Game on: Lightfoot versus Chicago Teachers Union

In what seems to be a game of chicken between the newly inaugurated Chicago Mayor Lori Lightfoot, and the Chicago Teachers Union, the latter is threatening a strike if they don’t get what they want, not the $300 million, 14 percent salary increase, over five years, in a proposed contract, that is currently being negotiated, but wants instead a 5 percent, per year increase.

The last strike, in 2012, garnered national headlines and celebrity support, but also put former Mayor Rahm Emanuel on the ropes, and, getting off, cost him a lot of political capital.

Lightfoot, who was not the CTU’s favored candidate, in the recent mayoral election, faces payback time for winning in a landslide victory that totally eclipsed their favored candidate, Cook County Board President Toni Preckwinkle.

The news comes with CTU criticism of the interim school board, and not an immediate elected school board, that they sought, despite the fact that the diversity of its members and their record are laudable.

Adding to the ire between the two was a commissioned poll, from the group, and for Children, that in March, showed a victory for Lightfoot, “to finish first among 14 candidates vying to replace” Emanuel, which  CTU Vice President Stacy Davis Gates called “trash.”

Sharp rhetoric is not unknown in Chicago politics, but this time, on the backdrop of a weakened city finances, with the historic election of a black woman, in a city with nearly a 35 percent black majority, adds another dimension to an already burdened financial future.

Tip O'Neill's famous quote that “all politics are local” might encapsulate Chicago as it tries to hit the reset button on how things are done, or in the case of the recent past, not done.

With a deficit over $700 million, as we have noted before, Lightfoot’s stance that this is a fair offer, stands in direct contrast to what CTU says:

“The mayor’s offer not only falls far short of the 5%-per-year the CTU has demanded but, [President] Sharkey argued, when increased health insurance costs are factored in, it’s more like an 11.7% pay raise over five years,” reported the Chicago Sun Times.

 “This is not good enough. ... The wage offer is anemic. It’s weak. It’s less than we’re expecting. Combine it with the fact that we haven’t heard anything else about the other pieces, it paints a picture where we really have not gotten a serious response to the important issues we’re raising,” Sharkey said.

“. . . the union complains the offer is really only 12.5 percent after increased employee payments for health insurance are factored in,” noted Crain's Chicago Business.

So what does the union want? Five percent annual raises—which would amount to a pay increase of about 27 percent after compounding if granted over the same five-year period.

Sharkey  also issued a threat, "Candidate Lightfoot has vowed there will be no teachers strike on her watch. Mayor Lightfoot has a month to make good on that and her campaign promises."

Irony comes into the picture, with a firmer financial footing, than before, although not perfect, and coming from high borrowing costs from Emanuel’s effort and a one-time check from the controversial and what some historically have called, a slush fund, but was acknowledged at the time, was not an end, but a band aid.

“In 2012, Emanuel’s bullying missteps provoked a seven-day strike that was Chicago’s first in 25 years. Four years later, he avoided another strike, only after using an $87.5 million tax-increment-financing surplus that the mayor’s own City Council floor leader acknowledged was “not sustainable,” according to the Sun-Times.

What is widely acknowledged if Sharkey gets his way, the city suffers at the expense of solvency as it tackles its mammoth pension deficit.

As the venerable Chicago Tribune opined: “The union is asking for a lot more than wage increases from a hard-pressed school district and hard-pressed taxpayers.”

Added to the list of demands are what have been called “wrap around services” for CPS students, which include more counselors, nurses and librarians, with a price tag, that CTU has not provided, but that Crain’s says sources told them it could be as much as $2.5 billion.

“The Sun-Times reports that the union also wants the creation of 55 “community schools” (each costing $500,000), a moratorium on charter schools and a ban on school closings during the term of the contract”, in addition, said the Tribune.

All in all this is “a mighty big addition to a budget that’s already severely strapped. Yearly structural deficits continue to force the district to borrow to pay day-to-day expenses. The district’s junk-status credit rating translates into high borrowing costs. CPS’ pension fund remains just 48 percent funded and is saddled with $12 billion in unfunded liabilities.”

Lightfoot has said the money from her proposal have come from an increase in the school funding formula, but also $450 million from the Illinois General Assembly’ but should all of the monies be “devoured” from the new contract.

Again, from the Tribune, “In what ways can CPS get more efficient, and in doing so, free up money for a new contract? As unpalatable as it may seem, CPS should face the reality of shrinking enrollment and close more of the district’s underpopulated schools.”

Looking at those numbers, they cited some examples: “Frederick Douglass Academy High School in the West Side’s Austin neighborhood has a capacity for 1,188 students. It’s enrollment for the 2018-19 school year? Sixty-two students, making Douglass just 5 percent enrolled. Manley Career Academy High School in the East Garfield Park neighborhood on the West Side: 83 students, 6 percent enrolled.”

The specter of Lightfoot facing a major embarrassment, early in her tenure, might be tempting for a vengeance move, by the CTU, but “A strike would be devastating. So would reaching an agreement that shoves CPS further into a financial abyss. Either of those outcomes would imperil Chicago, because either would imperil its children.”

Things are getting hotter in the negotiations with the Board as the first day of school looms for students on 3 September, and designated factfinder, and lawyer, Steven Bierig has offered staff raises of 3 percent in the first 3 years and 3.5 in the last 2 years, totaling 5 years in the life of the contract.

Local public radio station, WBEZ noted that the offer “recognizes and respects the offers that we put on the table,” she said of the recommendations.

“Lightfoot also repeated that there is no reason a contract deal can’t be reached and that she has directed her team to make it happen. The union is bashing Bierig’s recommendations in a letter to its members, although CTU President Jesse Sharkey said earlier this week that there was some progress being made in negotiations.

Bierig’s recommendations are not binding and the city or CTU can reject them. Fact finding is a mandated step before a strike.  

In a school system with 500 schools the challenges are plentiful, but the fact remains that Chicago faces as its number one problem, a pension deficit that has harnessed the city in its offer to the teachers, but the Union has said that the offer is unsatisfactory and also that it fails to recognize the female and minority dominated workforce.

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In Sharkey’s letter to members, he writes: “Let me be blunt. CPS' factfinder agrees with the mayor's bargaining team: throw an inadequate wage proposal at educators and literally ignore everything else needed in our school communities to provide our students with a quality education.”

“I think what it shows is that the city has stepped up and made real commitments to teachers and support staff to make sure we are enhancing the educational experience for our young people.” Lightfoot said of the report during a press conference Friday, as reported by local public television WTTW.

In a clarion call to members, he noted, and bringing up the justice issue: “This report does nothing but codify inequitable and unjust school policy,” CTU President Jesse Sharkey said in an emailed statement to union members.

While it’s true that the so-called, “wraparound service” for increased nurses, and social workers are needed, it’s also been thought that these, as noted, can be negotiated items that still preserve the need for needs outside of teaching skills; and, not to mention class sizes and staffing ratios.

Also at stake are the need for paraprofessionals to be paid a just wage and that some reports have said that some are making less than $31,980; yet taking into account a budget that needs more, not less, as well as the shortfall of $141 million, then the offer from the Board is sensible, if not ideal.

“Teachers say Chicago is lagging behind the other six largest unionized school districts in the country, which have seen average COLA increases of 19% from 2010-11 to 2018-19. CPS has seen just a 12% salary increase during that time. Since 2011, CTU claims the average union member has seen COLA increases of just 1.44%, which they say is “well below the rate of inflation.”

“Dick Simpson, a former alderman and political scientist at the University of Illinois at Chicago who endorsed Lightfoot, sees the administration’s hardball approach as a “negotiating tactic” that “stems mostly from the Rahm Emanuel period." He hopes things will change once Lightfoot herself switches gears from the ethics reform work she has prioritized so far and gets more involved in the negotiations.

“There just isn’t enough money to do things that you might have agreed to,” Simpson added, in an interview with Salon.com; and  “The issue is going to be: Can they find a compromise position that recognizes the financial limits but at the same time makes the teachers feel valued and that they’re getting some financial help from the system?”

Kency Nittler, of the National Council on Teacher Quality, a nonpartisan policy and its research center.teacher policy director, said, “Chicago teachers in comparison to other teachers in large districts are being paid relatively well, " reported Chalkbeat.

"She said that the district’s offer to teachers is solid, and not outside the bounds of what districts regularly offer in negotiations. 

Nittler added that, in a difficult work environment, raises may not be enough to retain teachers. That echoes the argument the Chicago Teachers Union has been making in calling for smaller class sizes and more support staff, such as nurses, social workers, and special education case managers."

“Those (calls) are coming from a place of ‘your salary alone is not enough,’” she added. 

Coming on the heels of the fact finder, the CTU has rejected the city's offer and is prepared to strike, although some see this as not occurring before the end of September, or in October, at the latest, and just in time to embarrass Lightfoot as she grapples with record debt inherited from decades of pension neglect, as stated before, the city's number one problem.

With the loss of their favored candidate, Preckwinkle, politics are entering the picture and it's threatening to get nasty, and, in truth, would have been worse had Bill Daley been elected with his fractured view of local education, that included combining city colleges of Chicago, its community colleges system with CPS. And, then the CTU could have used the black and white divide to gain even more notoriety.

In a hopeful manner, Lightfoot said, “There’s no reason a deal can’t be reached by the start of the school year,” Lightfoot said Monday at a press conference at Webster Elementary School on the West Side. “There’s no reason there should be a strike. We have 30 days to get the job done. We could get this done today. We’ve put, I think, a very robust offer on the table.”

With some saber rattling, Sharkey said,  “This union is going to continue preparing for a strike, if need be, in order to deliver those improvements for our members and for the people who rely on public schools in the city of Chicago," reported the Sun-Times.

"The [fact finders] report’s suggestion on wages and employee health contributions was a compromise between the two sides’ proposals, with the fact-finder recommending a 16% raise over five years instead of CPS’ proposed 14% raise over that term. The teachers union had asked for a 15% raise over three years.

Employee contributions to health care, meanwhile, should go up by 1% over the last three years of a five-year deal, the fact-finder’s report said. CPS had proposed raising employee contributions to health care by 1.5% over that time, while the CTU asked to maintain current contributions.

The CTU had originally proposed a three-year, $3 billion contract with that 15% pay raise in a deal that would “rebuild” the city’s public school system with wraparound services that would support students faced with trauma," they added.

While a strike could begin as early as September, it is expected, if no agreement, to take place in October, "because they temporarily lose their health coverage if they aren’t working at the start of the month. Indications from the CTU point to a mid-September authorization vote at the earliest."

The vote amongst union members hit a record high at well over the needed 75 percent, and the rankling and saber rattling caused Lightfoot to hold a press conference where she was clearly rattled by the lack of progress, and the political denouement that CTU is planning, and claimed that the Board sent over a scant few pages in response to her 50 page report.

“I am definitely concerned,” she said at a press conference Monday morning as she stood side-by-side with Schools CEO Janice Jackson and Chicago Board of Education President Miguel del Valle. ”We have a number of open issues. We have moved and met them on issue after issue. We can’t bargain against ourselves," reported local station WBEZ.

“It [CPS’ offers] does not make promises CPS can not keep,” del Valle said, making clear he’s backing up the school district. “We will staff more nurses, more case managers and social workers. We will increase equity. We will improve conditions in all our neighborhood schools. But we need flexibility, we need creativity and we need partnership with CTU and the community."

Crain’s Chicago Business reported that, "CPS wrote in its recommendation that the five-year contract proposal helps keep a lid on the district's still-recovering finances, including unfunded pension liabilities and long- and short-term debt. “Given these significant long-term obligations, it is imperative that the board continue to stand firm in making fiscally responsible decisions related to the allocation of its limited financial resources among its operating costs (e.g. employee wages and health care benefits, staffing levels, etc.)."

While time will be the judge, the potential for political payback seems to be piggybacked on the needs of Chicago public school students. And, it's clear that sense a state law from 1995 says that teachers cannot strike outside of compensation, they are warily, and some say crafituly trying to get the so-called wrap around services guaranteed in writing.

The move, while seemingly innocuous, smacks of politics, since if CTU can get what it wants, and the city deficit increases, as a result, they can say, in response, "Well, if the money wasn't there why did shy put it in writing," and offer condolences on the burgeoning city deficit, while claiming innocence.

 Updated 9 October 2019, 06:57 p.m. CSDT

Lightfoot and the uphill battle of Chicago finances

Lori Lightfoot, the newly inaugurated mayor of Chicago, has faced some hard knocks in her nearly two month tenure, and among them is facing a crime rate, over the Independence Holiday weekend, that resulted in nearly 33 people shot, four of them fatal.

While the city has had banner headlines on crime for some time, and despite the new mayor’s nocturnal visits to high crime areas, it is not the most pressing problem that she faces - what is most important to help solve this, and other city wide problems, is money, that she desperately needs; and with an inherited budget from former Mayor Rahm Emanuel with a conservative estimated deficit of $700 million. This is indeed the elephant in City Hall.

With a Fall deadline approaching for a new budget, she has to attack the doughnut hole, so to speak, of an over $1 billion pension deficit that was the result of promising too much, and delivering it; but which was not helped by periodic raids, such as in 2007, when Mayor Richard M. Daley took $7 million to prop up the ailing CTA, to avoid a fare hike - the first of many such pension raids, and “holidays”.

To her credit Lightfoot has said that the pension crisis is her top priority, and “one she’s willing to risk her re-election on,” noted an editorial in Crain’s Chicago Business.

“The reason we haven’t solved the pension problem is (lack of) political will, pure and simple,” she said.

“Whether it’s the structural deficit for next year, the pension obligations that we have to meet, the service on the debt, open police, fire and teachers contracts and a range of other issues, we have a significant challenge on our hands. Make no mistake about it,” she added.

“We do need help from Springfield. We’re looking at a variety of options,” she said.

“I’ve had extensive personal conversations with the governor and the legislative leaders on both sides of the aisle. We are actively engaged with them and looking at ways we can get some relief from Springfield and we hope that will happen — whether it’s this session or in the fall veto session.”

In a recent move she has suggested that the state take a much larger role, and consolidate suburban and downstate pension funds in a new system, in exchange for Chicago foregoing  “some revenue the city now gets.”

Gov. J.B. Pritzker has shown some reluctance to this idea, and some observers feel that he has bigger fish to fry, but Lightfoot, who was once a prosecuting attorney, has countered that if this is a definite no, from the governor, then she may be forced to add another huge property tax increase, to address the deficit, with the result that Chicago residents may be reluctant to vote for the graduated tax structure, on the upcoming November 2020 referendum, that Pritzker recently shoehorned through the state assembly.

As The Chicago Tribune noted, at the time of the Emanuel hike, “That won't be the end of the pension-related property tax increases. Total property tax increases of $106 million for the police and fire pension funds are slated for 2018 and 2019.”

Moving on is the concern of the business community, which Lightfoot needs the support to harness most of her agenda, including reform of the public school system, (the nation's third largest), and most importantly, expanding economic development to include areas, long neglected, in employment and housing.

The move to go beyond business growth only in the Loop, is a hallmark of her progressive agenda, and while no one's expecting that this will be accomplished in a year, resetting the “business as usual” plan, to include, this change, has created what some have dubbed her “Marshall Plan”  a “promise to attack racial and financial inequality by focusing more economic development in neighborhoods, “south of Roosevelt and west of Ashland.”

To note, the Englewood neighborhood, one hit hardest by poverty and violence, has an unemployment rate increase to 34 percent in 2017 from 24 percent in 2011, Crain’s reported from the research of Mike Rothschild, “a data scientist in Chicago.”

One area that lies outside of the data, and has faced continued calls for an increase is taxing high-end services, mostly on accounting and legal services, but some see this as insufficient to enrich the city coffers, unless tied to other efforts, and services, to gain more than a million, noted Crain’s editorial board, and supported by columnist, Joe Cahill, who also notes that this is now “a faster-growing segment of the economy than merchandise sales.”

In comparison to other neighboring states, Illinois falls behind, by taxing only “17 services, most of them related to utilities and telecommunications.”

Chicago needs approval from Springfield; but here is a look at what others have on their books: Iowa taxes 100 services, Wisconsin 14, more than Illinois, and Indiana, seem as low tax, gains with an additional eight., says a 2017 report by the Illinois Commission on Government Forecasting & Accountability.”

Cahill sees that Lightfoots’s reluctance to do so, as a failure of leadership, perhaps, say some of her concerns of the long tally of regressive taxes, from her predecessor, might poison even the best of her future intentions, despite his tag of “revenue stagnation.”

Earnest and stalwart, the new mayor faces not only the road less traveled, but the well-worn path of yesterday, in her quest for Chicago’s financial reformation.