Large and growing payments required to keep the Chicago Teachers’ Pension Fund solvent are squeezing CPS' budget, forcing cuts elsewhere and limiting investment. The Chicago Board of Education has increased property taxes, but it is not enough to keep up with the high annual costs. What measures do you support to ensure a solvent retirement system and to improve the district's finances?Budget
In 1995 the Chicago Teachers Pension Fund was nearly 100% funded. Despite Illinois law requiring the Chicago Public Schools to fund the CTPF
by 90% by 2045 Teachers and paraprofessionals made their contributions as required. Between 1995-2005 CPS collected more than $2 billion in
pension tax revenue and contributed zero to the pension fund. Instead, CPS repeatedly took pension holidays over a period of 10 years. CPS the
requested pension relief in April of 2010 in the amounts of $400 million per year until 2013. I suggest the State of Illinois provide the Chicago Teacher’s Pension Fund the same funding it provides to the Teachers’ Retirement System (TRS) which benefits suburban and downstate pension systems. this will be equivalent to over $2.5 billion in annual support.
This year, working with President Preckwinkle, I helped pass a County budget that the Civic Federation praised. They called us “accountable and efficient” stewards of public resources. Unfortunately, the City of Chicago continues to move in the opposite direction. Getting City finances back on track will take new leadership, and it is one of the principal reasons I am running for Mayor.
The City’s use of long-term bonds to fund operations and short-term expenses -- “scoop and toss” -- is not justified. The practice is unsustainable, and it is expensive. Instead of paying off $120.8 million in bonds as scheduled in 2015, the City refinanced them at an additional total interest cost of $229 million over 30 years. In other words, poor financial decisions cost the City $229 million that could have been used to create new jobs, educate our children or make our streets safer.
As a City, we have to find better ways to fund infrastructure and operations. We cannot keep borrowing money to pay debts, and leaving the looming financial problems to future generations. That kind of approach will bankrupt local government and destroy our City’s future. One possibility is finding better efficiencies in cooperation with the County. This has not been aggressively pursued by the current City administration, but it can lead to reduced costs and savings, while providing improved and expanded services, especially in transportation and health care. We cannot cut our way out of the structural deficit but we can and must operate more efficiently as part of the solution. In addition to better coordination of services among local governments, efficiency means cutting waste and looking for new revenue sources.
I support bringing in an expert to review and analyze the budget and spending of CPS. We need to find measures outside of raising taxes to fix the pension crisis. Our teachers have worked hard for their pensions and we need to ensure those benefits for them when they retire.
First, I would put an end to toxic swaps, which could cost our schools up to $100 million. I will demand the banks renegotiate these deals and put an end to this practice. Second, TIFs have siphoned much needed revenue from CPS. The amount that's being taken away from what would be the CPS levy does not add up to the amount they could be putting in schools. We're sitting on over a billion in TIF revenue. I will declare a TIF surplus and put that money back into our schools where it belongs.
Investing in our children's future is a top priority and despite budget constraints CPS continues to make significant investments in schools, programs, and facilities that will benefit students in all Chicago neighborhoods across the city. Through $750 million in central office, administrative and operational cuts, we will ensure the funding stays where it belongs – with the students in classrooms across the city. But moving forward we must address the looming budget crisis with a far broader strategy. To start, I continue to work with our partners in Springfield to reform the pension system and give Chicago its fair share of education funding. Last year, Springfield passed pension reform for all school districts in Illinois except Chicago. Equally problematic, the state of Illinois budget pays the full pension cost for all school districts other than Chicago. Between these two disparities, Chicago is losing out on hundreds of millions of dollars in financial relief that can directly impact our classrooms. I will continue to work in Springfield to correct these disparities and fight to make sure that Chicago is no longer treated differently when it comes to education funding and pension relief.