The head of Chicago Public Schools is going to slash money from school budgets — in a move that’s escalating tensions with the Chicago Teachers Union.
It comes as the district is also trying to borrow more money from bond markets.
District chief Forrest Claypool sent a letter to union president Karen Lewis that said CPS would begin cutting $100 million from schools and would stop picking up part of the teachers’ pension contribution. He wrote that the changes could take effect in 30 days.
The union fired back, calling the move retaliatory.
“This is clearly a retaliatory message because we didn’t agree with what they came up with,” Lewis said. “We’re not going to be bullied. We have provisions in our contract against bullying. We don’t tolerate it in our schools with our kids.”
Claypool said the cuts — which could mean one position per school, on average — could still be avoided if the two parties reach an agreement soon.
“I would be the happiest guy around if next week we had an agreement with the teachers union and we could rescind the process on these steps,” he said. “We do not want to take these steps.”
School budget cuts in the middle of the school year has been Claypool’s Plan B since last fall—as the district looked for ways to close its $480 million budget deficit.
Claypool’s Plan A was to get help from other sources, including state lawmakers and teachers. Both have now clearly said no.
State lawmakers have made it clear there’s no extra money coming from them, and Gov. Bruce Rauner has continued to advocate for a state takeover and potential bankruptcy for CPS. He even directed the state board of education to begin looking for Claypool’s replacement.
“The state should be able to take over the schools and manage those contracts properly,” Rauner said.
State law would have to change in order for the state to legally take over Chicago schools.
Union rejects district proposal of a four-year contract deal. pic.twitter.com/flEwutRcdp— WBEZeducation (@WBEZeducation) February 1, 2016
On Monday, teachers rejected what both the district and union leadership considered a “serious” contract offer. It would have saved the district millions by having teachers pay more toward their health care and pensions, but it also promised to cap charter school expansion and give teachers more “autonomy in the classroom.”
But members of the union’s 40-person big bargaining team, citing a lack of trust and what union president Lewis called “weasel language” on things like paperwork and standardized testing, unanimously rejected the offer.
The proposal also included a phase out of the district’s pick-up of the teachers’ pension contribution. Typically, the district has picked up 7 percent of the 9 percent employee contribution.
Absent a compromise agreement, Claypool is now planning to do away with that pension pick-up in the next 30 days. Lewis said that move is against the law and the union could take the district to court over it and immediately call a strike.
Robert Bruno, a professor of labor relations at the University of Illinois, called Claypool’s move an escalation, and explained that it could be what’s known in bargaining as a gambit.
“It’s a kind of end move where you try to shake up the bargaining and you come up with a big play,” Bruno said. “It comes with high risk, but it can come with high reward.”
The risk? A teachers strike.
The reward? An agreement in the next 30 days.
Or there could be an entirely different reward that could come from slashing school budgets right now.
Claypool hinted that the budget cuts could also be sending a signal to Wall Street. On Wednesday, the district planned to borrow millions of dollars on the bond market.
“I think we’re sending a very strong signal here that we are going to right the fiscal ship and we are going to do whatever it takes,” he said, when asked what if any role the borrowing played in making the cuts.
CPS had delayed a $875 million bond sale last week, saying they wanted more time to “build the book,” which is basically finding more investors willing to buy the district’s junk bonds.
The abrupt move came shortly after Gov. Rauner first raised the question of bankruptcy.
Matt Fabian with Municipal Market Analytics said the governor’s earlier statements definitely spooked the markets. I asked if that could be Rauner’s purpose.
“That’s just a big step, to say that he’s actually trying to disrupt the bond deal. But… it could be,” Fabian said. “It is starting to look that way, isn’t it?”
CPS plans to use some of the borrowed money to make a payment on other debts, due February 15. Absent that money, the district may have to make more budget cuts.
That’s not something either CPS or CTU would want, labor expert Robert Bruno noted.
“Both parties are obviously invested in the ability to sell bonds,” he added. But on the other hand, the cuts could push teachers to the picket lines.
“We have a lot of our members that have already bought red, thermal jackets,” Lewis said.
But she added that the union remains at the table with CPS, bargaining around the clock.
Becky Vevea is an education reporter for WBEZ. You can follow her @WBEZeducation.
WBEZ reporter Dan Weissmann contributed to this report.