Today I am back to writing about the 3% cap on Illinois teacher salaries.
Frankly, it has not received the kind of attention I think it deserves. The cap was inserted by Democratic Party legislative leaders in the final minutes before the vote by the Illinois legislature on the state budget.
As I have thought about it and talked about it with current teachers and legislators, I think that local union bargaining teams who will be bargaining contracts in the current years are facing a tough situation given the cap on pensionable COLA increases.
As I have explained in earlier posts, any increase over 3% in a cost of living increase will result in a huge penalty for any board of education that agrees to it. They will have to pay the actuarial cost of the teachers’ pension.
For some boards it will be a line in the sand.
For the many school districts that are already on the financial watch list, paying the actuarial cost of an increase over 3% will be a challenge to their already stretched-thin budgets.
1. It is likely that inflation will likely be at 3% for the next few years. With a 3% cap, teacher compensation will remain flat.
2. A cap on pensionable increases is a back door pension diminishment. Teacher earnings today directly impact retirement income. Illinois teachers hired after January 1, 2011 are already in a separate pension tier which will likely have them facing a pension far less than current retirees.
3. How will bargaining teams deal with the cost of teacher step increases and cost of living increases which when combined will necessarily have to be less than the 3% cap?
In a district with a huge number of steps in their salary schedule it will be difficult if not impossible to keep step increases plus cost of living increases under the 3% cap.
It is a gift to those districts that have been trying for years to get rid of stepped salary schedules. It will make it difficult for local bargaining teams to hold on to those schedules.
Why is holding on to a salary schedule important? Because the step increases remain in place from contract to contract. They don’t have to be renegotiated. Only the COLA needs to be bargained.
These are complicated issues that local bargaining teams will be facing, no thanks to the Democrats and Republicans who allowed for the 3% cap to be inserted into the budget bill.
The argument that something had to be offered in order to get Republican support for a budget will cause many teachers to wonder why it is teachers that are so often being the something that is offered.