Chicago Mayor Rahm Emanuel reached an agreement with the Chicago Public Schools (CPS) and the Chicago Teacher Union (CTU) after 18 months of discussions. The deal served to avoid the third teacher strike since 2012, which had been scheduled for Tuesday. Kids are the biggest winners as they get to attend school. For their part, the adults lost and won something at the same time.
The tentative agreement is expected to be ratified by the CTU’s House of Delegates, which is set to meet later this week to make recommendations, so members accept the new contract terms. The deal will then be voted on by the 25,000 CTU members. Emanuel controls the third-largest public school system in the United States. He agreed to allow teachers access TIF funds.
The Tax Increment Funds is supposed to be used for private investments or city projects, but the mayor agreed to pour $88 million to help fund the teacher’s new contract. He declared the deal would make CPS finances stronger, as reported by Reuters.
The district had previously folded $32.5 million into its current budget, but the increase may not be enough to cover the new contract terms. Laurence Msall, president of local government finance watchdog the Civic Federation, told reporters on Tuesday that the tax increment would not be sufficient to solve the problems the schools are facing regarding the deficit.
The teacher union succeeded in convincing the CPS to put teacher assistants in kindergarten through second-grade classrooms with 32 or more kids. On the other hand, they must now contribute more for health insurance.
“Those TIF dollars build up over time, and when you empty that account, that money is gone,” said Emanuel’s top city council ally Alderman Patrick O’Connor, as quoted by Reuters. “So clearly, to rely on a settlement that relies on TIF surplus is not something you are going to be able to guarantee every year.”
CPS’s wins and losses
As for Chicago Public Schools, a school financial report reads that it came to the end of fiscal 2016 on June 30 with a $7 million operating deficit, according to Reuters. Although Chicago’s tax increment financing districts have assigned the CPS about 52 percent of surplus revenue per year, that stream has been considered as unreliable given that it has fluctuated significantly over time.
The $7 million to put teacher assistants in K-through second-grade classes affected the CPS. Still, the board was relieved because the agreement didn’t involve a major increase in staff. They were reluctant to add counselors and librarians because they said there was no funding, as labor expert Bob Bruno explained to CBS.
The CPS agreed to continue to pay 7 percent towards current teachers’ pension, and it will increase base salaries by 3.5 percent in July, and 3.5 percent in July for all teachers hired after Jan. 1 2017. But these new teachers will pay 7 percent toward their pension, according to CBS.