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.
The Education Freedom Tax Credit, also known as the Federal Scholarship Tax Credit, will give Illinois students access to donor money if the state opts into the program.