Illinois Policy Institute Executive Vice President Kristina Rasmussen had this opinion piece published in the Champaign News-Gazette.
Chicago city bosses may soon ask you to help pay for the double-digit raises Chicago Public Schools just granted to the Chicago Teachers Union.
How? By having state taxpayers pick up the employer share of Chicago teacher pension costs – much as the state already does for downstate teacher pensions. A question on the Chicago ballot asked local voters to weigh in on the matter, and they voted more than 76 percent in favor of the state covering the cost.
Even though it’s an advisory measure that’s more of a public opinion gauge than a binding mandate to act, we should take notice. Proponents believe the funding could help bail out CPS’ projected $1 billion deficit for next year.
Don’t like the thought of sending hundreds of millions in additional dollars to Chicago? This is exactly why the idea of local pension accountability reform – sometimes called a pension shift – is so important.
The simple truth: As long as the state picks up the employer share of downstate teacher pensions, Chicago will push to get the same treatment.
In 2011, the state paid approximately $800 million for downstate and suburban teacher pension benefit accruals. That’s not chump change. Chicago wants in on the deal, even as they continue to milk other education funding formulas.
Instead of asking the state to pick up Chicago’s share, voters should demand that the state quit picking up the downstate employer share. It’s time everyone got off this gravy train.
But it’s important to get the details right. During the summer my organization hosted eight policy forums on this issue across the state, and we heard a lot of frustration from taxpayers who feel like they’ll be left out to dry.
As a downstater myself, I believe we can properly implement local pension accountability. Here’s what that entails.
One, we must allocate savings from local pension accountability implementation to tax relief. Remember how the 2011 income tax hike was supposed to be temporary? Dedicating this money to repeal will help politicians keep their sunset promises to all of us.
Two, school districts should have greater flexibility to operate efficiently and lower their costs. Localities should be able to opt out of onerous state mandates in order to focus funds on students.
Three, the practice of teacher pickups must end. Teachers in two-thirds of Illinois school districts pay little to nothing toward their own retirement. In Champaign CUSD 4, a new contract has the district continuing to pick up the employee share of pension contributions, siphoning $4.7 million from classrooms. In Chicago, the district picks up 7 percent of the teacher share. This cannot continue. CUSD 4 could actually save money by ending teacher pickups while absorbing employer-share of teacher pension costs from the state.
Four, pairing local pension accountability with a stronger property tax cap – an idea we heard on the debate tour – is also a welcome safeguard.
Five, teacher pension benefits must be right-sized for future service. Without real reform, pensions will continue to crowd out funding for education. And the longer we delay, the worse our pension debt crisis will become. Only major reforms, like those heavily centered on defined-contribution plans and that tackle automatic cost-of-living adjustments, can get the problem under control.
And finally, we need to engage in a new dialogue about education financing in Illinois. With all of the shell games played with our tax dollars, it’s hard to know who’s coming out ahead and who’s getting the short end of the stick. Setting up a system in which money follows the child is our best bet moving forward.
The bottom line is that your income, sales and property taxes are high enough. Chicago’s worsening mess and inability to get its affairs in order shouldn’t become your burden.
The best way for downstate residents to stop a massive new influx of state dollars into Chicago’s failing school system is to pre-empt bailout demands with local pension accountability reforms and an education financing overhaul that applies statewide.
You may not have been able to vote on the Chicago ballot measure this past Tuesday, but you can register your opinion by asking your state legislators to support local pension accountability – provided it is done right.