As the Chicago Teachers Union governing delegates prepared to meet next week to consider a tentative contract agreement that averted another teachers strike, the Civic Federation demanded Wednesday that Chicago Public Schools spell out the cost of the deal and questioned the wisdom a retirement incentive.
The retirement perk is tailor-made to replace veteran teachers who are paid more — and who would continue to contribute just 2 percent to their pensions — with younger teachers who will be paid less while also making the full 9 percent pension contribution.
Teachers who agree to take advantage of the offer will get a one-time payment of $1,500 for every year of service. That money would not apply to their pensions. But there’s a catch: The offer will kick in only if 1,500 teachers sign up for it.
There’s a similar, but cheaper, retirement option for teachers aides: $600 for every year of service. That offer will apply only if 600 aides sign up.
In either case, there is no age limit for any employees — they merely have to have worked a minimum number of years with the district, CPS said.
Civic Federation President Laurence Msall on Wednesday raised red flags about that incentive.
“Too often, there are unintended consequences and severe costs to government from offering early retirement,” Msall said.
“We need details of this early retirement offer to see if it’s a net plus to the district. And the impact on the pension funds from having early retirees and longer beneficiaries needs to be part of the calculation.”
Msall acknowledged that it’s a “very positive thing” that a strike was averted, but he demanded to know the precise cost of the agreement and questioned how a school system on the brink of bankruptcy will pay for it even with $87 million in surplus money generated by tax-increment financing districts.
CPS had not budgeted for any spending increases and even budgeted in millions in labor concession savings they hoped to achieve, Msall said.
“Because they didn’t get veteran teachers to increase their pension contribution and because there are some retroactive pay raises built in step-and-lane [pay hikes for education and seniority], we don’t expect it will be a net savings and that, instead, it will be a significant cost,” he said.
CTU members still have to ratify the agreement for it to become a contract. The union’s governing House of Delegates will meet Oct. 19 to review the proposed four-year contract deal and set the referendum in which the 25,000 members will vote. Only the members can vote down the agreement.
The agreement forged by union leadership plus a 40-member Big Bargaining Team with the schools hasn’t faced major opposition yet. That’s partly because it’s “significantly better” than a January proposal that was shot down, according to CTU President Karen Lewis.
CPS has acknowledged that the costs are higher but still will not provide any details. CPS has claimed $300 million in savings over the life of the four-year agreement but will not spell out how.
CPS spokeswoman Emily Bittner said CPS would not share details “out of respect for the CTU’s ratification process” and would release more “after the CTU has had a chance to share information with their members.”
The eleventh-hour agreement that staved off what would have been Chicago’s second teachers strike in four years called for the city to declare a $175 million surplus from tax-increment financing funds and give $87 million of it to CPS.
That paved the way for Emanuel and his hand-picked Schools CEO Forrest Claypool to drop their longstanding demand to eliminate the 7 percent “pension pickup” granted to teachers years ago in lieu of a pay raise.
Instead, veteran teachers will continue to contribute just 2 percent to their pensions. Newly hired teachers will contribute the full 9 percent, but they will get a commensurate pay raise, making the provision a wash.
By opening the TIF piggy bank and retreating on the pension pickup, critics contend that Emanuel gave away the store to the CTU to guarantee labor peace.
A closer reading of the mayor’s budget also includes yet another concession by Emanuel: He’s earmarking $1 million in revenue generated by the city’s “digital lease tax” to be used toward CPS computer science programs.
That’s rather fitting, considering that at Emanuel’s insistence, computer science is now a graduation requirement at CPS high schools.
During a meeting Tuesday with the Chicago Sun-Times editorial board, Emanuel denied that the teachers union got the better end of the deal — again.
The mayor argued that a pay freeze for veteran teachers during the first two years of the contract and the teachers’ increased health care contribution offset the cost of the pension concession. Teachers also get a 4.5 percent cost of living raise during the last two years.
The tentative agreement was announced shortly before midnight Tuesday, leaving parents and students on edge.
But Emanuel’s 2017 budget book, printed days before that deadline, included this line: “The 2017 declared TIF surplus of $175 million provides $87 million to Chicago Public Schools and $40.5 million to the city of Chicago.”
That means Emanuel kept teachers and parents guessing until the very end, knowing full well the price he was prepared to pay to avert a strike.