The Chicago Teachers Union has threatened to strike as early as April 1 over Chicago Public Schools’ announced plan to stop paying a portion of teachers’ required contributions to their pension fund. Under Illinois labor law, however, CTU cannot legally strike before mid- to late-May.
Pension holidays, steep increases in teachers' salaries, and lopsided ratios of teacher contributions to pension payouts have caused the Chicago Teachers’ Pension Fund’s unfunded liabilities to shoot up to $9 billion in 2015.
Unaffordable salaries and pension benefits on top of a structurally unstable retirement system have pushed CPS to the brink of insolvency despite record tax revenues.
The value of these raises is estimated at $26 million. CTU wanted the education labor board to compel CPS to pay out, even though the district and the union hadn’t agreed to a labor contract.
Among the U.S.’ 50 largest school districts, CPS teachers’ pay ranks No. 1 for teachers with a bachelor’s degree and five years’ experience, No. 2 for first-year teachers with a bachelor’s degree, and No. 3 for first-year teachers with a master’s degree.
The district’s borrowing does take pressure off of the district’s immediate cash-flow problem. However, it does nothing to solve the CPS’ long-term financial crisis and its structural imbalances – in fact it only makes things worse.
The crisis threatens to burden taxpayers with massive, ever-escalating taxes to bail out a system that is not sustainable – government-worker pensions consume a fourth of the state’s budget.