Why the Chicago Teachers’ Union Rejected the Latest Contract Offer/ Rally Against Mass Layoffs Today Feb. 4

“After much deliberation, the Chicago Teachers Union 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 for the 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than $2 billion back to the district over the last five years, including $500 million from the 4 percent raise that was rescinded in 2011; $500 million from layoffs over this period, including from the school closings; and $1.2 billion from the three- year partial pension holiday between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.’”

From CTU’s Communications, February 1, 2016