Lots of will, few ways to provide staff raises

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Chicago Public Schools CEO Arne Duncan

photo by John Booz

Chicago Public Schools CEO Arne Duncan

Deborah Lynch, president of the Chicago Teachers Union, says that when contract talks start with the Board of Education she will demand a pay increase that is higher than the “paltry” raises the union got the last time around. “We’ve made that promise to our members,” she says.

But even the 3 percent raise that kicked off the last contract would be a steep challenge for the School Board, which is facing its worst budget year in a decade. Attorney James Franczek, the board’s chief labor negotiator, sums up the situation succinctly: “Expenses are going up. Revenues are going to be down. It’s going to be a bear.”

Franczek, Lynch and even some outside observers say they are confident the two sides will forge a contract without a strike. These optimists note that the union and board already have found common ground on a difficult issue, restoration of bargaining rights the legislature took away from the union in 1995.

But the financial prospects are bleak.

Raising salaries 3 percent while maintaining the status quo in other areas of the contract would cost the board about $142 million, according to current CPS estimates. That includes:

$57 million for increases in the CTU salary schedule.

$34 million for “natural growth” costs, including pay hikes based on seniority and increases in pension costs.

$15 million in raises for other board employees, who historically have gotten what the CTU gets.

$36 million for rising health insurance costs.

But the board can’t count on anywhere near that much new revenue. CPS budget officials say that new local revenues, limited by the state’s property tax cap law, will come in at $36 to $54 million. Federal revenues are a question mark.

Further, the state’s budget crunch could mean that CPS will take in less money next year than this year. Without new revenues, the state will have to cut its budget by an estimated 23 percent, state budget watchers say. A proportionate cut in state funding for CPS would amount to a $345 million loss.

“We have to work real hard with the union to generate new revenue sources,” says schools chief Arne Duncan.

But neither Duncan nor Lynch has promising suggestions.

Despite the pledge of Gov. Rod Blagojevich not to raise taxes, Duncan says he would go first to Springfield.

The Center for Tax and Budget Accountability, a local think tank that monitors state budget and tax policy, has developed a list of measures the state could take to generate new revenue, short of raising the sales and income tax rates. But those measures would generate, at most, $1.6 billion in new money, which is less than a third of the state’s projected $5 billion revenue shortfall.

Blagojevich says he has his own list of money-saving measures, but his still-unspecified suggestions would total just $1.2 billion. And powerful legislators have already raised questions about the kinds of cuts the governor has in mind.

“We’re going to be walking on a tightrope until all this is over,” says Andrea Ingram, who tracks tax and budget policy for the advocacy group Voices for Illinois Children. “Everybody who was involved last year understands that right up until the last minute, the winners and losers were flipping with regularity.”

Asked how she thinks the Chicago School Board might come up with more money, Lynch first suggests cutting administrative positions. She reasons there are a lot to cut because few schools can claim the pupil-teacher ratio that the School Board boasts for the system as a whole. Counting all employees with a teaching certificate, including administrators, the ratio is 22 to 1 in elementary schools, according to the board’s web site.

“We’ve seen a quadrupling in the last year-and-a-half of the number of people making over $100,000,” Lynch adds. Some of the higher-paid administrators are in the new area instructional offices (AIOs), a realm that Lynch suggests may be overstaffed. “There are new titles and job descriptions emerging around that model,” she says.

Duncan isn’t buying her line of thinking. “We cut 400 positions in the last two years,” he says, emphasizing that teacher positions were spared. He adds that the new instructional leaders are essential for improving achievement. “I think the system we had [with six regional offices] was unworkable. God couldn’t do that job well. Getting some absolute star principals, who are respected by their peers, and giving them a manageable number of schools to work with and letting them focus just on instruction will pay dividends in the long run.”

Lynch says the after-school program is another place to look for cuts. “Many of our members believe they’re bleeding the day program,” she says. By beefing up programs during the school day, CPS could “reduce the need for after-school remediation, so that kids can get it right the first time.”

Duncan doesn’t buy that one either. “Obviously, we’ll look at everything, but the after-school program has been really effective,” he says, giving credit for last year’s rise in test scores to a bump in after-school programming. And parents are fans, he says.

“Parents really appreciate it. Those non-school hours are times, as you know, of real anxiety for parents.” Teachers too. “We employ thousands of teachers during the non-school hours, so it’s a way for teachers to pick up additional pay from us.”

Neither Duncan nor Lynch mentioned a recent report that found that the board gets little bang for the $123 million central office spends on professional development for teachers. The biggest single item, accounting for $56 million, is the eight professional development days required by the board-union contract. Asked whether those days might be a source of savings, both Duncan and Lynch said only that they would consider it.

Pate’s roadblock

Former State Senate President James “Pate” Phillip (R-Wood Dale) also threw a wrench into negotiations when he held up legislation that the CTU said was necessary for talks to begin.

The board and the union spent much of the summer hammering out an agreement that would partially restore the union’s bargaining rights over class size and other issues, and they spent much of the fall bringing the city’s business community on board. But their legislation failed to pass in the veto session when Phillip refused to let it be called for a vote.

Lynch says she won’t sit down at the bargaining table until that measure becomes law. With Democrats in control of both legislative houses and the governor’s mansion, that’s sure to happen, but Lynch says that even with the bill getting “fast-track” treatment, it probably won’t be before early March. That leaves less than four months before the CTU contract expires June 30.

With so much riding on state legislative action, negotiations are expected to go down to the wire and possibly right up to the start of the 2003-2004 school year. “It’s hard to nail down an agreement when you don’t know what the revenues are going to be,” notes Northwestern University researcher G. Alfred Hess Jr., a longtime watcher of board-union relations.

Despite the difficulties, board negotiator Franczek says he’s expecting things to work out. “The good news is, you’ve got people who are optimistic and positive and want to see it work,” he says. “And so, chances are, it’ll work.”

Duncan says he’s looking forward to negotiations. “Our relationship is in a better place than it’s ever been,” says Duncan. “I think we’re coming into this with a spirit of partnership that we haven’t had previously.”

Outsiders caution that good will is not enough.

Hess sees lots of common ground between Duncan and Lynch, including a shared commitment to professional development for teachers. “But that doesn’t mean that they can necessarily resolve these fundamental issues.”

“You’ve got new people bargaining, and there’s always a learning curve,” notes Ald. Patrick O’Connor (40th), who chairs the City Council’s education committee. Having veterans like Franczek on board doesn’t change that, he says. “Even though you may have the same attorneys in there, their clients will be hearing a lot of this stuff for the first time.

“The one thing I’d encourage all of them to do is to agree on the finances—because that makes the conversations real,” says O’Connor. “You can posture, say what you want, but there’s a difference between what you want and what’s actually in the cookie jar. I hope they have enough trust in each other to say, ‘Here’s where our books are, now let’s sit down and talk about it.'”

If the issue of the area instructional offices is any indication, that isn’t happening. CPS officials have said that creation of the area instructional offices—an area where Lynch believes trims could be found—did not increase costs. Their printed budget shows the area offices costing $1.2 million less and having 20 fewer staffers than did the regional offices they replaced. But a Catalyst analysis of the district’s line-item, electronic budget file shows that more than 20 regional staffers were simply moved to other budget lines or placed in central office positions that support the new area offices.

However, even a frank discussion on finances is unlikely to produce quick agreement, O’Connor says. “I don’t think the union leadership can afford to salt it away quickly. When there’s a change in leadership, people think, ‘We’ve got to hit a home run here because we’re new.’ They went through this change because people said the other guys were rolling over. If they come back and say, ‘Well, we got a contract,’ people will say, ‘Hey, what happened to stamping our feet?'”

The fiscal situation “can be plain as day, and they’ll still have to go through a certain amount of exercise,” O’Connor says.

O’Connor also warns that Lynch’s promises could come back to haunt her. “When you make promises before you know what the numbers are, you risk breaking the promise if you’re going to negotiate reasonably,” he explains. “Unless she sees some numbers that are different from what we see, or unless the state’s going to come through with more money, those promises are going to be real hard to deliver on.”

There are still other pressures on the union. “No public-sector union people want strikes right now,” says John Ayers, executive director of Leadership for Quality Education, a business-backed school reform group. “It does more harm than good, and they’ve learned that. How many [American Federation of Teachers] strikes have there been in the last 10 years? Not many. Partly that’s because there’s been a diminution of labor solidarity, but partly it’s because they have a big public perception problem: For teachers, as professionals, burning wood in garbage cans and screaming obscenities is not a good image.”

If there were a strike, “the union would win points with its membership, but I’m not sure how it would stand with people of Chicago and downstate,” says Jeffery Mirel, a history professor and dean of the education school at the University of Michigan. “Teacher unions are not high on everybody’s gift list. Teachers are, but not teacher unions.”

Teacher unions in Michigan took it on the chin in the 1990s, as then-Gov. John Engler outlawed strikes, in effect, by imposing enormous fines on striking teachers and unions. “The public was not outraged” by Engler’s anti-union actions, says Mirel. “Had he been able to run again, he’d have won, and his antipathy to the union was something he stood proudly on. That’s not likely to happen with a Democratic legislature and a Democratic governor, but as we know, things change.”

Despite the budget woes and other pressures, few sources think a strike is likely. For one, the board also has a strong incentive to avoid a breakdown in negotiations: A strike—especially if it were long or resulted in only a one-year contract—would disrupt 10 years of relative stability and threaten Mayor Daley’s longtime dream of keeping middle-class families in the city and its public schools.

Longtime observers note that when push comes to shove, the district finds money in its enormous budget, which is now $3.5 billion. And the union has accepted such sleight of hand as raises that begin mid year and, therefore, cost less at the outset. In the words of Carolyn Nordstrom, president of Chicago United, a business organization that promotes racial diversity and equity: “What I’ve learned about Chicago is that budget magic happens.”