Yesterday, the Chicago Teachers Union rejected the city’s contract offer. This is the CTU explanation:
CHICAGO – After much deliberation, the Chicago Teachers Union has rejected the Board of Education’s most recent contract proposal because it does not address the difficult conditions in the schools, the lack of services to our neediest students or address the long-term fiscal crisis that threatens to gut public education in the city. Moreover, educators do not believe the Board will honor its promises because it has lacked the will to join with parents, students, community and others in identifying existing revenue solutions that can stabilize the district.
“Chicago Public Schools (CPS) challenges are a revenue-based problem because two of the three biggest cost drivers are things that have to be paid: pensions and debt service (which includes the swap termination payments),” said CTU President Karen Lewis. “The third biggest cost driver is charter school proliferation—and though they’ve promised to halt charter expansion there is a state commission that can override their decision. There are no guarantees.”
Lewis said CTU members have given more than $2 billion back to the district over the last five years, including $500 million from the 4 percent raise that was rescinded in 2011; $500 million from layoffs over this period, including from the school closings; and $1.2 billion from the three- year partial pension holiday between 2011 to 2013.
“Simply signing a contract with CPS will not bring them a windfall of resources from the state,” Lewis said. “We have to exhaust every option available, which includes terminating those swap deals, returning the TIFs to the schools and a financial transaction tax that could bring hundreds of millions of dollars to the city. Without some real movement on the revenue problems, we can’t trust that they will honor any words offered in a four-year contract deal.”
It should be noted that the CPS bond sale went south last week because investors are skittish about the real financial challenges the district faces. The downgrades came after investors’ concerns about the city’s inability to raise revenue. Also, the district is using short-term credit lines to manage cash flow because its cash flow is so limited. The money from property taxes is already spent – those short-term lines have to be repaid.
“CPS has been living on borrowing for too long,” said CTU Vice President Jesse Sharkey. “Now to turn around and blame teachers and staff for that debt while letting bankers off the hook is not acceptable. We think bankruptcy is a bluff, but if it isn’t, the mayor and his handpicked school board need to examine our commitments to progressive revenue.”
CPS’ uses this math to plug its budget hole:
· $200 million from the state for pensions
· $150 million from the state in a school aid formula change
· $170 million from a new local property tax levy for pensions
· $150 to $175 million from eliminating the teacher’s pension pickup and from increased healthcare costs.
“That’s about $700 million of the claimed $800 million deficit,” said Sharkey. “They want us to foot two chunks of that through property tax increases and classrooms cuts. We need a big fix to school funding at the state level through progressive taxes on wealthy people. The Board cannot continue to balance its budget on teachers and students by cutting our compensation and eliminating vital education services such as special education.”
Today, CTU took action to protest the city’s actions:
FOR IMMEDIATE RELEASE CONTACT: Stephanie Gadlin
Feb. 2, 2016 312-329-6250
CTU to close Bank of America account and challenge City of Chicago and CPS to do the same
News conference and action at 10:00 a.m. Wednesday
CHICAGO – The day after the Chicago Public Schools CEO Forrest Claypool declared war on public school educators by threatening another $100 million in classroom cuts and the snatching of their pension pick-up benefit, the Chicago Teachers Union will engage in a series of non-violent direct actions to call attention to Mayor Rahm Emanuel’s refusal to explore every revenue option available to him to stabilize the school district. Instead of working with the CTU to return toxic swap payments, tax the wealthy and restore the TIFS to the school district, the mayor would rather have Governor Bruce Rauner send in the Illinois National Guard to take over CPS.
CTU Officers; toxic swap experts; community allies and others
Will close its account with Bank of America in the amount of over $700,000 and redirect those monies to Amalgamated Bank
Wednesday, February 3, 2016
Bank of America
35 S. LaSalle Street, Chicago
Bank of America and other financial institutions that sold CPS toxic interest rate swaps are demanding a payout of at least $228 million, which is almost the exact same amount as the recent cuts enacted by the Board to our schools and special education at the same time. In total, the City and CPS is expecting to lose $1.2 billion on the swaps. CTU has asked the Board to be a partner in challenging these rip off, toxic swap deals for years.