Skip to comments.Chicago School Leaders Don’t Know How They’re Going to Pay for the New Contract!
Posted on 09/22/2012 6:40:08 AM PDT by Kaslin
The successful business leaders that sit on the Chicago Board of Education must have checked their brains at the door when they went into the negotiating room with the teachers union. How else could they possibly negotiate a contract that the school district cant possibly afford?
Truth be told, if board member Penny Pritzkers Hyatt Hotels operated that way, theyd be out of business. But, alas, this is government. They strike deals with unions and figure out how taxpayers will fund it later.
Reuters tells us:
Chicago public school teachers returned to their classrooms on Wednesday but thorny questions remained over how Mayor Rahm Emanuel and the cash-strapped school system will pay for the tentative contract that ended a strike of more than a week.
The three-year contract, which has an option for a fourth year and which awaits a ratification vote by the 29,000-member Chicago Teachers Union, calls for an average 17.6 percent pay raise over four years and some benefit improvements.
Average teacher pay is now about $76,000 a year, according to the district, which pegged the annual cost of the new contract at $74 million a year, or $295 million over four years.
The $5.16 billion fiscal 2013 budget approved by Chicago Board of Education last month closed a $665 million deficit by draining reserves and levying property taxes at a maximum rate, while also slashing administrative and operational spending.
Lets see: historically high pay, depleted reserves, maxed-out tax rates so what does the board negotiate? A 17.6 percent raise and benefit improvements! Hyatt Hotels may go bankrupt operating that way, but this is government!
The likeliest solution would be to slim down the district, which would directly impact the Chicago Teachers Unions dues intake. The district will most likely lay off teachers to cut costs and make up for the loss of student enrollment.
The districts financial problems are compounded by the fact that its credit rating was recently downgraded, making it more expensive for the district to borrow money. The districts draining of its reserves, huge pension costs and labor fight were blamed for that development.
The unions strike accomplished precisely what it set out to do: get a sweetheart deal from a scared school board that checked its business brains at the door. Thats no way to run government and certainly no way to run schools.
then why did they settle? unions had prices us and themselves out of the market.
aparently Rahmbo doesn’t plan to be around in 3 years when the bill has to be paid
raise those property taxes again- who wouldn’t want to live in Chicago and send their kids to the CPS!
Stupid headline. Stupid premise. Of COURSE they know how to pay for it. Or rather they know who besides them are going to pay for it.
A shrinking student population and a big fat teachers union contract in a state that dramatically raised taxes and is broke. What could possibly go wrong?
PRITZKER’S WENT TO PRIVATE SCHOOL. NO SURPRISE.
What does SHE care where the school money is coming from.....her stash comes from a hotel chain and Obama's stash comes from Heaven itself, untouched by human hands.
Thanks for making me laugh, because I have been in a bad mood for a long time! Here in Springfield, retired state employee acquaintances who have retired before age 60, are grousing about the possibility of having to pay more for their state retirement health care. I used to ascribe to the tenet that if a state worker was promised something, the state should fulfill that requirement. After living down here for a few years, I realize that these workers a) knew that they had a unsustainable deal and b) that they should have planned for it. Morons.
Raise taxes on everything.
Pritzker has problems with the unions at her hotels.
The Pritzkers I knew in Penny’s generation went to private elementary, but to New Trier for HS. The kids got a say for HS.
The children of that cohort that I knew, went to Waldorf for elementary and public HS (not in Chicago, but, obviously in very nice areas). Again, the kids had a say.
That is, in general, true. One of the foundations of a civilized society is the respect for contracts. Where would we be if an employer promised a worker $100 for a day's work, then was allowed to pay him just $75 at day's end?
That being said, the current public employee payment system is simply not sustainable. Perhaps each state needs some sort of limited bankruptcy option, which would allow for a limited reset of salaries.
But I'm guessing that things would have to get much worse for that to happen. Politicians today just won't risk losing votes to do it. Easier to kick the can down the road a bit.
Amazing - they had the unions cutting back on requests, effectively putting their backs against the wall, and they turn around and sweeten the deal above the original demands. Lunacy on display.
Exactly....I'm sure that was a mitigating factor when they approved the contract...
They will hold the american taxpayer hostage...by eventually telling Congress Illinois will have to declare bankruptcy...if they don't pony up...
Personally, we need to see states fail to get their spending in line...
Cut workers, supplies, books, and turn off the heat and lights to the buildings.
aparently Rahmbo doesnt plan to be around in 3 years when the bill has to be paid
What, he’s going to run for POTUS?
I live in Illinois and I couldn't possibly agree with you more! In the last 5 years my property taxes have doubled to over $9k/year on my home, and my income taxes doubled last year under the third corrupt governor in a row, Pat Quinn.
All told, I paid $57,962 in State Taxes (income, property tax) and all Federal taxes in 2011. I'm far from "rich" and these taxes are killing me. Yet, there are some who say I don't pay enough (while they pay NONE) and I should pay more?!
I can't stand it anymore.
They are all heading towards gambling and there will be quite a bit of sausage grinding to be done to cut that bill. Hello, Madigan!
I thought there were Pritzkers that went to Latin.
The WSJ ran a piece about the rumors of Illinois asking for a FEDgov bailout.
They are all heading towards gambling and there will be quite a bit of sausage grinding to be done to cut that bill. Hello, Madigan!
Zerohedge piece that references the WSJ article.
I can't stand it anymore.”
That would be one way and it's possible, but I'm betting on regionalization.Starting with the schools, the wealthy and well to do burbs will be absorbed into the Chicago govt district. By the end of this contract all Cook County school districts will be part of the Chicago school district for tax and spending purposes. The real progressive desire would be to bus the poor into the burbs and the white kids back to Chi. That will cause revolution, but limiting the control to money raised and spent will accomplish the redistribution the progs want.
All I can say is: eat your peas.../ S
All kidding aside, I live in Tampa Florida and my property tax is 2.2 K a year and I live in a nice 25 year old 2400 sq ft home with a in ground pool...
How you put up with that level of taxation I will never understand...
Here in Florida we would vote every bastard out...
the Rahmster -and nobody else anywhere near this “Chicago Shakedown” merely hasn't the bal%& to publicly state so...
that was the whole purpose of this strike right before Obama leaves office (hopefully!!) was to get We the People on the hook for their fantasy contract.
Believe me when I tell you I've been looking for a job OUTSIDE of Illinois for over a year now. Unfortunately for me, I'm 50 years old working in a "young man's" field these days which makes that task even harder....
I see this points, and I agree with the premise of unsustainability, but I'm irritated quite a bit about what's happening and so my rant just comes on automatically...:
This respect for the contract should go out the window when it turns out that the whole idea is founded on receiving taxes to pay for it, and the unions help elect the people who negotiate for the gov't. There's too much conflict of interest to make it a fair contract. We probably ought to demand that such deals, sweetheart or otherwise, be founded on annuities that are funded up front, and under the joint governance by the union and the gov't, with no future obligation of indenture for future generations of taxpayers.
Of course some gov'ts will just float bonds to keep the whole scheme working. That's fine as long as the risk is not subsidized. That means the bond must be honestly contracted with actual risk associated with how it's funded. For example a bond founded on the repayment by sales tax at a certain rate must only be paid by the identified sales tax, not indefinitely, and if the tax flounders then too bad for the bondholders, not too bad for the taxpayers. As it stands right now a whole lot of risk is completely subsidized on the backs of future generations, and that's reason enough to say these are dishonest contracts.
Dishonest contracts made with the government should be dishonored.
The Illinois budgets are expecting a federal guarantee of state borrowing under a 2nd Obama term.
Gov Quinn let this slip earlier in the week. I suspect Calif is similar.
They DON”T CARE how it’s paid for!
They got theirs and THAT is ALL UNIONS care about.
This kind of behavior is ingrained everywhere. I served on a big city marathon committee that was a public/private partnership. We kept losing money, and each year I would say, “This thing is going down and going away” and each year the governor’s (Dem) office would sneak funding in from somewhere and keep it going. I’m off the committe now but they still put the thing on every year and I’m sure it’s never paid for itself yet.
“But it’s a showcase!”
Blood in the streets before New Trier, Glenbrook (my HS), Glenbard, Hinsdale and a few others go the equalization route!
IIRC Michigan went that way a few years back.
Did any test scores change?
Truth be told, the public would realize these board members like Pritzker allow the unions to write their own ticket and in return, the unions give Pritzker and others, breaks when negotiating contracts of their employees.
In essence, the public picks up the tab of the savings in labor contracts for the board member's businesses.
I actually think that's the key point. And I would define as "dishonest" any contract that does not have a solid current source of revenue behind it. Future promises and revenue hopes don't count.
The teachers will just shake the kids down for their allowance money
like they shake the parents down for their rent money.
If I’m not mistaken, PP was also a bundler of below the reportable individual amount, (mostly from foreign contributors it was suspected) to BHO 2008.
its not enough they have the cream of the crop health care, insane summer vacations, every weekend off, every holiday off, along with Christmas break and an extra day with Thanksgiving, and spring break....
this is why people are turned off by teachers.....they don't teach...
Nothing to do with test scores. It’s about redistribution of wealth. The idea was first fostered about 35-40 years ago with the concept of Megalopolis, then defined as the unbroken urban/suburban areas from D.C. to Boston. The 60s saw white flight and the growth of the burbs and urban problems too great for the financial resources of cities. Regionalization, starting with school systems, done through federal judicial fiat (see Yonkers and Judge Sand) would be a starting point, followed by the creation of area school districts and the dissolution of local suburban districts. Other areas of govt would follow in this expansion of power over local communities.
Two things brought it to a halt. One was the potential for violent opposition(see Boston busing)because of a variety of reasons, racism, fear of crime,desire to control your kids’ education, desire not to return to the control of the machine you left by moving out and two, was the Black power movement which sought to give black neighborhoods and communities control over their schools and other operations of city govt due to a belief that such govt being white controlled was either racist or unconcerned with problems in black communities. .( see Altschuler Community Control, 1970)
But if you read the goals of the Progressive Chicago machine Obama springs from you will see that regionalization and redistribution are promine In the late 60s and early 70s it was hoped local/state Progressive politics could persuade voters to accept this readjustment of govt boundaries, but now they see the control of the federal courts and bureaucracy as an opportunity to return to these goals.
a guy called into Dave Ramsey the other day...his teacher wife is going to be getting $3800 a month...and he wanted to know the best way to gouge the system even more....
“...how they’re going to pay for the new contract.”
Darn the taxpayers!!! More taxes ahead!!! (For the children you know.)
There are a lot of them, so I am sure some went to private schools. Not all are in the Chicago area. Also, my contacts are now grandparents and I am no longer friends with them, due to politics. Things were different in the 60s/70s and even in the 80s, especially in more affluent areas.
You’re right. It is just very frustrating to see perfectly healthy 55 year olds retired, having two homes, tennis membership, new SUVs, and complaining about contributing more to their healthcare!
The fellow citizens will pay these extortionist goons.
“Chicago School Leaders Dont Know How Theyre Going to Pay for the New Contract!”
Here’s my two cents: Cut everything that is not mandated by law. All sports, music, clubs, extracurricular activites, everything but the core subjects. Lock the doors after the last bell. That’ll make a few teachers redundant who can then be let go. Then start on the admin staff.