With all of the posturing in Springfield by the politicians about property tax freezes, now comes Mayor Rahm Emanuel offering to raise property taxes in Chicago by as much as $225 million as long as it’s part of a bargain with the teachers contribution to their pension. And, Rahm’s approached, released on the same day that Senate President John Cullerton proposes a two year freeze on property taxes!
Emanuel outlines school cuts and proposes property tax increase
Chicago Sun Times article by Fran Spielman and Lauren Fitzpatrick posted 7/1/2015, photo by Frank Spielman
Mayor Rahm Emanuel offered Wednesday to raise Chicago property taxes by as much as $225 million provided it’s part of an “all-in” bargain where teachers absorb their entire, 9 percent pension payment contribution and the state reimburses the Chicago Public Schools for “normal” pension costs.
“I want Springfield . . . to get off their duff, start providing the political leadership to make decisions to right the decades worth of political wrongs that have existed over the years that got all of us to this point,” the mayor said, pounding the podium for emphasis.
“This is the result of a political system that sprung a leak and now, it’s a geyser.”
If Emanuel raises property taxes by $225 million, it would cost the owner of a home valued at $250,000 roughly $225 more each year.
Emanuel offered what he called a “grand bargain” to correct the “structural inequity” that created the $9.5 billion teacher pension crisis as he outlined $200 million in budget cuts that will impact everything from elementary school sports and the high school day to start-up funding for charter schools, teacher development and school maintenance and repairs.
The mayor’s comments met swift and sharp resistance from the Chicago Teachers Union, with officials blasting the cuts to schools and saying their teachers would balk at what effectively is a pay cut, since the city currently picks up most of the pension contribution.
“While much remains unclear about the details of those cuts, it is clear that what cuts have been specified would do real damage to our schools,” CTU Vice President Jesse Sharkey said at a news conference.
“The mayor has also suggested 7 percent cut in teacher compensation that would take the form of eliminating the pension pickup, which has been part of teachers overall compensation since the early ’80s,” Sharkey continued.
“This is troubling to us because it appears to be backsliding, backtracking on commitments made at the bargaining table,” he said.
The union accused the mayor and his hand-picked school board of “poor fiscal management,” saying they led CPS into a series of questionable financial deals.
The cuts were triggered by the mayor’s decision to make a full, $634 million payment to the Chicago Teachers Pension Fund by Tuesday’s deadline without pension relief or the delay he sought from an Illinois General Assembly deadlocked over the state budget.
CPS expected that 1,400 positions would be affected — 350 open jobs won’t be filled, and the rest laid off — but could not specify Wednesday how many layoffs were bureaucrats and how many teachers. The CTU did not yet know either. Central office employees began receiving pink slips Tuesday.
Although class size will not be impacted and “very few” of the 1,050 layoffs are teachers, schools will feel the pain, the mayor said.
CPS’ high school day will begin and end 45 minutes later to save $9.2 million in transportation costs. An additional $2.3 million in busing costs will be cut by consolidating stops for magnet school students to “within two miles of students’ homes” instead of at their local attendance school.
Another $17.4 million will be cut from network offices, reducing funding for teacher development and start-up funding for new turnaround schools.
An estimated $15.8 million will come by eliminating start-up funding for newly authorized charter schools. That doesn’t necessarily mean a moratorium on new charters. It simply means new charters either have to find their own start-up funding or not open.
Although school cleanliness was an issue last year, about $11.1 million will come from reducing facility repair and maintenance budgets by 25 percent. Schools will be asked to “share” engineers. Privatized positions will be reduced by “limiting access to unused space” at some schools.
In a cut that could cut off the pipeline that feeds high school athletics, CPS will save $3.2 million by eliminating central funding for elementary school sports teams and ending stipends for 5,300 grade school coaches. That doesn’t necessarily mean no elementary sports. But if schools want to keep them and pay coaches, they’ll have to raise the money themselves.
“While we have protected the classroom and class size, these cuts have a different kind of impact. . . . They are now beginning to affect what I refer to as operations at the schools themselves,” Emanuel said.
“Even Springfield can hear this level of pain — even in all the politics that goes on down there. This is intolerable. It should be unacceptable to them. And it’s totally unconscionable that . . . we have to make a pension payment and affect the lives of our teachers and our students.”
In an audit that outlined the “breaking point” in CPS finances, the accounting firm of Ernst & Young suggested that the City Council enact two different property tax increases for the schools potentially totaling $450 million.
One of the tax hikes would be a “separate levy” of $50 million to bankroll school construction and pay off old projects. CPS has been empowered to impose a “capital improvement tax” for more than 20 years but “never activated” it. Emanuel is expected to take advantage of it.
The second property tax increase would “effectively replace general state aid” siphoned away from operations to retire school construction debt. It was based on an untested legal theory that, although CPS is hamstrung by a state-imposed property tax cap, the City Council can authorize an even bigger increase and transfer the money to CPS.
Emanuel is not following those suggestions to the letter. But he is offering to raise property taxes by $175 million for pensions — and by $225 million if, as expected, he adds the $50 million levy for school construction — if it’s part of a larger deal that Emanuel wants. ……………..article continued