House Speaker Mike Madigan (D-Chicago) and Senate President John Cullerton (D-Chicago) are wrong to insist on a Chicago Public Schools bailout. Chicago politicians and leaders have proved time and time again they don’t deserve a bailout. CPS and Chicago Teachers Union, or CTU, officials have been complicit in the district’s financial collapse.
1. CPS and CTU officials don’t deserve to be bailed out
Most Illinoisans instinctively don’t want to bail out a CPS managed by Mayor Rahm Emanuel and CTU President Karen Lewis. Illinois taxpayers know money for a Chicago bailout won’t make it to the classroom and the kids – it will go straight to the CTU.
This is election time, and neither Emanuel nor Madigan wants a CTU strike before the elections in November. That’s why they need to appease CTU now.
Appeasing CTU is exactly what happened in 2012 when CTU went on strike for a week. Emanuel gave in to CTU demands for more pay even though the district was already facing a $1 billion budget deficit and an $8 billion teacher pension shortfall.
Even more damning is CPS officials’ handling of the district’s teachers pension system. From pension pickups to pension holidays, district leaders shorted teacher retirements by more than $5 billion. CPS used that money to prop up teacher salaries.
2. CPS hasn’t enacted any real spending reforms
CPS and CTU officials want a bailout, but they haven’t pursued any real spending reforms.
In particular, they haven’t reformed a particularly egregious and expensive benefit: teacher pension pickups.
Since 1981, CPS has paid the vast majority of what teachers are supposed to contribute toward their own pensions. Over the last decade, CPS has spent more than $1.2 billion on these pension pickups. Had teachers made their own pension contributions, CPS could have spent that amount on the district’s pension contributions instead.
3. Springfield can’t afford to bail out CPS
Even if the Illinois General Assembly wants to bail out CPS, it shouldn’t. The state has an education crisis that’s arguably worse than Chicago’s.
When measured on a per-student basis – an appropriate, apples-to-apples comparison – the Illinois Teachers’ Retirement System’s, or TRS’s, shortfall is 56 percent higher than Chicago’s. TRS has a shortfall of $37,000 per student, while Chicago’s shortfall totals $24,000.
4. Real education reform means pension reform – not bailouts
Until pensions are reformed, there can be no real solution to the state’s and Chicago’s education funding crises.
Skyrocketing pension costs are siphoning off the majority of tax dollars that should be dedicated to the classroom. In fact, in the last five years, Illinois teacher pensions consumed 89 cents of every new dollar spent on education.
5. A pension cost shift – not a bailout for Chicago – is the real solution
Madigan and others argue for a Chicago bailout because the state pays for the annual teacher pension contributions for all other school districts, but not Chicago’s. But having the state pay for Chicago’s pension contributions going forward isn’t the answer. Instead, the state should stop paying the employer contribution of teacher pensions for all school districts. Individual teachers are not state employees, and the state should not pay for their pension costs.
Illinois needs reforms, not bailouts
Madigan and Cullerton are wrong to insist on a bailout for Chicago. Until CPS passes necessary spending and pension reforms, giving any additional money to CPS will only reward mismanagement and reckless behavior.
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