Layoffs on horizon, pension pickup on the way out

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Chicago Public Schools says it will cut $75 million from school budgets before the end of June. Chicago Teachers Union President Karen Lewis says the union won't be "bullied" by the district into accepting a contract deal.

Photo by Stephanie Choporis

Chicago Public Schools says it will cut $75 million from school budgets before the end of June. Chicago Teachers Union President Karen Lewis says the union won't be "bullied" by the district into accepting a contract deal.

One day after the Chicago Teachers Union’s bargaining team rejected a contract offer, Chicago Public Schools leaders told principals to prepare to make mid-year layoffs, as part of $75 million to be cut from school budgets before the end of June.

Principals told Catalyst that within the next two days, network chiefs would tell them how much money they need to cut and by when.

Union officials estimated at least 1,000 educators could be let go.

In a letter to the union dated Tuesday, CPS CEO Forrest Claypool said layoffs would happen “as soon as practicable.”

While some principals said they may be able to stave off layoffs through contingency funds they’ve saved throughout the year, CTU President Karen Lewis predicted the cuts would “harm the most vulnerable students,” such as those who require special education services. But she said the union would not be “bullied” into accepting a contract offer.

“Education isn’t a chess game or a poker game,” she said during a press conference Tuesday afternoon. “These are real lives we’re dealing with.”

For months, the cash-strapped district has been threatening thousands of layoffs to fill a $480 million budget gap if the state didn’t come through with pension relief or if no teachers contract deal were reached by Feb. 1.

CPS also announced that after 30 days have passed, the district would stop paying the so-called “pension pickup” for teachers — a longstanding agreement in which CPS pays 7 percent of the 9 percent union members are required to pay into their pension. The district estimates this will save $65 million by the end of this school year.

Lewis said the union is prepared to file an unfair labor practice charge against the district if it unilaterally eliminates the pension pickup, which was a provision in the teachers contract that expired last June. A spokeswoman said the union is consulting with a lawyer about a possible timeline for filing a case.

Cuts coming to schools

The cuts outlined by the district include:

  • $75 million in reductions to school budgets, including just under $14 million in cuts to charter schools. That figure is based on a 4.3-percent reduction to funds schools receive on a per-student basis. The original per-student rate varied from $4,390 for middle-grade students to $5,444 for high schoolers.
  • The elimination of some programs paid for with federal Title I and II funds typically set aside to help poor students and to train teachers and principals. It was unclear whether this cut would translate to staff layoffs. The district says it will allow schools to apply for $41 million of these federal funds to help offset the per-student cuts. Charters would be eligible for just under $7 million of that.

Principals said they are being encouraged to cut support staff and school contingency funds before laying off teachers.

Troy LaRaviere, principal at Blaine Elementary in Lakeview and a frequent critic of School Board actions, said he would likely cut a half-time counselor who works with older students on social-emotional needs as well as a part-time teacher who helps struggling middle schoolers with math and reading.

Mid-year cuts are “reckless” and “irresponsible,” he said, questioning if they were really necessary. He pointed to a recent report in the Chicago Tribune that showed the district has just enough cash to get through the school year without classroom cuts.

Some principals said they expected the cuts would wipe out money they’ve accumulated over the school year by renting out their facilities or deciding not to spend on certain programs.

“People have been really fiscally conservative and refraining from making large costly budget decisions in anticipation of potential budget cuts,” one North Side principal said.

Some principals speculated that the cuts are a bargaining chip in the contract talks.

As one principal saw it: “It’s a game of chicken between [CPS and the CTU] to see who will walk away most … bruised.”

CPS officials announced the cuts a day before the district planned to sell $875 million in bonds to help with operating costs. The sale initially was scheduled for last week and was delayed, some believe, due to the market’s uncertainty about the district’s finances.

Negotiations continue

Both district and union officials said contract negotiations would continue, though a date hasn’t been set.

“One thing that we’ve always managed to do, even when we were on strike, was keep talking,” CTU Vice President Jesse Sharkey said.

Meanwhile, Gov. Bruce Rauner announced that he had directed the Illinois State Board of Education to begin looking for a new interim head of CPS, in case legislation passes that would allow the state to take over the district until it gets on firm financial ground. Rauner hoped to rally support for the bill on the heels of the CTU’s rejection of the contract offer. But many observers say it’s unlikely state legislators would pass it.

Catalyst reporting intern Stephanie Choporis contributed to this report.

  • Joe W

    About time the pick-up pension is stopped. Teachers want generous pensions they should contribute 100%. They’ve been getting this perk since 1981. Taxpayers deserve a break.

    • Concerned Parent

      Businesses pay a portion of their employees’ social security contribution – 6%. CTU members do not quality for social security.

      They are entitled to a similar pension pick-up..

      • Hope

        The average worker pays 6.5 % of their social security contribution. Retirement can not start until 62 with a huge penalty and full retirement at 67 . Whereas pension members can start benefiting from pensions at 55 depending on years of service. A 12 year difference. In addition , Social Security on average pays under $1500 regardless of how much the individual paid into or earned throughout his or her work history. Do not play the social security card. Both sides are wrong. The teachers can pay their fair share and Claypool can cut the Network Chiefs, Directors etc. earning more than in the private sector for what? Leave the schools whole and cut the fat in Central Office.

  • Concerned Parent

    If Mr. Claypool want to stave off cuts to the classrooms, why will there be no cuts tot wasteful networks? (Another reason not to trust him.) Cutting the networks would save hundreds of aides who work with special needs children.

  • Concerned Parent

    In general many members of the public will attack teachers for not taking a pay cut as a trade off for a no layoff provision that was supposed to last for four years. But most members of the public would never enter into a contract of any type of a company that was publicly being discussed as insolvent. Teachers don’t have that luxury.

    The amount of money CPS is trying to wrench from teachers, inclusive of
    early retirements, is insufficient for CPS to survive anywhere near four
    years. Even with restoring a direct property tax for the pension fund,
    which I support and honestly dread to pay like every other Chicagoan,
    TIF money, etc CPS is not on a.sustainable pathway without an extensive
    imposition of measures of austerity, a cash infusion outside of
    borrowing, and a schedule pf property tax increases that exceed the cap
    for a number of years.

    Therefore in this precarious situation where all long term deals are questionable the validity of a multiple year contract is in question. The school code itself in article 34 offers CPS a blanket escape clause from any
    long term agreement in the situation of insufficient cash flow in the
    years to come. The relevant section reads:

    “Sec. 34-49. Contracts, expense and liabilities without appropriation. No
    contract shall be made or expense or liability incurred by the board, or
    any member or committee thereof, or by any person for or in its behalf,
    notwithstanding the expenditure may have been ordered by the board,
    unless an appropriation therefor has been previously made. Neither the
    board, nor any member or committee, officer, head of any department or
    bureau, or employee thereof shall during a fiscal year expend or
    contract to be expended any money, or incur any liability, or enter into
    any contract which by its terms involves the expenditure of money for
    any of the purposes for which provision is made in the budget, in excess
    of the amounts appropriated in the budget. Any contract, verbal or
    written, made in violation of this Section is void as to the board, and
    no moneys belonging thereto shall be paid thereon.”

    So in each and every year of a contract if the Board determines it can’t
    appropriate sufficient funds to employ the current number of teachers
    with out layoffs the contract could in theory by law be voided. The
    School Code superceeds the contract, in fact all contracts. The union
    would of course be free in that situation to strike because the Board
    voided its own protection over CTU strikes by entering into bargaining
    over layoffs that under existing law they did not have to do. The the
    CTU could also litigate for potential damages to members based on false
    representations on the part of CPS.

    There are many readers that would argue the financial sector of Chicago and the most wealthy citizens should simply be billed for schools in a manner sufficient to appropropriately fund CPS. Existing law does not grant such powers to school boards or really even to the City of Chicago under the home rule provisions. Even if such powers were somehow granted to CPS and or the City by the Illinois General Assembly, very unlikely in my opinion, it would be vetoed by the Governor and there would not be sufficient votes to override right now.
    To force that matter by mass mobilization of people is hard to imagine
    because people outside the city have different interests relating to
    this issue than those of us resident in the city.

    All this leads to a conclusion, keep the contract length as short as
    possible. If the membership feels compelled to give back money it should
    be in as small of chunks as possible. This situation has been
    developing for a long time and it is horrible for teachers, families of
    students, and taxpayers. But we are deep in it now and the situation
    will not be easily fixed.

    Rod Estvan

    • Hope

      You are correct that there are no easy answers. I have no love for this mayor or his successors that continued to raise taxes, squander the money and then fail to find a sustainable funding source for our schools. This problem has existed since the 20’s maybe more. But to continue to expect parents or this cities population to pay for all the debt is wrong. Cuts can be made to the Central Office and Networks without destroying the schools. Teachers can contribute to their pensions.

      Just look at the procurement deals the Board approved in just the month of December knowing fully that they could only pay these expenses by going into debt. Do you ever question why risk averse companies do deals with a cash strapped entity? Because they know the taxpayers will bail the deal out.

      Very few private sector jobs guarantee anything including a job. The pension as a safety net for private sector jobs was eliminated long ago. Is it really unreasonable to expect teachers to pay for their pension contributions. It still is their retirement fund and this would probably make it harder for the District crooks to divert the money for other uses. Put a clause in the new contract about its use/investment.

      The public schools are the only hope for many in this city .Can you image the violence we will have without schools giving options to our population. The schools need to be saved and yes bailed out but everyone must give something. Cut the $100 K jobs and overlapping managers in the District. Have teachers contribute to the pension. Taxes us more but only after the waste is gone. You argue for contract negotiations based on old contracts but shouldn’t it be based on the new reality.

  • Edward Hershey

    This title makes this article into Board Propaganda, in that it states as a fact — that the pension pickup is on the way out — what is not yet settled. We Chicago Teachers pushed against this contract — against the wishes of some in our leadership — largely on the pension pickup. CTU teachers are fully willing to strike. So to say it’s on its way out is to buy the Board’s line.

    There are some around the union who say Catalyst is ruling class propaganda. This headline gives them fuel. And I hope it’s just wrong!

    By the way — the Board is in a deep hole as far as its debts and financing are concerned. Those debts go way beyond any money that could come out of our salaries and benefits. There is absolutely no reason we, teachers, should let the Board take their fiscal irresponsibility out on us.

  • Northside

    Let me preface this with the fact that I am no way some right wing anti-socialist. HOWEVER…would it really be asking so much if EVERY family that can pay between 50 to 1000 (sliding scale) dollars a year per student? I don’t know how the law works, but many suburban schools do it, why can’t we. I don’t think there are many families out there that can’t afford from 5 dollars to 100 dollars a month for their child’s education. I still favor taxing the rich more, and corporations, but why can’t the parents for our students start chipping in SOMETHING. Let’s face it, if the parents, the rich, and businesses don’t pay…it will come out of the teachers pockets. Some teacher, especially assistant teachers, are no richer than many of their students. In some cases, teachers, are paid less than the parents. They have to have some liability in this mess. I don’t care if a family pays 1 penny a month. they need to start making some contributions too, if they want to get free lunches, free after school etc. If every family gave $1 a month that would be 400k in extra revenue a year for CPS. In 9 months that would be 3,600,000. 10 dollars per student per month would be over 36,000,000 …that’s about 553 teachers. Is it really asking so much . I know some families can’t do it. But I don’t think I have know ONE student’s family that can’t afford between 1 to 10 dollars a month.
    Just an idea. Again, I don’t know what the law says…and it might make teachers unpopular with teachers, but isn’t fair. Why should 1000 of teachers (who are not rich) lose their jobs, when parents who are getting a lot of education, when parents could help out for LIKE THE ADD says…for less than a cup of coffee!!!

    • Hope

      Its called taxes when the school system learns to use those its already collecting correctly then maybe. In addition, many parents donate to the schools and some Chicago Public Schools have above 90% poverty rates enrollment are you thinking those parents are better off than teachers making on average above $60,000. To turn your question around Why can’t teachers chip into their retirement accounts? Every other private sector employee does.

      • Northside

        Yes my point is I am willing to lose 10 percent of my income but I also want to see the rich and poor make some contrinution too
        ..I know that many students are in poverty (my school is 93perence). also, many families are paid under the table. I know this is true too…I have nothing against my student’s families…but we ALL must solve this problem..not just teachers…
        I also see many kids bring in video games, cell phones, their families do have disposable income. If every family contributed the value of ONE video game PER YEAR our system would have 20 million dollars a year!!
        why can’t parents pay 1 percent of their income to the schools. SHARED sacrifice…I know many are in poverty…but for literally the price of a bag of chips, or cable tv, or a video game…the school would get a great deal of money. I am not heartless…but I am not talking so much of the teachers who are still employed..but the minute you fire a teacher..they are suddenly in poverty too…so we need shared sacrifice. any family can afford a dollar a week…it is the price we must pay to have children. I am not heartless..just looking for solutions.

  • Joe W

    It’s about time they paid for their own generous pension.

  • sanza

    One thing CPS teachers forget: they work for the public. The public doesn’t work for them. Chicago has 2.71 million people. CTU has 32,000 members (current teachers plus retirees) less than 2% of the population in Chicago. (Probably less, since many retirees — not surprisingly — no longer live in Illinois). So tell me again — why are CTU salaries and pensions so much more important than the other 98%?