The cost of the proposed teachers’ contract with the city’s public school system amounts to about $8.9 billion over four years — a deal that would cost taxpayers at least $100 million more than the one teachers rejected in January, the Chicago Sun-Times has learned.
“I would say this deal has about $100 million more in it,” said Robert Bloch, a longtime attorney for the Chicago Teachers Union who was at the bargaining table late Monday when a strike was averted minutes before a midnight deadline.
The additional cost of the four-year contract proposal compared to the previous offer might even go beyond that, Bloch noted, saying the Chicago Public Schools’ “finances are so opaque, it’s hard to know exactly what they’re spending, what the cost is.
“There’s not full agreement on the cost of certain elements of the contract, which makes it hard,” Bloch elaborated. CPS estimated that salary increases for teacher experience and education would cost $30 million a year, but the union considers it a wash “as people move up the ladder and fall off.”
Despite a demand from the Civic Federation government watchdog group to disclose and break down the deal’s cost, CPS officials and Mayor Rahm Emanuel’s administration are refusing to spell that out for Chicago taxpayers, who have already have been hit with $1.2 billion of new taxes to solve pension crises plaguing city pension funds, as well as the fund that covers school retirees.
Questioned by the Sun-Times about the potential for the new contract to cost more than the one the teachers rejected in January, a mayoral confidant confirmed there would be an increase but contextualized it as relatively small given that the four-year deal would cost about $8.9 billion — or about $2.2 billion a year.
Top mayoral aides have feared that putting a price tag on the agreement could negatively affect next week’s vote by the Chicago Teachers Union House of Delegates.
“In 2012, we got rejected by the House of Delegates. So until the House of Delegates votes, we won’t be out there saying anything about how much it costs or that we’re spending this much more on teachers,” said a mayoral confidant, who asked not to be named.
The eleventh-hour agreement that staved off what would have been Chicago’s second teachers’ strike in four years calls for the city to declare a $175 million surplus from tax increment financing funds and give $87 million of that to CPS.
Among the projects sacrificed was Emanuel’s plan to build a $60 million selective enrollment high school on the Near North Side that was to be named after President Barack Obama.
That paved the way for Emanuel and his handpicked 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 contribute 2 percent to their pensions while newly hired teachers will contribute the full 9 percent.
The agreement also includes a potentially costly retirement incentive for veteran teachers. Teachers who agree to retire early will get a one-time payment, which doesn’t apply to their pensions, of $1,500 for every year of service. But there’s a catch: at least 1,500 teachers must take advantage of the offer.
Teachers aides who agree to retire early will be paid $600 for every year of service. That offer will apply only if at least 600 teachers’ aides take it.
The proposed contract also includes promises of additional personnel and cash to overcrowded schools and classrooms.
On Thursday, the mayoral confidant acknowledged the obvious: the new deal will cost more than the one shot down last winter.
But the Emanuel adviser insisted that the “first-year cost” of the last-minute concessions would be “more than covered” by the $87 million of TIF surplus, and health care reforms and increased pension contributions would help defray the added costs in the third and fourth years of the agreement.
“We wouldn’t go into a contract we didn’t think was affordable,” the mayoral adviser said.
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 offset the cost of the pension concession.
“They said that was a problem. I said, ‘OK.’ So we worked the benefit structure to address their concern, but then to address our concern. When you negotiate, you listen to the other side. You hear what they have to say. And we now have an agreement,” Emanuel said. “The financial picture of CPS is better. But more importantly, we’ve kept cuts away from the classroom. That’s my No. 1 goal.”
The mayor also touted his decision to create what he called “security” around early-childhood programs by adding teacher aides to overcrowded classrooms.
“We made sure that, where we’re seeing growth in early childhood, where we’re seeing attendance increase, that there’s teacher aides in there so we can keep the classes and the teachers protected,” the mayor said.
Emanuel was asked whether teachers “did themselves a favor” by rejecting the earlier deal.
“It depends how you look at it,” he said. “I think we all came away with a good deal.”