CPS layoffs another signal for real reform

Chicago Public Schools, or CPS, officials announced yesterday that the district laid off a group of teachers and other staff. Overall, 1,150 school district employees, composed of 550 teachers and 600 clerical support staff, are being let go by the school district. This round of layoffs comes a year after CPS let go a further...

Chicago Public Schools, or CPS, officials announced yesterday that the district laid off a group of teachers and other staff.

Overall, 1,150 school district employees, composed of 550 teachers and 600 clerical support staff, are being let go by the school district. This round of layoffs comes a year after CPS let go a further 2,000 teachers and administrative staff as part of the district’s school-restructuring plan.

CPS said the layoffs are due to declining school enrollment. That should come as no surprise. Student enrollment in CPS has been in consistent decline, falling by over 80,000 since 2003.

But cost-cutting is another likely reason for the layoffs. CPS is facing a $1 billion budget deficit this year, mostly due to the district’s pension crisis.

The district’s budget woes in turn have been driven by the Chicago Teachers Union’s shortsighted demands for pay increases.  The union extracted those increases from CPS during its weeklong strike in the fall of 2012.

It’s been nearly two years since then – but teachers and CPS staff are still suffering the consequences.

The union’s demands only made a bad financial situation worse, forcing the district to close down schools last year and lay off teachers. Now even more teachers and staff have lost their jobs thanks, in part, to their union.

The city must mend the district’s budget crisis, but it will need something stronger than the feeble “fix” passed for the municipal and laborers pension funds. Fundamental reforms of teacher retirement ages and benefits are needed to make sure teacher retirements are secure.

Right now, CPS teacher benefits are unsustainable.

According to the Commission on Government Forecasting and Accountability, the average salary for a CPS teacher is $69,757. That salary later becomes an extremely generous pension benefit when CPS teachers retire.

The average pension for a recently retired (within the last three years) career teacher (who worked 30 years or more for the city) is $71,717 – that’s more than double the maximum Social Security benefit private sector workers who reach full retirement age can receive ($31,700).[i] On top of that, the average age of retirement for career CPS teachers is 61, six years before Social Security’s full retirement age.

Neither CPS, nor the city nor taxpayers can afford the high costs of these pension benefits. Without serious reform, CPS’s budget deficit will continue to grow and the pension crisis will deepen.

Chicago’s teachers are entitled to every dollar they’ve already earned. But going forward, the city needs to change the way it handles retirements.

The Illinois Policy Institute has created a hybrid retirement plan for Chicago that does just that.