A Chicago taxpayer talks about the possible teacher strike.



I have a lot of friends across the country, and something is about to happen in Chicago that will get national attention: a strike in our public school system. This likely will be brought up by Trump or Clinton at some point. The circumstances that got us to another teachers’strike are complex. Before someone highjacks the issue on the national stage, I thought it’d be worth a relatively short explanation. So, if you like to be informed, read on:

One part of the break between the teachers and the city is about pension payments. About 25 years ago, the city made a deal with the teachers to pay a much larger chunk of their shared pension costs in lieu of a raise. The pension is a critical part of the pay package for a teacher in Chicago, since the city doesn’t pay into Social Security — so the teachers don’t get that — and there is no 401k savings through the city, like you’d have at most large companies. The pension is what the teachers will have to retire on, unless they’ve been able to save in an IRA out of their own pocket. Teachers in Chicago aren’t rich…I make more at my truck driving job, even after a huge decrease in hours the last 18 months, than about 90% of the teachers. Teaching is a solid middle-class living. So the teachers’ union isn’t soaking the city in some kind of unfair deal. There are many details I’m leaving out, but this post will be long enough…

The city, being Chicago, skipped so many payments into the pension for so many years, and it’s required by law to have a certain level of funding for the pension, that now the city can’t catch up without massive cuts or taxes. So they want to make the teachers pay much more into their pension, essentially taking away the one way teachers can retire safely. The city’s financial mismanagement is now the teachers’ problem, and the city wants to guilt them into giving more to their pension, without any additional benefit. It’s not the teachers’ fault the city blew this, and it’s not the teachers’ problem to fix. Especially because:

Chicago is broke on purpose. We have the money to fund pretty much whatever we want, but we hide it. The main scheme? The Tax Increment Financing fund, or TIF. This plan hatched way back in 1977 works like this: the city sets up a zone, a TIF district, in a “blighted” neighborhood, and within those boundaries any property tax increase for 23 YEARS IN THAT ZONE goes into a fund controlled by the mayor. Example: your property taxes are $5000 this year. In two years, they go up to $5700. The $700 increase goes into the TIF fund. And in 23 years, if you’re paying $15,000 in taxes, $10,000 goes into the TIF fund. The money in the TIF fund is supposed to be used to help poor neighborhoods in the city, and TIF zones are supposed to only be in poor neighborhoods.

But you know what happens? The city creates TIF zones all over the place, like freaking DOWNTOWN. There is no precise law saying that the money taken out of a poor neighborhood has to be used in that neighborhood. So, neighborhoods like Englewood, a very poor black neighborhood, get about $0.15 on the dollar back TIF investment in their neighborhoods. The rest is spent however the mayor wants. The money in the TIF fund is not in the city’s general budget, it’s reported in a very complicated way, so that it takes a local private citizen who is motivated (God bless him) some months to add up how much is really in this fund.

It’s a little over $1 billion.

Also realize that when you’re taking property tax increases and shifting the surplus into a fund, instead of where it usually goes, all those other governmental services suffer. So, the schools get almost exactly 50% of our property taxes, and that’s how we fund our schools. The parks get a share, and so on. When there are over 100 TIF districts (!!!) in the city, that means all the property tax increases for DECADES are not going to where they need to go, like schools and parks and anything else a city pays for. It goes into the TIF slush fund.

So we have in Chicago more than $1 billion, off the books, to use however the mayor wants. But this money — if the schools get 50%, at least $500 million — should have gone to paying for things we need. Chicago is broke on purpose. It’s like having a huge secret savings account, but not using it to pay your bills when you run out of money in checking. So you declare bankruptcy and stiff your creditors, but you still have all this secret money.

— The last point is crime and schools, and where they intersect. The violent crime rate in Chicago started going up when Rahm closed 50 public schools four years ago. Though declining enrollment was the stated reason, the real reason was the city wanted to replace the union public schools with charter schools. Rahm’s campaign manager for his first run in 2010 was the president of of a huge local charter school chain.

Charter schools can keep up to 25% of their funding as profit, i.e. “overhead.” They can also pay teachers much less money for longer hours, hide their finances because they’re “privately run public entities,” and kick out all the bad kids to the public schools. Look up John Oliver for his takedown of charters, but for our purposes, the city closed all these schools, almost all in poor black neighborhoods, then almost immediately announced we need a whole bunch of charter schools. In fact, on the day they announced the school closings, our alderman (O’Connor!) scheduled a neighborhood meeting (which everyone found out about by accident, they “forgot” to tell us in time, even though it’s the law) about a charter school he wanted to open in our neighborhood where he just announced the local public school was closing! This didn’t go well with the neighborhood, he backed off.

But that’s what Chicago is like with schools.

All those jobs lost, and all those safe spaces in bad neighborhoods we lost, when the schools were closed, is why we have out of control crime here.

— Finally, the backdrop of the election: Both candidates would do the same thing Rahm tried, closing public schools in favor of “choice,” which is code for breaking the union. But Rahm is a Democrat, and a long time Clinton friend and political ally. A bad strike here will make Clinton look worse, and also ruin Rahm’s chances to be a senior advisor in the White House, his getaway plan. So the stakes are high.

I’m not even getting into how the Rauner, and thus Rahm, want to tie teachers’ pay to test results, which would be fine for the few schools that have happy healthy kids from good families with good income as the main student body, not so good for 90% of the rest of the public school teachers.

My wife and I are with the teachers on this one. We can solve many of our money problems in Chicago by using our secret TIF money. We have to pay the teachers what was promised them, our word shouldn’t just be good to other countries.

Chicago friends, correct me where I’ve missed something or got it wrong. And if you want to share this, go for it.

-Abused Chicago Taxpayer

35 thoughts on “A Chicago taxpayer talks about the possible teacher strike.

  1. Much of what is said is probably right, but why do we conclude choice is bad.
    Some believe choice is the American way. not monopolistic control by one entity. Why not in education.
    Feelings about unions have nothing to do with it, it’s common sense.

    You did not mention the fact that when union money goes to a candidate the union negotiates with that candidate. I guess that is the American way to.


      1. Fred, from what you’ve said here, you really don’t actually understand what a TIF is or how it works…

      2. Anonymous,
        From what you’ve said here you don’t understand bylines. I didn’t write the post. But, hey. Keep in touch.

  2. I highly doubt this is a well researched statement…..” I make more at my truck driving job, even after a huge decrease in hours the last 18 months, than about 90% of the teachers.”. The average salary for a CPS teacher is $75K a year (depending on who you ask it is either the highest or the second highest teacher salary for large school districts in the US). According to CNN…..”The median annual wage for a trucker that works for a private fleet, such as a truck driver employed by Walmart, is $73,000, according to ATA. The Labor Department pegs the median annual salary for all truck drivers at around $40,000.” So the average salary for a teacher dwarfs that of the average salary for all truck drivers and is slightly higher than that of private fleet drivers. Then you have the fact that teachers pay 2% of their salary towards retirement because the city picks up the other 7% they were supposed to pay. The average teacher contributes $133K to their pension fund while reaping over $2M of benefits in retirement. Contrast that with the fact that a private sector employee who would need to contribute $1.4M to their own retirement to reap such a benefit.

    1. Dear “mainly confused”. He didn’t compare truck drivers to teachers. His statement was well-rearched since he was talking about himself. What you don’t say is that 95% of those who start careers as teachers collect no pension since they don’t last that long.

      1. Thank you Mr. Klonsky for your above explanation and the ones further down. I will offer my own, albeit anecdotal, evidence. I have been teaching for 25 years. I have an MA in Curriculum and Instruction from DePaul. In addition I have additional graduate credits for reading specialization and ESL/bilingual. If I had stayed in the corporate world and had this much experience and education, I’d be making six figures. I am not. I do not even make enough to afford to live in this city and provide for my kids. Good thing my spouse has a job, too. As for that cushy pension, I’ll be lucky if there is anything in there when I hit 55 as mismanaged as it’s been. We go into education to make a difference, not to stick it to the taxpayers.

    2. I have been a teacher for CPS for 8 years and I do not make that salary. I have 20 years experience, however, CPS does not pay for more than 2 years experience, so I am a ten year teacher. There are a few of us out there, along with the new ones who choose to join education. However the rates that many quote are high for two reasons, one they quote with the pension cost included to show that as salary. Please note that in their figures for the upcoming raise, they do not think we should count the lost of a pension pick up as a cut in pay. Any way you look at it, I would lose 7% of my income. The second is there are many experienced teachers with CPS. One would expect someone with 20 years experience in their field with a Bachelor’s and a Master’s Degree along with many hours of continuing education to make $75,000 a year. In addition, when you make comparisons, they need to be apples to apples. Chicago is a very expensive city to live in, as we all know. In order to find a home here, that I am mandated to do by my employer, my salary should at the least allow me to do so, don’t you think?

    3. You’re missing the point that teachers were promised money going into their pension in lieu of a raise years ago. While it’s a nice perk to have the city contribute to a pension, in this case, it isn’t a perk, but part of the contract years back. The city broke that contract.

    4. dicksonmatt: See the article. Private sector employees contribute to their own retirement where teachers don’t. It’s called Social Security. How many thousands of dollars over the course of a career?

      1. And private employees also get back more because employers contribute to SS. Before 401(k)s became popular, this was the original “matching contribution”. I’m not surprised if teachers view the 7% pickup as partial compensation (no pun intended) for the government NOT paying its share for so long.

    5. Look at the average age of a Cps teacher. It takes a lot of years of blood, sweat, and tears to even make that much. We don’t get paid for staying after school for hours at a time, or for showing up early to help those students in need. It will take me ten more years to get to that 75,000 salary and I have been many years under my belt. I haven’t had a raise since the last contract, despite the fact I paid for another certificate to stay current with my craft and best educate my students. Until everyone is educated on all of the facts, one should not speak on behalf of either side.

  3. The biggest issue is the /contribution/ to the pension fund.
    Yes, teachers deserve pensions, but ones they love you for.
    You conveniently omit the fact that teachers pay 2% of their required contribution. The taxpayers, such as yourself, pay 9% PLUS an additional 7% into the teachers pension plan.

    Teachers should get raises when/if they deserve them. But they should also contribute their full amount to their own pensions

    1. Let me explain the way contracts work. Whether or not you think a teacher deserves a pension, the state is constitutionally and contractually obligated to pay it. It is not a tip you give for what you consider good service. Since the 7% board pickup of pension payments was in lieu of salary, if the board wants to bargain a new deal then teachers are right to say it must be accounted for in a new salary schedule. Contracts are negotiated on behalf of the members of the union. Whether you think an individual teacher deserves a raise is not how contracts work. That is an issue for bargaining.

      1. What the hell is all this 7% pension pickup discussion about ? Since the board did not pay into the pension fund for 20 years ,it never was paid to the pension fund.

      2. Exactly Bob. But if the board’s demand that teachers pay the 7%, it will result in a reduction in compensation because then the contribution will be paid. The irony, right?

    2. Exactly! Well said that’s why the pension will fail it will never be properly funded. Then add to that the declining population in Chicago, so less schools/teachers needed. Have they cut too many I don’t know but either way there are now even fewer teachers contributing….it’s only a part of time before the whole thing collapses.

    3. When and if they deserve them? If teachers are staying in CPS year after year they deserve the raise. We have rigorous evaluation systems now, so if a teacher is not doing their job they are not slipping through the cracks.

    4. ALL of us are taxpayers, especially knowing Chicago teachers must live in the city. School is PUBLIC, it is funded through taxes, that has earned all of us the privilege of sending our children to school tuition free. Taxes pay for all of this, always has. This is the same pot that pays teacher salary and benefits, no matter how you break it down. Are you confused, uninformed or both?

    5. I am sure that now given the chance any teacher or public servant would love the chance to ditch the chicago pension for social security… but part of that deal for the city (I surmise) is that the city isn’t paying federal payroll tax on its servants, which probably amounts to more than 7% salary. The problem is we have 40, 45, 50, 55 year olds who for better or worse believe(d) in the promise of the pension in their contracts. For some of them any change is disastrously close to retirement age. Chicago is rewarding its most critical fabric with a future of potential poverty. It’s a disgrace.


    Oct. 3, 2016

    CONTACT: Steven Ashby, 630-697-8694, Erica Clark, 773-851-6287

    Chicago parent, community groups support teachers in contract fight, ramp up pressure on mayor with weekly call in campaign

    CHICAGO—Mayor Rahm Emmanuel is hoping the school budget crisis will drive a wedge between Chicago and its teachers, but a city-wide coalition of parent and community organizations is heading to City Hall Tuesday to prove him wrong and ramp up pressure on the mayor for a fair teachers contract.

    The newly formed Chicago Teachers Solidarity Campaign will hold a press conference and deliver the mayor a letter signed by some 50 parent and community organizations supporting the Chicago Teachers Union (CTU) decision to strike next week if the city doesn’t agree to a fair contract by then.

    The groups will announce a city-wide call in campaign, targeted at city hall, beginning Wednesday. Parents and other Chicagoans committed to our public school teachers are being urged to flood the mayor’s office with calls every Wednesday until a new teachers contract is reached.

    WHAT: We Stand With Our Teachers, solidarity rally and press conference
    WHEN: 10 a.m., Tuesday, Oct. 4
    WHERE: Chicago City Hall, 121 N. LaSalle, 5th floor
    VISUALS: Signs, banners supporting Chicago teachers

    CPS teachers have been working without a contract since July 1, 2015, and their union has been negotiating in good faith with the district. But the mayor’s handpicked school board continues to demand a pay cut from teachers and refuses to guarantee important classroom improvements.

    Last week the union’s House of Delegates set a strike date of Oct. 11, which means teachers will withhold their labor if no agreement has been reached by then.
    The solidarity committee is calling on the mayor to bargain a fair contract that protects teachers and students in CPS classrooms. But if that doesn’t happen, the group will take to the streets in support of the teachers.


  5. Also I was told they wanted to get rid of classroom size limits, not know what they are in the current contract but if that goes away say good bye to all learning my wife works a Cps and her school has 41 kids in a class. How much learning do you think takes place there?

  6. NOW you know how the police and fire responders feel, Fred. The city reneged on paying into their pensions a long time ago also because city was NOT taking any monies out of their salaries for Social Security. Welcome to the club and good luck with that strike.

  7. We’ve known for years that the city of Chicago and the Board of Education have been playing games with the pension system, taking pension holidays, and in general making promises that everyone knew they couldn’t keep. So why on earth did the union go along with these promises, knowing full well that the city wasn’t living up to its part of the bargain and that these promises could not possibly be paid off in the long run and that a of day of reckoning would surely come? The union knew that a disaster was coming…and yet they went ahead and acted as if there was no tomorrow. Why didn’t the unions FIGHT to get out of the corrupt pension system and switch to IRAs (so the teachers themselves could control their retirement savings) and Social Security ( which has its own problems and impossible promises but at least seems more reliable than the city pension systems)?

    1. Dear ChiGuy,
      Under Social Security, CPS would have to pay about 6.5% each paycheck (no holidays allowed). And the “IRAs” you mention, do you envision CPS would match the first 2% or so, (like most private employers)? CPS would not save anything. There is nothing wrong with the pension system except the money was not paid in, (pension holidays). The corruption is in City Hall and the school board telling teachers “instead of a raise, we will pay 7% into your pension”, with no intention of actually paying the full amount. In numerous years, CPS would take a “pension holiday” and would pay nothing at all into the pension system.

      1. I think we are in complete agreement! The pension system was a fraud upon teachers and taxpayers alike. As YOU said, it appears that the pols had “no intention of actually paying the full amount”, and during “pension holidays” “would pay nothing at all into the pension system”. EXACTLY!!!! So my question is, why did the union put up with what YOU recognize is this corrupt and underfunded system? Why wasn’t the union demanding to get OUT of the system and go to a defined contributions system that didn’t depend on the lying promises of politicians? It’s as though the bureaucrats and the unions were quietly in denial, believing that somehow the day of reckoning would never come.

      2. Because a defined contribution system is not a safe and reliable source for retirement savings. Politicians intentions aside, the courts have ruled that public employee pensions must be paid. And they will be paid. I receive a defined benefit pension and my wife and I saved through tax sheltered annuities. In 2008 I lost a third of the value of my annuities. Had I retired before 2012 and only had my retirement savings as you suggest, I would have been screwed. So, I guess we are not in complete agreement.

  8. In general, teachers are honest, law abiding, and conscientious. The problem is that we believed our elected officials to be the same.

  9. Let’s figure out this whole teacher-and-trucker thing. (The person making the post said he/she makes more driving a truck than 90% of teachers.) We can research the salary level at the 90th percentile for the CPS from the “employee position files” from the CPS’ own website:


    Grab the most recent file (2016), open it in Excel, sort by salary. Then, observe the total number of employees listed (39,768), and compute 90% of that (35,791). That gives us the break point of salaries for 90% of teachers. That salary is $91,404, not including paid benefits. I have no idea how that compares to the salaries of truckers.

  10. Thank you, Fred, for this detailed explanation. Most people in our society value and respect teachers for their valuable contribution to our society. Most of the negative comments on this site can be attributed to paid union busters.

  11. All agree it is a ferschlugginer mess. There seems to be a large degree of consensus on this site as to the cause of the mess. Apart from diverting TIF funds, there aren’t many solutions suggested other than repeated observations teachers shouldn’t have to pay for it — understanding, of course, that the active teachers must live and pay taxes in Chicago. Are there no think-tanks, consultants or politicians able to articulate a solution that could be endorsed by political leaders and voted in through a democratic process? Alterntatively, is bankruptcy inevitable and the endless indignation is simply part of the bargaining process for a better judicial outcome? A perfect solution is the enemy of a good solution. What is the result if there is no solution?

  12. The teachers don’t get Social Security…..true! However, neither do the firemen or the policemen and they paid their required amount into their pensions.

    1. Teachers pay into the CTPF the required amount. 2% through a direct contribution. 7% through an indirect contribution that the board pays in lieu of an earlier pay raise. It is the CPS board that has not made their required payment.

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