By: Ted Dabrowski and John Klingner
While Illinoisans are distracted by mask mandates, critical race theory, the delta variant and more, Illinois politicians continue to do what they do best – run up the bill on taxpayers.
The new, tentative teacher contract at Naperville CUSD 203, the 8th-largest school district in the state, is a good example of how property taxes and pension burdens are being hiked on unwitting Illinoisans. Expect salaries of nearly $100,000 for the average teacher, more sick leave days, and continued heavily-subsidized health insurance as part of the district’s new agreement.*
Teacher contract negotiations like these play out all over the state as some of Illinois’ 850 school district contracts expire each year. And every year, teacher unions use their one-sided collective bargaining powers – some of the strongest in the country – to extract more and bigger benefits. They even use strikes, or the threat of them, to get what they want, as Naperville’s union just did.
Illinoisans already pay the nation’s second highest property taxes. And they’re burdened with the biggest pension debts of any state in the country. But as Naperville shows, politicians don’t care if those costs keep rising.
Below, we break out some of the details in the expected Naperville contract based off of what the district has released to the public. Every Illinoisan should look out for similar items in their own local government contracts:
Government-union agreements feature all kinds of perks that most ordinary residents never get. Start with multi-year contracts that lock in benefit increases for three, five or even ten years. There’s guaranteed raises based on longevity, not merit. Unused sick leave benefits that can be traded in for bigger pensions at the end of a teacher’s career. Health insurance subsidies for retirees, and much more. What private sector worker gets any of those benefits, let alone all of them?
Non-transparent negotiations
Illinois taxpayers don’t get a seat at the table or even get to know what’s being negotiated unless pols or the unions tell them. Final contract details are kept from the public until after agreements are ratified. Here’s what the Naperville 203 said in its press release announcing their tentative contract:
“We are pleased to announce that at today’s mediation, the Naperville Community Unit School District 203 Board of Education and the Naperville Unit Education Association (NUEA) have reached a tentative agreement on a multi-year contract. Additional information regarding the agreement will be shared pending ratification by the NUEA membership and approval by the Board of Education.”
In other words, Naperville residents won’t even learn what’s in the teachers contract until after it’s been signed.
Multi-year contracts
Public sector workers receive multi-year employment contracts that promise salary increases and benefits no matter what happens to taxpayer incomes, the economy or government finances in the meantime.
The new Naperville contract is likely to run for four years. That’s four years of raises and benefits no matter what happens. Some contracts, like those for Palatine CCSD 15, are running for an entire decade.
Guaranteed raises
One of the most lucrative parts of multi-year contracts are the guaranteed raises public sector workers get. Naperville 203 offered their teachers’ union average annual raises of 3 to 4 percent each year through 2024, according to the district’s latest public offer. Those raises include both the average annual base increase and the average step increase for district teachers.
If that’s what was agreed on in the tentative deal, then the average teacher salary will grow from $86,000 in 2021 to almost $96,000 by 2024.
That’s higher than the salaries teachers in Illinois’ peer states earn when they retire.
Wirepoints recently ran a comprehensive analysis of teacher pension benefits as part of our Pension Solutions report. We found that Indiana’s career teachers retire with an average salary of $80,000 on average, after adjusting for cost-of-living. Wisconsin’s retire with $78,000. Iowa teachers retire with $76,000. A complete look at teacher benefits in Illinois vs. peer states can be found here.
Most Naperville teachers will have time to see their salaries climb even higher considering their average age across the district is just 44.
Sick leave
Illinois teachers benefit from a special pension perk: they can cash in up to two years of unused sick leave, accumulated over their entire career, in exchange for service credit. That essentially allows them to retire up to two years early. Almost 90 percent of retired teachers in Illinois have some amount of unused sick leave credit.
Nobody in the private sector gets a deal like that. Companies typically offer sick leave that’s use it or lose it.
At Naperville CUSD 203, teachers could already accumulate up to 360 unused sick days – two years worth of service credits – as part of their benefits. The union wanted to expand that to 370 days, while the district was offering 365. In either case, the new contract will make it even easier for Naperville teachers to accumulate unused sick days to boost their pension benefits.
Subsidized health insurance
Subsidized health insurance is another perk enjoyed by Illinois’ public sector that ordinary Illinoisans don’t often receive.
According to data from the Illinois State Board of Education’s 2021 Teacher Salary Study, about two thirds of Illinois districts subsidize some or all of their teachers’ health insurance costs.**
Naperville 203 subsidizes 85 percent of their teachers health insurance plan – which the district offered to keep in the new contract. That means the district pays for over $6,800 of a teacher’s annual $8,000 in health insurance costs.
In 2015, the district covered just 70 percent of insurance costs.
———
All the increases above will contribute to higher property taxes. About 70 percent of residents’ property tax bills go to Naperville CUSD 203.
Naperville residents already pay an effective property tax rate of 1.8 to 1.9 percent – far higher than the average 1 percent a homeowner in Missouri pays and the 0.8 percent a homeowner in Indiana or Kentucky pays.
Driving up pension costs
Naperville 203’s 3 to 4 percent annual raises will drive up the final salaries – and therefore the starting pension benefits – of all its educators.
The recently retired career educator in Naperville began, on average, collecting benefits at the age of 58 with a starting pension of $93,000 a year, according to TRS member data received via a 2021 FOIA request. Each of those career retirees can expect to collect, on average, over $3.2 million in benefits during retirement.
The district’s top pensioners can expect to collect far more than that. The top 10 retirees – almost all of whom retired before age 60 – are all on track to get more than $4.2 million in benefits. Naperville’s top pensioner, former superintendent Donald Weber, will receive $6.3 million.
In all, 316 of Naperville’s current school district retirees will receive more than $3 million in total pension benefits.
Too much power
Naperville CUSD 203’s tentative contract with its teachers’ union represents what’s wrong with Illinois. It’s a done deal with virtually no taxpayer input that will hit Naperville residents with higher property taxes and will hit all Illinoisans with higher future pension costs.
Perhaps most importantly, it’s yet another demonstration on how teachers unions still hold all the power in negotiations.
Now Illinois lawmakers want to further entrench union power through a constitutional amendment. The new clause would enshrine union collective bargaining powers and even allow contract provisions to override state law.
If Illinoisans can be convinced to vote for that amendment in 2022, then state and local officials won’t need distractions to run up the bill on taxpayers – they’ll have all the power they’ll ever need.
*Details of the tentative contract are based on the district’s last public offer on 7/29. The final terms are likely to be even more generous, considering an agreement was reached just as the teachers union was gearing up for a strike.
**ISBE data shows more than 600 districts subsidize all or a portion of teachers’ annual hospitalization insurance or “cafeteria” health plans.
Read more about the power of public sector unions:
Audio and summary 
If this bill passes, say goodbye to local control over all Illinois parks and expect to see open drug and alcohol use, needles, no sanitation and fire hazards, but no ordinary park users.
If Naperville homeowners think their property tax rates are high now, they should look at Case Study Woodstock CUSD 200. Property tax rates in this District have ranged between 3.5%-4.6% for a duration spanning a child’s education. Naturally, there has been virtually zero contributory development—homes built which would actually contribute toward the cost of education of children produced. Instead, TIF free-riders have been the sole source of enrollment increase… and still enrollment has dropped… because who can afford to live in a 4% property tax rate environment with zero contributory growth and social-service-provision-taxation rising far and above inflation annually? Then,… Read more »
I can’t believe the discussion here is proceeding as if the idea of accumulating 340- yes, 340- sick days is somehow an unremarkable thing. In what private business would this ever be allowed?
I can’t even accrue 34 vacation days.
We we’re allowed to accumulate 50 sick days throughout are career and then you could cash them in at 75% of your current pay rate, that’s why everyone used them up.
And how about that Kiser couple in the table of highest paid Naperville pensioners? In a little more than a year, their pension checks will cover their entire career contributions to the system. Does your 401k do that? And for their $358,000 investment, they are projected to receive nearly $9 MILLION. Does your 401k DO THAT?
Speaking of Kiser, he apparently tried to sue the school district. Kiser v. Naperville Community Unit, with this lovely nugget: “Should Kiser give two-years notice of his intent to retire at the end of his contract to take a TRS annuity, he would receive salary increases of twenty percent of the prior year’s salary in each of the last two years of employment, partial payment at retirement for unused sick days, and access to the District’s group life insurance for ten years after retirement.” He then married a school board member. Juicy stuff: “The bulk of Count 3 is premised… Read more »
none of this bullshit is sustainable,im gonna be laughing my rear end off when this all crashes!-and it will eventually
Naperville was a bastion of conservatism, but no more it seems. Historically, public employees generally received richer benefits and better job security in exchange for salaries below the private sector and de minimis raises. No more.
FDR believed there would not be effective representation on the behalf of taxpayers in negotiations between government bureaucrats/politicians and public sector unions. How right he was. We, the taxpayers, are the true employer, but the current system locks us out. We need to rise up if we want to save this state from its day of reckoning.
Na, its way too hot out there. Its so much more appealing to stay inside with air conditioning and complain from afar. Who wants to carry placards in hot weather like today’s.
You don’t know me, yet you default to comments like these. Please add value.
Lots of ways to make a difference. Wirepoints is doing it. Challenging our elected officials is another, i.e., demand a town hall to let our voices be heard. If an Arab Spring can be organized by social media, we can too.
James is public sector, so he’s part of the problem.
Does the Naperville contract include the pension spike where salary is inflated when retirement is announced (2 or 3 years prior to actual retirement) so that the final average salary is inflated even more? It’s interesting that ERISA wouldn’t allow pension service credit to accumulate for such underfunded plans. But ERISA is for the peasants in the private sector, I forgot.
The previous contract did. Most school district contract do as well.
I think that 6% increases for 4 years prior to retirement is allowed but many schools districts like Rockford have exceeded the 6% many times for many people. That is why Rockford dist 205 paid approx $3M in penalties since the 6% law went in effect. Where do they get the money for the fines? One local reporter asked the super about that and he was new at the time and he said he will look into it. Not a peep since then.
Here is an old article from the TRS website about Wirepoints and under funding:
https://www.trsil.org/news-and-events/pension-issues/state-budget
The dysfunction of Illinois is reaching an all-time record I believe. Red States do not have to work very hard to beat out Illinois on nearly everything of importance to families. As for Naperville, it crashed before, and it appears it’s setting itself up for a bigger crash next time. None of the trends point to long term health. The expediant is the order of the day.
You are right and it sucks. I love my home, friends here, neighborhood, geography and proximity, but the clowns in charge are poisoning everything.
You need to run for office so things go perfectly to your satisfaction. I’m sure you’l get no blow-back at all based upon the changes you’d like to make.
And to what changes are you referring? Wilmette didn’t itemize, so you just go personal. Really? Provide constructive commentary please, not personal attacks.
You were the one making complaints about those who apparently make life in Wilmette not to your liking, so it seemed you’d like to have the reins to change things a bit. But, maybe you just like the non-commital, less bothersome role of complainer. There are lots of people here who prefer that role as well. This is your home unless you really want to be a game-changer rather than complain from the bleachers.
Full disclosure: I’m not Wilmette in this string of comments. And resist the personal attacks, please. Instead, add value to the discussion. If you are disappointed that people are leaving Illinois or that taxes are too high, or that too many people are complaining, what should be done to reverse those trends?
The problem with this state are the people. We are 42% of the population and the other 58% have become communist, or communist sympathizers. They lie to themselves and say they like the way things are. And when it becomes too unbearable, they leave and move to red states, and bring their same terrible voting patterns to the new locale.
There is zero justification for a public school district to hike the maximum number of sick days a teacher is allowed to accumulate from 360 days to either 365 days or 370 days. In fact the maximum number of sick days a teacher can accumulate should be scaled back to 340 days in the Naperville CUSD 203 teacher union cba. Why scale back to a maximum accumulation of 340 teacher sick days? TRS accepts a maximum of 340 days which equates to two years of service credit (a TRS year is 170 days for pension purposes). Refer to Sick Leave”… Read more »
Do payouts of unused sick days at retirement count towards pensionable salary? I thought they were included in the pension calculation (like a bonus).
I believe they receive it as a big payout bonus. And they can add up to a lot. Criminal.
My understanding is that if a school district’s contact allows a payout of unused sick leave, then its permissable. But that’s not counted as pensionable income. Whether income payout is permitted is up to the district contract, but without such payouts a retiring teacher can use 340 days towards years of creditable employment for a higher pension. When a person already has 35 years of service credit you’ve reached the maximum allowable. If the district does not permit such payouts such people simply forfeit those days with no compensation. In short, you can use it sometimes one way or the… Read more »
You can accumulate up to two school years worth of unused sick leave days and turn them in as 2 years of service credit. In other words, workers can retire two years early.
Most career workers who need 35 years for a full pension typically have 33 years of actual service plus 2 years of service as a result of unused sick leave.
Right. I was just wondering if a teacher already reached full pension vesting and had two years of unused sick days, would the payout be a non-pensionable cash bonus? Sounds like that would be the case.
In that scenario the payout for unused sick days at retirement from say 341 days to 360 days is pensionable income (creditable earnings). 360 days chosen as it is the current maximum sick day accumulation in Naperville CUSD 203 per the current cba. A more detailed comment will eventually appear under your original comment. The TRS vocabulary is “sick leave,”, “creditable earnings,” and “service credit” all of which are detailed in the TRS “Tier 1 Member Guide” and “Tier 2 Member Guide.” To reinforce, creditable earnings is the TRS term for pensionable income. One year worked equates to 1 year… Read more »
I think your version is probably right. The usual situation is that if the school district allows payouts for unused sick leave you can ask for it while understanding its unpensionable. Or, you can convert those as if they were teaching days added to your years of service, but you’re not allowed to have both happen simultaneouly. In the scenario you’ve described you are not asking for both to be granted simultaneouly for the first 340 days. The payout applies only for the days exceeding that number. Sounds reasonable or a scam depending upon one’s point of view generally about… Read more »
There is no good reason for a local school board to hike the pay of teachers via the aforementioned scheme. Keep it simple. Quit over complicating an already complicated pay scheme. The specific scheme being sick leave which is a permissible to negotiate in collective bargaining. The specific negotiation being adding an additional 5 or 10 sick leave days to the existing 360 days. When the 360 days already exceeds the 340 day cap in TRS rules for creditable service. Noting once again there are 170 days in a teacher year, so 340 unused sick days can be exchanged for… Read more »
James the TRS member guide states unused sick day (sick leave) payouts are pensionable (creditable earnings).
The way you’ve stated the situation doesn’t appear from your wording to be quoting it directly. Perhaps so, but it appears more as your interptretation. For example, if the last year’s earnings ARE pensionable earning that means granting them is mandatory and that anyone having 340 days would have a final-year salary minimally triple that of his prior-year’s salary and more likely even bumped up by any final year’s common 5% bump. I find that thought possible but highly, highly unlikely. Are you telling me that TRS rules permit a last-year teacher who might earn, say, $120,000 gets pension credit… Read more »
Now, how many here would like advise their offspring to be teachers and do so here in IL? You might also have to tell them there is likely to be a HUGE line of applicants when they start to look for a job!
Sick leave can be pensionable or it can be applied to service credit but not both. So 340 days of unused uncompensated days will count towards 2 years of service credit but will not add to the final salary calculations.
If instead, a school district decided to pay out those days then no additional service credit would be added and the local school district would be responsible for the additional pension costs that results from the final salary being greater than the 6% allowable increase.
James, the links to the TRS Member Guides are in a comment I posted that appears below this comment. I do not know how the sick days play into the final average salary calculation. That is a good question though and I am interested in the answer. If you cannot figure it out by reading the Member Guide, I would hope TRS would answer your questions. Once again, it would be great if WirePoints, Illinois Policy Institute, Taxpayers United of America, Open the Books, or someone would write a report about what is happening with all these unused sick days… Read more »
On the surface of it if unused pension days are pensionable then then the results to that pension are outlandishly “boosting” as you may have seen from an an example I posted earlier. I’ve never heard of any IL teacher haning a pension of such magnitude and think the claim of it being pensionable in the final year of employment where it theoretically can triple that salary to be obviousy false. As a final thought I suppose, though, that there may be some obscure meaning not pertaining to the initial pension calculation. Thanks for your thoughtful response.
It turns out some payments for sick leave days are creditable earnings, and other payments for sick leave days are not creditable earnings. The following is from the TRS Tier 1 Member Guide dated April 2021. “Chapter 3: Earnings” “Creditable earnings” “We recognize the following forms of compensation as creditable earnings:” “retirement incentives and severance payments, including payments for accumulated vacation and sick leave, that are paid or due and payable along with or prior to your final paycheck for regular earnings.” Next. “Chapter 5: Service Credit” “Sick leave” “When you retire, you may receive a maximum of two years… Read more »
This liberal crediting of sick leave towards a pensionable final salary must be relatively new. Some two decades ago if such payments were made to a CPS teacher already having 35 years of employment there was no credit given to that employee’s final salarly in terms of his/her first-year pension determination. Still, I have to question whether anyone retiring from CPS or any other school system actually gets that HUGE last-year bump considered for pension purposes. If so, I’m amazed I’ve never been made aware of it. I’m wondering when this apparently more recent rule that pension credit can be… Read more »
CPS has its own pension fund (Chicago Teachers Pension Fund aka CTPF) that is separate from TRS. The sick leave benefit has been hiked over the years in various pension funds. Just some of the many legislative benefit hikes while pensions were already underfunded (at one time CTPF was close to being fully funded). I am guessing that many or most of the large sick leave conversions to cash payments are in the form of non creditable earnings (as opposed to creditable earnings), in which case the payouts don’t hike the pension; but I have no idea. I suspect Wirepoints… Read more »
Here is an article that shows spiking is more common then most realize. https://reason.com/2019/02/21/illinois-cops-pension-gimmick-scheme-cou/ Even though they closed the loophole I’m sure they found a way around it. Rockford school district has over $3M in penalties for exceeding the 6% cap on spiking many getting 15-20% increases. So how much they are getting depends on the value of sick days/unused vacation/etc. My local rep asked if the penalty should be increased and I said that the law states 6% and anything over that should be rolled over to an IRA/Roth/etc or just cashed out and taxes are then paid. IF… Read more »
Sick leave is pensionable salary / pensionable income / creditable earnings in both TRS Tier I (Tier I) and TRS Tier 2 (Tier II) if the employee exchanges their sick days for cash at retirement. At retirement the employee can do the following with their unused sick days: Receive a cash payout. Receive years of service credit (up to 340 days which is 2 years, as a TRS year is 170 days). Donate the sick days to the school district sick bank, if the school district has a sick bank. Any combination of the above. Sick days fall into the… Read more »
Actually, there is. ISBE releases a Teacher Salary Study every year, which we cited in the piece. It has every district’s salary milestones, heath insurance benefits, sick leave info and more. https://www.isbe.net/Pages/TeacherSalaryStudy.aspx
785 districts allow teacher to accumulate 340 or more days of sick leave.
Of those, more than 330 allow teachers to accumulate unlimited sick leave.
Thanks John.
Do you know the meaning of “U” mean in that last column of the TSS report?
“Null” is no response?
I wonder why the column is titled, “DAYS SICK LEAVE ACCUnlimitedMUnlimitedLATION BEYOND 180 DAYS.”
The minimum number of sick leave days a school district must allow a TRS member to accumulate in state law is 180 days not 340 days?
That still leaves of course no annual report of school district conversions of sick leave to service credit, and cash (both creditable earnings and non creditable earnings), per employee.
John, I found the answer to one of my questions.
As of 2002, per state law, 180 days was the minimum number of sick days (sick leave) a school district was required to allow a TRS covered employee to accumulate.
https://mhtlaw.com/2002/08/31/new-law-allows-teachers-to-utilize-up-to-two-years-of-accumulated-sick-leave-toward-creditable-service-in-trs
http://joshherman.net/wp-content/uploads/2016/07/Teacher-use-of-up-to-two-years-sick-leave-toward-TRS.pdf
Per
105 ILCS 5/24-6that is still the case today.https://www.ilga.gov/legislation/ilcs/fulltext.asp?DocName=010500050K24-6
I have nothing against offering teachers a generous amount of sick days. They’re surrounded by sick kids all the time. School districts should staff full-time subs and assume the teachers will need most of the sick days. But to be able to accrue two years worth of sick days and count it as service time towards a pension is absurd. An unused sick day does not count as time educating children. Sick leave payouts should be eliminated or severely capped. Let teachers put their unused sick days into a pool that other teachers can use in times of hardship. Maybe… Read more »
Yes they are surrounded by lots of kids with the dreaded SNOT variant. Pfizer is probably working a snot vaccine.
Yes it’s all the sick kids fault. Come on.