CHICAGO – The Chicago Teachers Union threatened to strike as soon as next month over the school district's plan to phase out its coverage of teachers' pension payments.
Chicago Public Schools, trying to close a $1.1 billion deficit, previously announced the plan to phase out the practice of covering 7% of the teachers' 9% pension payment after the CTU's negotiating team rejected a contract offer early last month. The move would save the financially distressed, junk-rated district about $170 million annually.
The district and CTU are in contract negotiations and based on their status and state requirements a strike could not occur late May if a pact can't be reached. The strike threat escalated Monday when union leaders charged that the pension pickup cancellation violates labor laws because the pension coverage was part of the expired contract and such a violation would allow the district to move up a strike date.
"For them to say 'OK, you can't go on strike but we can make a unilateral term change in employment by way of a 7% pay cut,' we think that's an outrageous violation of the way labor law works, and if they actually go through with it, you can expect our union to prepare for an unfair labor practice strike on April 1," CTU's vice president Jesse Sharkey said Monday at a press conference called to respond to news of CPS layoffs.
CPS notified the CTU of its intent to end the pension pick-up practice in early February, but the district is still in a 30-day waiting period before it can take the step. CPS believes its action would not allow the union to strike to move up a strike.
"CPS and CTU leadership reached an agreement on a contract after months of hard negotiations, and that tentative agreement would have phased out the pension pickup and provided an average raise of 13.5% in the meantime. Our preference is to reach a fair agreement that is in the best interest of our teachers, our students and our city," the district said.
CPS announced 62 layoffs on Monday, including 14 teachers. The layoffs stem from the district's previous announcement that school budgets would be cut by $85 million for the remainder of the fiscal year that runs through June 30. The cuts will save $120 million annually going forward and will come from layoffs, eliminating some vacant positions, reallocating reserve funds, and program shifts.
"Our objective is to secure fair funding for our students, bring Illinois up from last in the country for education funding and work with Springfield [the state capital] to start treating students in poverty fairly, so our students get the education they deserve," CPS chief executive officer Forrest Claypool said in a statement. "These painful cuts are not what we want to do, but they are critical to keeping our school doors open."
CPS previously laid off 227 administrative employees. Cuts and canceling the pension pick-up are key pieces of the district's plan to tackle its $1.1 deficit. The plan also relies on the city's eventual approval for a roughly $200 million property tax levy to help with pension payments.
The district's big budget gamble is its assumption that the state government will provide more funding. CPS has faced a dire cash flow situation this year because its budget relies on a request for $480 million of state help that has gone nowhere with state leaders locked in a state budget impasse. Short-term credit lines and the district's $725 million bond sale, which paid a steep 8.5% yield, will allow the district to stay afloat through the fiscal year, but it needs to line up fiscal 2017 credit lines.
