Chicago City Wire

Chicago City Wire

Wednesday, November 20, 2019

OPINION: How Chicago Stiffed The Rest Of Illinois For Cost Of Its New Teacher Pension Giveaways

By Mark Glennon, Wirepoints | Nov 10, 2019

Glennon
Mark Glennon

Illinoisans outside Chicago may be laughing at the city’s reckless new contract with its teachers, but the real joke is on them.

Why didn’t Chicago Public Schools include higher pension costs resulting from payroll increases in its report on the cost of the new contract with the Chicago Teachers Union? Did they even measure it? If so, there’s no sign they did.

And why did CPS, under the new contract, let teachers accumulate 244 sick days they can put toward an earlier retirement with a full pension?

The answer is simple. Thanks to the new school funding formula passed in 2017, state taxpayers are now shouldering all “normal costs” for CPS pensions. Normal costs are the actual costs accrued each year for pension benefits incurred in that year, which will include the expanded pension costs. The pension impact of the new CTU contract is foisted on the state.

In other words, Chicago might as well have said “Damned if we care what it costs. We’re not the ones paying.”

Yes, Chicagoans are state taxpayers too, but they represent just one-fifth of the state’s population, so the city has effectively passed the buck on most of the increased pension costs under the new contract.

What will this cost? We don’t know because, as mentioned, nobody seems to have bothered to do an estimate. Whatever it is will be in addition to the estimated $1.5 billion direct cost to the city over the term of the new five-year contract.

Private sector companies typically let workers accrue no more than ten sick days. Teachers have no more than 170 work days per year. With 244 sick days, CPS will now let teachers retire a year and a half early and credit that time towards their pensions. Mayor Lori Lightfoot apparently gave the concession away early. According to the Chicago Sun-Times, CPS documents tracking negotiations show that as early as Oct. 25, the city was open to raising the number of sick days that could be banked to 244.

This is another chapter of the perverted effects of letting school districts pass off pension costs to the state. Outside Chicago, the Teachers Retirement System similarly lets school districts give away an obscene number of sick days creditable to pensions — up to two years’ worth. That’s a bad precedent that should have been fixed, not replicated in Chicago.

It’s the same story with spiking. Why wouldn’t school districts spike their teachers’ pensions if somebody else bears the cost? Last year, thanks to union backing, the state cancelled previous reforms that had discouraged teacher spiking.

Illinois is being looted. There’s no end in sight.

– Mark Glennon is founder of Wirepoints.

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