Members of the Chicago Teachers Union are walking off their jobs today (Friday, April 1), leaving more than 350,000 students in the lurch.
The union has been engaged in contract talks for the better part of a year, but negotiations are not going its way. CTU executives coaxed teachers into the one-day strike because they know shutting down the schools system inflicts real pain on real people. It’s also proven an effective strategy in dealings with Chicago Mayor Rahm Emanuel; a seven-day walkout in 2012 resulted in 13 percent raises for teachers and Emanuel backing down from almost all his contract demands.
This time, however, the union strategy is unlikely to play out the way CTU officials hope. Sure, they might succeed in embarrassing Emanuel again, but Chicago’s fiscal reality has set in. The city is broke. The schools system alone has a $1 billion deficit this school year. The mayor already enacted a historic city property increase last fall, and lenders are charging a pretty penny for the city to borrow more. It doesn’t matter how strong the union bargaining position is when the cupboards are well and truly bare.
Teachers’ absence from the classroom today leaves 350,000 kids without a place to go in the crime-ridden city, to say nothing of lost learning opportunities. And it’s questionable whether the one-day strike is legal. But CTU President Karen Lewis is undeterred: “What are they going to do, arrest us all? Put us all in jail? There’s not 27,000 spaces in the Cook County Jail right now,” Lewis told teachers.
The union’s game plan is straightforward. Walk out. Kids go untaught. Parents grow angry. Publicity rolls in. The bureaucracy can’t respond fast enough. Political leaders cave. The union wins at taxpayers’ and students’ expense.
This take-no-hostages approach goes a long way toward explaining why, at $61,831 average annual salary, Chicago teachers are the highest-paid educators among the nation’s 10 largest school districts. Steep salaries deliver twice: The average career teacher at CPS can expect to retire in her 50s and receive more than $2 million in pension benefits after retirement. Teachers are expected to put just 2 percent of their salaries into these nest eggs, leaving taxpayers on the hook for the rest. It’s a sweet deal if you’re on the receiving end.
Overly generous compensation, combined with a lack of transparency, rampant cronyism and other factors, is what has landed CPS in the hot seat. Its $1 billion deficit is on a discretionary budget of about $3 billion, while another $3 billion of the school system’s budget is spent on fixed costs such as debt. Most institutions in this position would end up in bankruptcy court.
In the past, Chicago Teachers’ Pension Fund was used to float rounds of teacher pay hikes. But today the fund is barely half-funded, putting the retirement security of teachers in jeopardy. Raiding the pension fund yet again might knock it out altogether, especially if the market turns.
Borrowing doesn’t offer an easy answer, either. State law caps borrowing at 9 percent, but CPS recently financed $725 million in tax-exempt bonds at 8.5 percent. That’s roughly the equivalent of paying 13 percent on non-tax exempt bonds. The district’s credit rating has been at junk for a while, and an increasingly precarious financial position could shut them out of the bond market altogether.
Chicago leaders are demanding a bailout from state government — but Illinois’ coffers are dry, too.
CTU executives can pat themselves on the back all they want for sending district officials “a message.” Solidarity is about to get walloped by fiscal reality. For reformers, it’s an opportunity to make sure that what emerges focuses on empowering the kids instead of placating the adults.
Kristina Rasmussen is the executive vice president of the Illinois Policy Institute, an independent research and education organization promoting freedom and prosperity in Illinois. Thinking of submitting an op-ed to the Washington Examiner? Be sure to read our guidelines on submissions.
