CN Jan 28, 2016

As we post this show we’re hearing that the CTU and CPS may have come to some sort of tentative agreement that could, among other things, avert a teachers’ strike.

On today’s show we talked with CPS finance expert Rod Estvan (Policy Director at Access Chicago) about the whole sweep of thirty years of schools financing. If you’ve ever wondered how we got where we are today, let Rod explain it.

“The first thing we have to accept as citizens of Chicago,” he asserts, “is, our property tax rate for schools is lower than anywhere else in Cook County. That’s a bitter pill.”

That’s been the case here, he says, since before Richard J. Daley.

“If you compare our rate to poor towns like Harvey, Illinois,” he continues, “It’s not even comparable. So we have a lot of money we could raise that way, but there’s real pressure not to raise those taxes – not even to discuss that issue.”

But if it were to happen, he explains, it might open the door for the grand compromise that could be on the horizon. Chicago gets the money it needs for its pension contribution, the poorer suburbs and towns finally get an equitable share of state revenues, and, as Governor Rauner insisted in his State of the State, no community is harmed, meaning wealthier municipalities get to keep their support for their own schools as contributions for poorer municipalities rise.

There are no details yet, but the CTU statement last night seems to indicate that the union might be willing to give up some portion of their “pension pickup” in exchange for job security measures and changes in the teacher evaluation regimen. If that is the case, it would affect teachers financially.

“Oh yeah,” Estvan says, “This would be a real cut to teachers if they take it. And it’s a decision that I think the members of the CTU have to make on how much this will help them keep their jobs.”

There’s been come speculation that both CPS and CTU may have been driven to an agreement because the threat from Governor Rauner to introduce legislation allowing the State to assume control of CPS presents a far more dire scenario.

“Well, the proposal in the Republican bills – there’s one in the House and one in the Senate – has no containment of what that entity that would take over CPS would do. And I think it’s unconstitutional and I’ll tell you why. The Constitution of Illinois requires our state to support public education. It’s in the Constitution. This bill specifically exempted liability from the State of Illinois once a takeover took place. So we have a takeover with no money, with no accountability,” Estvan explains.

We’ve often discussed the pension mess on Chicago Newsroom, and most of our guests have agreed that today’s massive deficits have their origins in the pension-payment “holidays” authorized in the 90’s and beyond. But Estvan, whose academic studies of the system go back much further, adds a different dimension. The Chicago teachers, he says, never merged their pensions with other systems.

“The reason that these teachers kept a separate pension fund, and Chicago was created in I think 1895 and the statewide pension fund for the rest of the state was 1933. And they had a chance at several points to merge, and they didn’t because they didn’t want their funding to be part of the political process,” he asserts.

By “political process,” Estvan is referring to the fact that the teachers’ pension fund had always been a separate line on Chicago tax bills. But that changed in the mid-nineties when Mayor Daley assumed control of the school system.

“Now Daley makes it part of the political process,” Estvan explains. “Everybody approves it. And the most cynical part of this whole thing is that it was a Republican governor and Republican members of the House and Senate that all supported this takeover and a changeover of the money.”

So is a grand compromise possible? Yes, Estvan says, but it’ll cost a lot of money.

“You have to have at least $400 to $500-million in additional revenue. And if you don’t have that there’s going to be losers. And so the question (Senate President) Cullerton asked yesterday after the speech is great if he wants to do this, but if you want to hold harmless all your districts in the State we’re talking a lot of money, and where’s he going to get the money from except from taxes?”

If you’d like a rich history lesson about pension holidays, the Schools Finance Authority, politicization of Chicago’s pension money and lots more, this show is for you.

You can read a full transcript of the discussion HERE: CN transcript Jan 28 2016

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About Ken

Ken's the host of Chicago Newsroom. A former news director, reporter and radio program host, he's also a past Vice President of the Chicago Headline Club.
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