Pension money sought to boost school rehab

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Illinois teacher & CPS teacher pension

Illinois teacher & CPS teacher pension

The Board of Education is beating the drum again on a familiar topic: getting the state to contribute more money to the Chicago teachers pension fund so that the board can build and rehab more schools.

Here’s how that convoluted equation works: The pension fund for Chicago teachers already is fully funded, meaning its $8.6 billion in assets are sufficient to cover pension costs for 16,000 retired teachers and 35,000 still on the job, according to the funds fiscal 1999 annual report. If Chicago got more pension money, the board says, it could use it to back the sale of more construction bonds.

Chicago portrays its pension quest as a matter of equity. Until 1996, the state split its teacher pension appropriation on the basis of the percentage of the state’s teachers the pension fund covered: Chicago got 25 percent, and the state teacher pension fund, which covers all other teachers in the state got 75 percent.

However beginning in 1996, the state began playing catch-up on the state fund and limited its payment to Chicago’s robust fund to $65 million a year. Currently, the state fund is only 67 percent funded. Chicago’s fund wound up in much better shape because, until 1995, local property taxes had supplemented the state’s contribution. As part of the 1995 amendments to the Chicago School Reform Act, the Legislature folded the Chicago teacher pension property tax rate and five other rates into one account, which allowed the board more flexibility.

This year, 91 percent of the state teacher pension appropriation will go into the state fund, and 9 percent will go into Chicago’s. If the state went back to paying proportionately, CPS would reap as much as an extra $18 million, which it says could guarantee another $700 million to $900 million in capital improvement bonds. And that would pay to build 18 to 20 new schools.

School Board President Gery Chico figures it would take an additional $2 billion in capital funds to relieve crowding and bring all schools up to par.

“We’ve done a great deal of work in terms of fixing the absolute worst schools [and] battling the absolute worst overcrowding,” CPS Operations Director Tim Martin says. “But the system is still deteriorating, and we’re still overcrowded.”

Overcrowding at several schools on the Northwest and Southwest sides are CPS’ main capital concern. For example, at Kelvyn Park High School close to 2,000 students are enrolled in a building designed for a capacity of 1,300, says Principal Diana Hernandez-Azcotia.

To accommodate all its students, Kelvyn Park operates three day shifts, and has about 250 students enrolled in evening classes. Even so, Hernandez-Azcoitia says, staff and students have a tough time getting around the school. “You can’t move when you try to walk through the halls,” she says. The board has already spent $10 million to buy land to build a $35 million facility and is likely to move ahead, even without additional bond funding.

CPS has tried repeatedly to get the Legislature to chip in more pension money, and Sen. President James “Pate” Philip shows no sign that he’s willing to relent. His spokesperson, Patty Schuh, says only that a change in teacher pension funding has not been formally proposed.

Chico hopes that a pending bill dealing with state employees might provide an opening this year. Democrats could pledge to support the state employee bill in exchange for votes to approve more state money for Chicago teacher pensions, he suggests.

With the mayor, business leaders and community groups arguing for the measure, he says, “maybe the message will make it through.”

CPS also is eyeing federal funds to pay for capital projects. Congress considered a national school repair bill last year, but the measure never came to the floor for a vote. House Democrats plan to revive the proposal this spring.

Funding formulas

The state Legislature also is considering a number of changes to school funding formulas, including basic state aid and the state Chapter 1 supplement.

“Appropriation will be hotly debated,” says Sen. Dan Cronin (R-Elmhurst), who chairs the education committee.

A task force on education funding, convened by Gov. George Ryan, is recommending that the state raise its per-pupil funding guarantee to $4,560 per pupil from the current $4,425. But some education groups say that’s not nearly enough. It should be closer to $5,200 per pupil, says William Burns, education and tax policy manager for the Metropolitan Planning Council.

The task force is also recommending that the eligibility threshold for schools to get state Chapter 1 funds be lowered to 15 percent from 20 percent—a change that would also mean more money for CPS.