Could Chicago Public Schools’ troubled pensions become the model for the rest of the state?
Chicago Public Schools continues to face severe budget problems. As a result, it's laying off staff and cutting programs. And part of the reason for those reductions has to do with the district’s pension obligations.
It’s raised the question: Why do some Illinois lawmakers look at Chicago Public Schools’ pension structure as the model for every other school in Illinois?
In this year alone, Chicago Public Schools says it’s $1 billion in debt.
To give you an idea of what that means for schools, here’s how Guadalupe Rivera at Morrill Elementary School on the southwest side of Chicago says her school could be affected.
- They used to have four teaching assistant positions and two special education teaching positions and those had to be cut.
- Programs used to help students who were struggling. They would help differentiate instruction,” Rivera said. “They helped English language learners as well.”
- Students have to pay a $50 fee to join sports. And it’s $50 each sport.
And Rivera said the list goes on.
Cuts like these are being proposed at schools all around the city. The school system said these cuts are happening for a few reasons. Peter Rogers, the chief financial officer, said the main reason is because the district owes an added $400 million just for its retirement system this year.
“The biggest factor in terms of increase year-over-year, is without a doubt, far and away, the pension fund required increase and it will continue to do so over the next several years,” Rogers said earlier this week.
In May, the district tried to temporarily delay paying the whole $400 million in one budget cycle. But to do that, it needed the ok from Illinois lawmakers in Springfield.
And that didn’t go so well.
At the time, State Rep. Dennis Reboletti (R-Addison), said he’d seen the district ask for similar measures in the past.
“You talk about the definition of insanity is doing the same thing over and over again, expecting a different result. This pension holiday will probably work better than all the previous pension holidays,” he said sarcastically on the House floor.
The bill failed, meaning Chicago Public Schools has to pay that extra $400 million into its pensions.
Yet two of the most powerful lawmakers in Springfield continue to push to make Chicago’s pension structure the model for every other school in the state. Chicago contributes to its own pensions. But the state pays for suburban and downstate schools.
And lawmakers like House Speaker Michael Madigan (D-Chicago), say it’s high time those schools pay for their own teachers’ pensions.
Madigan even has a phrase he likes to call it: the “free lunch.” Madigan has said it’s bad management to have the state pay for teachers’ pensions when the school districts can set the retirement benefits. And Senate President John Cullerton (D-Chicago) is on the same page.
“We have to pay, because of some anomaly in the law, for all of the suburban and downstate teachers, all the university employees and all the community college employees,” Cullerton recently said in an interview with WBEZ. “That’s the state’s obligation. No other state has that. And the reason why we fell behind in making these payments is because the bill is so high.”
But while Cullerton is pitching that all school districts should pay for their pensions, he’s also proposing that the state help Chicago’s schools with its pension obligations, that extra $400 million that’s being partly blamed for causing all the cuts.
“All these cuts that you’re hearing about in these schools, that’s directly related to the Chicago teachers’ pension crisis and we really have to focus on that, even, arguably, even before we do the state pension funds,” Cullerton said.
The situation makes the superintendent of west suburban Elmhurst District 205, Dave Pruneau, look at Chicago’s pension difficulties as a cautionary tale for every other school in the state if pension costs eventually get shifted to the districts.
“They’re going through a lot of - (it’s) kind of a precursor of where we might be in a lot of districts in Illinois in the next few years,” Pruneau said.
Pruneau said his school district has seen about $6 million in cuts in the past three years. Those reductions have mostly been administrative, but if the district has to gradually start finding money for its teachers pensions, those cuts could start moving into the classroom.
Pruneau pitched the idea of capping how much pension costs suburban and downstate schools should have to pick up. But regardless of what is eventually decided, whether Elmhurst starts paying for its teachers pensions or not, Pruneau said he’s already seen a consequence of the ongoing debate.
“It’s very tough right now beyond a one or two-year window to plan long-term because you just don’t know what’s happening on the revenue side with the state,” he said.
Pruneau said that means some capital projects on his wish list won’t be going anywhere any time soon.
Something every other school in the state could be seeing.
Tony Arnold covers Illinois politics for WBEZ. Follow him @tonyjarnold.