raise over a three-year contract and numerous additional benefits, including affordable housing benefits and thousands more in support staff, all of which Lightfoot says will “cost $2.5 billion that the city can’t afford.”

The union is demanding all those benefits at a time when both the school district and the city are mired in a deep financial crisis. Here’s how bad things are:

5. Chicago and CPS have some of the nation’s worst credit ratings. Both the city and the school district are already junk-rated by Moodys, Ba1 and B2 respectively. Only the city of Detroit has a lower rating than Chicago.

6. Both the city and school district are drowning in red ink. Chicago’s debts continue to grow steadily worse every year. The city alone is now stuck with a net position of negative $30 billion. And CPS has a negative $14 billion net position of its own.

7. The school district has been shrinking for years. District enrollment has dropped by 75,000 students, or 15 percent, since 2000.

8. Residents are already hurting from the $860 million in new annual taxes imposed by Mayor Rahm Emanuel. The list of new taxes and fees over the past few years include:

  • A $543 million property-tax hike in 2015, the single largest in the city’s history.
  • A separate $250 million property-tax hike by CPS to pay for pensions in 2016.
  • Numerous fee hikes on garbage collection, utilities, permits and more.
  • New taxes on ride sharing, online entertainment, e-cigarettes and more

9. Chicago is losing people. The city’s population has shrunk four years in a row, the only major metropolitan area in the country to do so.

10. Chicago homes have lost value. Real city home prices have fallen since 2000, making Chicago an outlier nationally. Home prices in the Chicago have grown just 44 percent since 2000. By comparison, inflation was up 46 percent over the same time period.

11. Chicagoans are drowning in retirement debt. Chicagoans are on the hook for a collective $150 billion in overlapping government retirement debts, based on Moody’s pension calculations. That’s nearly than $145,000 per Chicago household.

12. Chicago is an extreme outlier fiscally. Cities across the nation are dealing with deep pension problems, but Chicago is in a class of its own. The Windy City has the nation’s worst pension crisis under almost every measure.

J.P. Morgan compiled funding ratios for the country’s major cities and found Chicago pensions, at just 23 percent, were the nation’s worst-funded. They’re effectively insolvent. The Chicago Public Schools’ pension fund is just 50 percent funded.

The state’s pro-union collective bargaining laws are a big reason by Chicago has such a belligerent teachers union. Here’s what makes Illinois, and by extension the CTU, different:

13. Illinois is the only state among its neighbors that enshrines teacher strikes. In contrast, strikes are illegal in Wisconsin, Indiana, Missouri, Kentucky and Iowa. In fact, Illinois is one of just 12 states nationally where teacher strikes are legal.

Read more about Chicago’s financial, demographic and economic crises:

 

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Missy

The comments here are so typically “Illinois” and especially Chicago. The state is burning down and you’re diddling about name calling and incivility.

The height of incivility is slavery and an entitled population that believes they have the right to live off the labor and backs of others. And that is the CTU and all other unions in a nutshell.

If your labor is so valuable go get another job. You will one day wake up, when it’s too late, and have no pension. No one will cry for you.

Peter Harris

Then what’s your job “Missy”?

Peter, please confine your comments to substance and policy or go somewhere else.

Hank Scorpio

Don’t forget the healthcare angle — health insurance premiums continue to explode.

Peter Harris

To the two feckless fools who wrote this nonsense, here is the truth…

“It is a grotesque lie to claim there is no money for public education and improved teacher salaries when tens of millions of dollars in tax cuts are showered on major corporations headquartered in downtown Chicago and 18 Illinois billionaires—many from the Pritzker family—made the Forbes list of the richest people in the world.”

https://www.wsws.org/en/articles/2019/10/17/chic-o17.html

debtsor

Why aren’t you demanding that Fat Slob release his Trusts’ tax returns? Because you’re a hypocrite.

What about the approximately 1B in extra funds that have flowed into CPS in since 2016? Where did that money go? PENSIONS. Why aren’t you demanding that the teachers give up some of their lavish million dollar pensions? Because you’re a hypocrite.

James Gordon

“Why aren’t you demanding that Fat Slob release his Trusts’ tax returns?” Can’t you find a more intelligent and polite way to describe someone with a political style or agenda that you don’t like? You don’t do that all the time, but you’ve done it repeatedly here. A few others do it as well but most don’t. Your adolescnt put-downs say more negatively about you than they do about the people who are subjected to them. Grow up and show people you had a decent upbringing! Are you trying to mimic da Trumpster? Some will find it acceptable, but I… Read more »

debtsor

Calling him a fat slob, which he totally is, says nothing about me, but says everything about his greed and avarice. Your teachers’ affordable housing is unattainable because his offshore billion dollar trusts aren’t paying any state tax. Your teachers’ raises are unlikely because he owns a million dollar cigarette boat, built in Michigan and docked in Indiana, and paying no IL tax…(“Gov. Pritzker’s speedboats among most expensive on Geneva Lake (Chicago Tribune headline, July 2, 2019) Your property taxes are too high because our greedy fat slob gov. removed the toilets from his mansion. Your gas taxes just doubled… Read more »

James Gordon

I’m not arguing with you here regarding your political comments; I’m simply asking you to ponder how you say what you say. I give you wide latitude as to what’s acceptable from my point of view, but for goodness sakes, state your case without coming across as an out-of-control adolescent. I’m not accusing you of being dumb or even wrong; I’m accusing you of incivility.

debtsor

I will concede that calling JB a fat slob is uncouth, incivil and contributes to the partisan atmosphere in politics today. But as Rhett Butler said in Gone with the Wind…”Frankly, my dear, I don’t give a damn.” If it makes you feel any better, I’d call him that to his face if I ever run into him at the State of IL building. And if there is a god, I’ll have the opportunity, and if the gods are on my side, I’ll be able to record it on my phone for an amazing ‘gram viral moment. As an aside,… Read more »

James Gordon

When I read things here I often think of you and others that “he’s preaching to the choir,” essentially doing venting. Most who do that here are almost sure to get the approval of those who agree with him where the mindset is already very similar. Wirepoints appeals to certain kinds of political observers, and many will agree with you no matter what you say. You’ll increase that number by stating things positively rather than derisively and with venom. More importantly, how about going on to other websites of a different stripe where you are trying to educate people of… Read more »

debtsor

James, I’m not trying to make a difference or convince anyone of anything. I’m just random dude posting comments on a low traffic IL politics website. You see, I’ve already given up on Illinois because it is a lost cause. I’m intelligent enough to realize that IL is becoming a ‘progressive utopia’. There is no place for the likes of me here or quite frankly anyone in the middle class. I’m going to stay while I can make some money off it’s decline, until such time that I can’t anymore. Then I’m going to leave. I’m just having a good… Read more »

James Gordon

I’m just hoping you’ll decide at some point to try to make a difference and not simply add to the noise level here without a higher purpose in mind and perhaps elsewhere so that others not in this group might see a different point of view–yours.

debtsor

James, there’s no difference to be made. Trying to make a difference by espousing conservative views in this state makes you an enemy, a target to be hated and despised, and parents won’t let you kids play with their kids. It’s toxic out there, i’m just a reactionary product of the hate of the left. I mean, the state comptroller called wirepoints a ‘fringe’ website. They keep an enemy list. There’s really no point to trying to make a difference. The only difference I can make is to move my family to a friendly family red state.

Missy

You are insufferable

Guys, among the things I’ve learned from writing here is that name calling simply isn’t effective. I am inclined to do it too, and I used to do it often, but I now avoid it as best as I can because it just doesn’t work well.

debtsor

I disagree, name calling is extremely effective. Crude but entirely effective. Do you know who Pocahontas is? Or low energy Jeb? Or crooked Hillary? I’m not saying we should imitate Trump, but there is a “very well nourished” individual in Springfield who exemplifies all that is wrong with Illinois and Chicago, as he sticks his hand in your pocket, celebrates killing babies, and drives the middle class out of the state. Commenting on his greed and avarice through a descriptive moniker is actually kind of gentle. It would be good for Illinois politics if every person in the state who… Read more »

Peter Harris

I just love it when Violent troglodytes like you post comments on alt-right websites like this, because you’re only further destroying the cult of far-right hate.

Peter Harris

But this is typical behaviour from the far-right troglodytes.
Things I’ve been accused of raising includes white supremacy, Adolf Hitler, being a Ukrainian troll, and I’m apparently a wife beater too.

And all I have discussed, is my support for the union, and the teachers strike action.

debtsor

Peter, I’m a troll too. been doing it since the internet came of age two decades ago. Started trolling on IRC, if you can remember those days.

And from one troll to another, you’re not very good at it. But please, don’t troll here, go get some practice elsewhere first, maybe the comment section on Vox or Mother Jones.

Peter Harris

And again, you are just confirming my previous comments.

debtsor

You mean your comments had a point? other than to shout ‘alt-right’ at the top of your lungs? Because that’s pretty much what every got out of your posts. If your posts had a point, everyone here missed it. go back to Vox, please, and practice trolling.

Don’t take the bait from trolls. Ignore them. We want substance here.

Missy

Deflection. Trying debating the issue. Another low IQ Democrat

riverbender

How about getting Madigan to do the same thing as well? After all it seems like the ado over releasing tax returns come from the Democrats and whats sauce for the gander is good fir the goose…

nixit

I’ll double-check my property tax bill, but I’m fairly certain there is plenty money for public education. Did you know that Leon Trostsky contested his property tax bill?

“Tens of millions” is chump change compared to the city’s fiscal crisis. And you’d presumably get at that money through the state corporate income tax or a city one. Good luck with that. Already, inbound corporate moves have dried up entirely and outbound moves abound. BTW, did you know that corporations don’t actually pay any taxes? They collect them (and not very progressively). That simple and undeniable fact is among the realities the left will never acknowledge because it doesn’t have the intellectual integrity to look at results instead of cosmetics.

Freddy

Mark . Just asking. Do you know how much money is being diverted from TIF districts to political pet projects and away from schools,etc like Willis Tower’s TIF cost basis is around $400 Mil but sold for $1.1B. That’s 700 mil taxable money going somewhere else. Can’t seem to find $$ amounts. Also what is the total $$ cost for corporate welfare sure as abatement’s/tax breaks/etc? There is a lot of money circulating in Chicago but most ends up for a select few with political ties. If there were no TIFs how much more funds would have gone to schools/fire/police/pensions… Read more »

I don’t know that number offhand and it varies each year. I’m certain, however, that having looked at those numbers in the past it’s not the panacea that many on the left claim. Remember that the additional taxes paid by property owners in the TIF are supposed to go to benefit that area, so the whole concept of skimming it is very unfair. Second, it’s not a recurrent revenue source. The excesses are one-off, year-by-year. I’ve also seen the folks in the muni bond community scoff at the notion that TIFs can provide any level of reliable, recurring revenue for… Read more »

Freddy

Thanks Mark. I had read somewhere that a lot of the TIF money a few years back went to that horribly blighted Navy Pier area instead of the south and west sides where it is desperately needed. If a moratorium of TIF’s of say 2 years were diverted to all the shortfalls mentioned it should make a dent if not they could be extended 2 yrs. Without reforms and concessions the only option is raise tax’s. Problem is those who have more want more and those who have less also want more. Unless the more concede-the less have little chance… Read more »

Missy

And if all those people industries were taxes 100% it wouldn’t make a 1% difference in any metric. And those businesses employ people, so that would translate into less jobs and lower wages. If you’re worth so much get another job.

debtsor

Missy, why would they get another job when then are 20 years vested into a pension? That monthly pension check is a nice house on a lake in Tennessee and a pontoon boat and maybe a jet ski for the grand kids to play with when they come visit ( as their own children left IL long ago themselves for college, and never returned). I wouldn’t quit a state of IL job if I had one. NO way.

mike Williams

Great summary. Love the charts/graphs. Lightfoot should display them at every CTU negotiation and play hardball. Then all she has to do is allow the negotiations to be televised and say in front of the cameras, “I’m not going to let you greedy teachers push around the Chicago taxpayers any longer. You have bled them dry. It stops now.”

Peter Harris

Ha ha ha… Great summary?!

All these points are completely irrelevant to the discussion, which is typical noise from the far-right fools, when their arguments fail.

mike Williams

Yawn

Cass Andra

These days, you have to disrupt peoples’ lives to get their attention on issues. Consider climate change and the low position of that issue on the list of presidential debate questions or in polls about voters’ top concerns. Same with gun control: if the extraordinary number of mass shootings cannot move the needle, it demonstrates (at least to me) that it will take many more atrocities to give that issue real traction in Congress. I think it will take a lot more than a one-week strike to address the bankruptcy issues now rather than somewhere down the road when they’ll… Read more »

David

CPS – Time for bankruptcy.
Pensions reduced to funding, no more pensions (401), close as many as possible schools with less then 200 students, start issuing vouchers.

danni smith

is housing unaffordable in chiraq? are re taxes too something in chiraq? Am I now suppose to pay for teacher’s housing? should his/her salary be reduced? should I feed him/her too? I do all the illegals and fatherless sibs. I say live in cabrini green.

debtsor

You’d literally have to be insane to voluntarily allow your children to attend CPS public schools. It borders on child abuse for parents to send their kids to CPS. I question the judgment of anyone who sends their kids to CPS.

willowglen

Those who do send their children to CPS will think twice about doing so after this strike. What a way to reduce enrollment to under 300k, and those leaving the system will likely be the population the schools least want to leave.

debtsor

It will be great for the inner-ring suburbs of Chicago. Crains had an article a year or two ago that said the hottest suburbs were all right outside of chicago – evanston, park ridge, morton grove, oak lawn, berwyn, schiller park, a few others. Basically former city dwellers moving just outside the city limits.

Richard Kay

I hear you man but some of us can’t afford private school! I’m employed full time, have a wife employed full time, own a rental property and drive a 20 year old truck but life in this city is already expensive enough to add private school prices on top!

debtsor

Hopefully you see the connection between your choice to live in Chicago and your economic hardship. I hope your lifestyle in Chicago is worth it. I moved out of Chicago a decade ago when I had the choice between paying real estate taxes, or real estate taxes and private schools. I save ten thousand dollars a year.

riverbender

This is a multi-faceted problem that will effect taxpayers across the State. Chicago no doubt eventually cave into the teachers demands. This will lead to wages that the District can not afford so the State will, as usual, step in and throw more funding to the District. Being there is only so much funding to go around other Districts, as in downstate, will suffer. To make matters even worse the wage hikes will in effect spike all soon to be retiring teachers making this equivalent to a gift that lasts for the teachers at the demise of the taxpayers. One… Read more »

MikeH

And away we go. Great reporting as always, guys. No matter who wins here, the taxpayers of Illinois lose.