The head of the Chicago Teachers Union on Friday said she will not accept cuts to retired teachers’ benefits as a way to ease the district’s pension crisis; though she did detail some ideas for easing a funding shortfall of at least $8 billion.
CTU President Karen Lewis said she was “horrified” by the controversial overhaul of state worker pensions that became law in December. That law, which scales back benefits for retirees and increases retirement ages for younger workers, has been discussed by Mayor Rahm Emanuel’s administration as a possible template for the ailing Chicago Teachers’ Pension Fund.
“All right, you can cut pensions,” Lewis said. “Then what happens to those people? So this is not just about a spreadsheet piece, it’s [about] what actually happens to the people.”
Chicago is facing two big challenges with its teachers’ pension fund: a state-mandated $400-million spike in contributions next year and a system that is critically underfunded. The underfunding is due, in large part, to a decade-long contribution holiday - when Chicago Public Schools paid nothing toward its teachers’ pensions - that was followed by a few years of reduced payments.
In an interview with WBEZ on Friday, Lewis said simply delaying the payments is no longer an option. She suggested that CPS needs to reprioritize its budget in order to meet its required $600 million pension contribution next year, pointing to a recent decision by CPS’ board to approve several new charter schools.
“You do have the money,” Lewis said of the district. “You have to choose to use it. It’s a difference between not having the money, [and] having it and not wanting to do it.”
Lewis declined to offer a specific plan for righting the Chicago Teachers’ Pension Fund, which currently has less than half the money it needs to fulfill its long-term obligations. But she did hint at some things she wants to see in a final proposal, which would need approval from state lawmakers.
Lewis called for a restoration of the designated property tax line item that would exclusively fund Chicago teacher pensions. That’s how the system was funded before 1995, when former Mayor Richard M. Daley gained authority over the public schools and that property tax stream was diverted into the district’s main bank account.
And while she said she opposed any changes in benefits for current retirees, Lewis did not rule out changing the benefits of teachers who are still on the job.
“We could have conversations about that,” she said. “We could have significant conversations about that. But there are ways to not have to do that.”
But currently, there aren’t any conversations between the union and the Emanuel administration, according to Lewis.
“We haven’t been in negotiations for a while because the person who actually is in charge doesn’t wanna be in negotiations,” she said, referring to the mayor. “He wants a bill.”
The district’s most recent offer included eliminating cost-of-living increases for retirees’ benefits and cutting the amount of money contributed to each teacher’s pension by about a third, according to the union.
A CPS spokesman declined to talk specifics about the district’s proposals.
"For the last two years, the District has been working to reach an agreement with CTU on meaningful pension reform that protects the retirement security of our teachers while avoiding dramatic cuts to the classroom,” said CPS spokesman Joel Hood. “We have always been willing to sit down for discussions with the CTU.”
Meanwhile, Emanuel budget spokeswoman Kelley Quinn said in an email Friday that the mayor meets regularly with state legislative leaders to discuss the city’s agenda in Springfield, including pensions.
Emanuel and his allies in the state legislature have been emphasizing the need to fix Chicago’s municipal pension crisis, now that state lawmakers finally passed a law addressing the state’s massively underfunded pension systems. On top of the problem with its teachers pensions, City Hall also faces a crisis with its retirement funds for police, firefighters, laborers and municipal workers, which together, face their own nearly $19.5 billion funding shortfall.