STUMP » Articles » Chicago Watch: What's the Leverage When There's No Money? » 9 March 2016, 07:40

The Chicago Teachers Union is threatening to strike:

Simmering tensions at Chicago public schools rose a notch last week with the announcement that school employees would have to take three unpaid days off this school year.

Chicago Public Schools CEO Forrest Claypool said that the move to lop off one day in March and two days in June is an effort to “chip away at our budget gap” and would save $30 million.

Karen Lewis, Chicago Teachers Union president, responded that adding the unpaid days to a 7% giveback on teacher pension contributions the school district is already requesting in contract negotiations would make for an 8.6% pay cut overall.

And so the Chicago Teachers Union, the third largest in the country, said the system’s move “all but assures” that teachers will go on strike, perhaps as soon as April 1.

Yes. By all means, pick April 1 as your date to strike your symbolic blow.

As per Eric Allie at Illinois Policy Institute:

Kiddies, that candy is gone gone gone. And crying isn’t going to bring it back. I know the tummy ache is awful.

Back to the Fortune article:

Public school teachers’ unions, once able to guarantee their members ever rising wages but now weakened by years of attacks from elected officials, are fighting a rearguard battle with financially insolvent school systems—battered by sagging funding and *higher enrollments*—to retain pay and benefits won long ago.

Higher enrollments?

Really?

Well, that’s only the overall population…

Oh right.

What was that about increasing enrollments? Really?

I’ve written before that the Chicago teachers are in a position of weakness, mainly because who they’re up against has little power as well — that is, Rahm Emanuel. He doesn’t have much money to play with.

And it doesn’t seem these guys have any leverage at all with Rauner. Even if Rauner were a lifetime politician, obviously the CTU worked against his election. They weren’t on his side and would never be. If he cared about re-election, they would be irrelevant.

So… what’s your leverage?

SCHOOL’S OUT FOR… SPRING?

While I wish for an April 1 strike date, there’s an argument that’s not possible:

CTU Threatens to Strike as Early as April 1, CPS Argues That’s Not Possible

The announcement was made on the same day the district said it was laying off 62 employees, including 17 teachers

The Chicago Teachers Union is threatening to go on strike as early as April 1 if Chicago Public Schools follows through with canceling the 7 percent pension pickup it has long made, union officials said Monday.
CTU Vice President Jesse Sharkey told NBC Chicago the union is “considering that possibility,” saying April 1 is the first time the teachers might have to pay the 7 percent pickup, according to their calculations. They argue CPS “can’t change the terms of employment” until there is a new contract.

CPS, however, said a strike is not legally possible until mid-May.

“To keep our school doors open, CPS exercised its right under the contract to eliminate the pension pickup and gave the required 30 day notice to the CTU on Feb. 2,” the district said in a statement. “Once we reach the 30 day mark, we will work administratively to determine the first paycheck that will not include the pension pickup.”

Man, I was hoping for those optics.

Chicago State University may close, though:

State Crisis Management Team Prepping For CSU Shutdown

A crisis management team has been formed to help Chicago State University navigate budgetary peril. State higher education leaders are working to prevent CSU from closing, after eight months of waiting on state funding.

All of Chicago State University’s 900 employees are on notice – they’ll lose their jobs if the governor and lawmakers don’t come through with cash.

“There’s nothing like this. There’s no playbook for how to manage a closure of a public university like this with thousands of students and hundreds and hundreds of faculty and staff,” says director of the Illinois Board of Higher Education, James Applegate.

…..
Members will help CSU develop contingency plans that Applegate says he hopes won’t ever be needed, things like ensuring that even if the school has to suspend operations, students will still be able to access their transcripts if needed “in order to go to and attend another university to continue their education?”

Other schools, like Western and Eastern Illinois Universities, are making layoffs, due to the budget standoff.

I have a feeling lots of admins will get experience in suspending operations in all sorts of places.

CASH? WHAT CASH?

Chicago schools fast running out of cash as standoff with Illinois governor worsens:

Chicago’s cash-starved public schools’ district may be choked off from more loans and find itself unable to meet a $676 million pension payment in June because of a deepening legal dispute with Illinois’ governor.

The state’s school board, stocked with Republican Governor Bruce Rauner’s appointees, is expected to declare Chicago’s school system in “financial difficulty” as early as April under an Illinois law authorizing state takeovers of financially distressed school systems. Rauner, who is seeking to take over the schools’ district, contends that finding would bar the nation’s third-largest public school system from further borrowing.

Chicago Public Schools (CPS), which only just borrowed $725 million through a bond sale, says it is exempt from the law, thus keeping Rauner and his State Board of Education from dictating financial decisions involving the system, including its ability to borrow additional funds.

CPS plans to tap an existing $370 million credit line with Barclays Bank to help pay its June 30 pension obligation, according to Moody’s Investors Service analyst Mark Lazarus. But that could also be in jeopardy because of Rauner’s stance.

Pension contributions are operational expenses, as I’ve mentioned many times before.

They have to borrow money to cover operational expenses… and have no trajectory to get off that.

CHICAGO TEACHERS PENSIONS: FAST FACTS

Illinois Policy Institute on what you should know about Chicago Teachers Pensions:

1. Since 1981, CPS has paid the vast majority of what teachers are supposed to contribute toward their pensions in the form of teacher pension pickups. 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 increased the employer’s contribution by that amount.

…..
3. Higher salaries and generous pension rules are causing teacher benefit costs to soar. Since 1997, teacher pension benefits have grown at a breakneck pace of 6 percent a year. Had benefits grown at a more modest rate of 4 percent, CTPF’s unfunded liability would be at least $5.3 billion less than it is today.
……
6. A well-managed pension fund should be fully funded. CTPF is just 51.5 percent funded.CTPF’s funding level has collapsed due to pension holidays, which shorted the pension system by almost $3 billion over the course of two decades.

Hot damn! They got it right!

I excerpted only 3 items – there are 11 items in total. Check out the full piece.

Here’s something:

And consider how many of those retirees are women, who live a few years longer than men.

AND NOW FOR SOMETHING NOT-SO-DIFFERENT

Obama backs Boss Madigan the Chicago Way:

Before we get into Democrats being shocked at allegations of vote-buying in Chicago, and that other juicy political story of a candidate with a staple in his bloody forehead, consider what President Barack Obama has just done.

Obama backed Boss Madigan the Chicago Way.

The president is making it clear he wants Illinois House Speaker Michael J. Madigan, boss of the Illinois Democratic Party and ruler of the state, to keep ruling as he’s done for decades, even as middle-class taxpayers flee like frightened refugees.

Obama did so by reaching down from Olympian heights to a state representative contest in the March 15 Democratic primary.

He endorsed Juliana Stratton over incumbent Ken Dunkin, who dared break with Madigan and side with Gov. Bruce Rauner and threaten the boss’ rule.

The president of the United States makes an endorsement in a state rep primary and cuts commercials?

When will POTUS start passing out Madigan palm cards on Election Day and endorsing a few Madigan judges? If he does, I’ll promise to buy Obama some goat tacos from Birrieria Zaragoza and hear all about political reform.

Oh, I’m going to have to keep an eye on that race. John Kass’s full piece gets into very local politics that I don’t care to look at right now… I wasn’t aware of this presidential endorsement as it was (I wonder how well-known it actually is, locally. And I really wonder how the primary vote will break.)

His piece ends:

During the Chicago 1983 mayoral election between Mayor Harold Washington, Richard Daley and Jane Byrne, the Washington camp was worried about opponents passing out turkeys and hams to voters.

“Take the turkeys, take the hams,” Washington would say, “and vote for Harold.”

It’s nice to know after all the reform fairy tales and the rhetoric, President Obama still understands Chicago.

And he’s handed Boss Madigan something even nicer than a fat ham off the back of truck.

I don’t know if that’s the case at all.

Because Chicago and Illinois need something other than just a few words. They would really appreciate loads and loads of cash. Turkeys and hams aren’t going to plug the billions-of-dollars hole in Chicago or Illinois finances.

A Presidential endorsement? Well, I’m sure it’s appreciated, but I don’t see this as corruption. It’s just words.

It may be unusual, but I don’t even know how helpful it will be.

So I will have to check next week and see how effective that endorsement was.

Hey Obama, what Illinois needs is some sweet, sweet federal money. Can you give them that?

I don’t see that happening.

Compilation of Chicago posts.