Robbing Peter to Pay Paul
When we first heard this, it sounded weird. Seeing it in print, it's even weirder:
- Mayor Rahm Emanuel’s proposal to have the Chicago Public Schools effectively borrow $500 million from the city’s teacher pension fund to avoid additional layoffs and classroom cuts has been shelved just days after it was introduced.
In a brief news release, CPS and Chicago Teachers’ Pension Fund officials announced Friday that “the organizations have reached a mutual agreement to end discussions on CPS’s proposed Fiscal Year 2016 pension payment schedule,” which was part of the borrowing deal.
Someone correct us if we're misunderstanding:
- The Teachers' Pension fund, notoriously short of funds....
- ...was thinking of "loaning" to the Chicago Public Schools....
- .....an organization that is not only near bankrupt, but has raised their share of the property taxes to the maximum the past how many years....
- half-a-billion dollars?
This is somehow legal? And how exactly was the CPS going to pay the fund back? Junk bonds? More tax raising? The more we see here, the more we keep thinking that someone is just hoping for a guy named Jack to show up with a handful of magic beans and a tale of a city in the clouds with a giant hoarding riches.
Labels: money questions
posted by SCC at 12:31 AM
30 Comments:
So where is that $500 million going to come from now?
And why was the plan suddenly shelved after it was announced as such a great idea?
This so messed up. They are trapped in a big problem.
In case you forgot the back in the 80's Teachers Union proposed that the City "borrow" from the Police Pension to give the teachers a raise. This was back in the days when they went on strike every year demanding higher and higher pay.
"Officials refused to detail why the talks about the borrowing fell apart"
Is the pension system so illiquid they don't have the $500 million in cash to lend bac to t he city?
"Ruiz said in the news release that the school system continues to seek help from state lawmakers to solve the fiscal crisis."
LOL. Springfield needs all the help they can get. There are no more extra pennies left to help prop up CPS and their craziness.
CPS ran a 12 month budget using 14 months of revenue this year!
CPS actually took 2 months of revenue from the upcoming budget to avoid making any cuts in an election year last year.
You reap what you sow.
If this worked with the teachers, Rahm was going to pull this on the police and fire, no doubt in my mind.
More like the good Uncle Sam will show up and bail both of them out.
OWhy the fuck not "borrow" from the pension fund after so
many years of municipal thievery from the same?
Can't wait to see the "creative financial arrangements"
Rahm has in store for our pension fund...
One person is responsible for the mess. FORMER MAYOR KING DALEY! He was in charge for nearly 25 years. He is responsible. PERIOD! When will the media start calling him out? He was very bad. Stop honoring him and his family.
Explain to me why we have over 11,000 officers on this department and yet there are only a little over 300 donations to Officer Cole. Can you please consider giving $5, $10 or maybe $20. Any small amount among all of us will help him out. I know times may be tough for some but $5 isn't much to ask for. This could of been any of us and I am just completely surprised why more people are not donating. Please think of him and what he has been through, he needs our help. Be safe all!
Daley....worst Mayor in American history.
It's desperation time. We're circling the drain faster and faster. You know, the Green Bay Packers may suck but Wisconsin is looking better and better all the time.
Loaning Money to a Chicago Organization?
This is as stupid as loaning money to the Greek Government.
Salaries are a huge problem for CPS, especially at failing school. Let's talk about some CPS salaries which are absolutely ridiculous.
Are you aware CPS pays a Clerk 1 almost $50,000 and another $25,000 in pension and medical benefits after four years experience? The Clerk 1 position requires no college coursework while only requiring a high school diploma or GED equivalency along with only one year of clerical work and the ability to type 45 wpm with only 10 mistakes. (How can a clerk who doesn't speak a complete sentence in English type 45 wpm with only 10 mistakes?)
Are you aware many CPS high schools pay teacher salaries and benefits to employees working in positions entitled 'Resource/Consultative Teacher' and none of this employees work in a classroom? Instead, these employees work in the following areas: In-School Suspension, Security, Athletic Director, Dean, Student Activities, Building Operations, Freshman Admissions, Bookroom Attendant, Tool Room Operator, Attendance Clerk, Disciplinarian, and Programming. All of these areas could be filled by non-certified personnel at half the amount of pay and compensation, even the in-school suspension position which is a prison guard-type position.
In fact, Taft high school has employed a former Drafting teacher from Amundsen high school with 40+ years experience as an attendance clerk under the position title of 'Resource/Consultative Teacher' for the past four years while paying him $90,000 + $30,000 in pension and medical benefits. This, while Taft has a 48% truancy rate and horrible tardy problem. And, this, when Taft needs a second librarian and help in other departments around school. The salary for this attendance clerk could cover two position at Taft, including a second librarian and another 'non-certified' attendance clerk.
Did you know CPS teachers can get a salary step and lane increase by getting an advanced degree, even if the advanced degree has nothing to do with their teaching area? An example is a PE teacher getting a Masters degree in Administration.
BTW: Here's a link to an article showing you how much the CTU Leadership makes, this while they did next to nothing in the last strike for their CTU members and all they're doing during this contract negotiations is 'hoot and holler' with no substance:
http://www.nbcchicago.com/blogs/ward-room/Karen-Lewis-Chicago-Teachers-Union-salary-271074671.html
49% of my property tax bill is already designated for CPS, when does it end? None of my children went to a public school and yet I am being gouged. Screw you CPS and CTU, you are both at fault. Dismantle the entire public school system and give reasonable vouchers to parents. Be done with them all.
Some one has to pay for Maggie Daley park....
Tell me again why dich daley isn't in prision?
You're right. This is strange.
I wonder how much interest Rahm was willing to pay on that loan and which legal firm would broker the deal.
Did he just try and pull a Vanecko?
Go ask Shortshanks for the coin, maybe LAZ can forego some of their meter revenues for a few years, after all they their meters are on OUR streets.
Or hey, what about NOT spending TIF's and general funds for a few years to help pay your bills,just like the taxpayers do.
Don't forget RE taxes and Water bills due in August...looks like I'll forego uniforms. Oh well.
That's Rahmenomics for you.
via Cataylst Chicgao:
Roots of the Chicago teacher pension crisis
July 2, 2015
Pension loose change
By Maureen Kelleher
Then
When state lawmakers gave Mayor Richard M. Daley control of Chicago Public Schools in 1995, the deal included sweeping changes to the laws that controlled how the district spent its money. The biggest revenue shift came from combining several property tax levies—including one earmarked to pay for teacher pensions—into one fund that could be used to pay current operating expenses. That year, $62.2 million was diverted from pension payments to operating expenses. CPS also contributed $24 million to the teachers pension fund that year.
This was not the first time CPS had used pension funds for the regular budget. Between 1990 and 1993, Springfield transferred dedicated pension revenue to district operations in order to pay for teacher raises and bonuses. (The Chicago Teachers Union backed the move.) But for the two years prior to mayoral control of Chicago’s schools, the district had only been permitted to borrow from the fund, not divert payments.
At the time Vallas and his administration won kudos for fixing the district’s longstanding budget woes, but without this provision and others granting greater budget flexibility, they would have been unable to balance the budget.
See “New law lets board shift money to balance budget,” in “The New Regime,” Catalyst September 1995
Now
State law requires CPS to ensure teacher pension assets total at least 90 percent of what will be owed to retirees 35 years in the future. Between 1995 and 2005, CPS was able to continue diverting pension payments because investment returns kept the funded ratio above the 90 percent threshold. In 2006, the ratio fell below 90 percent and forced CPS to pay.
Like many other public pension systems across the country, Chicago Public Schools is struggling with the double whammy of the Great Recession and increasing numbers of longer-lived retirees. The effects of the squeeze were felt by 2009, when the district projected a deficit of $475 million. Then-CEO Ron Huberman labeled the required pension payment of $130 million as one of a number of “deficit drivers.”
See “A Primer on Chicago’s teacher pension,” Catalyst March 2010 and “Set the record straight on teachers pension fund problems,” Catalyst August 2013
Next
Earlier this week, after efforts to seek help from Springfield failed, CPS managed to swallow a massive $634 million pension payment. As the Chicago Sun-Times reported, the district made the payment through borrowing and a pledge to cut $200 million, including as many as 1,400 layoffs.
Previously, Springfield lawmakers passed a bill to raise fines on charter operators who make late payments to the teacher pension fund. (Charter operators must contribute to the pension fund for all full-time, certified teachers working in Chicago charter schools.) “My goal is to look under every rock for every cent that we can get,” said Jay Rehak, president of the Chicago Teachers Pension Fund.
However, none of these fixes addresses the long-term structural problems. A recent working paper from the National Bureau of Economic Research notes that Illinois’ poor history of making contributions to state public employee pensions means that pension reform is not enough to solve their structural problems—new revenues or additional spending cuts will have to be addressed.
For many years, the Chicago Teachers Pension Fund was insulated from these problems. One long-overlooked consequence of the 1995 reform law is that Chicago is now in similarly dire straights. Current unfunded liabilities to the fund now total almost $10 billion. As Charles Burbridge, new executive director of the fund, told Catalyst in a recent Q & A, “Pension funding works when the employer pays for benefits as they are earned. When the employer doesn’t pay for those benefits, you get into problems.”
http://catalyst-chicago.org/2015/07/roots-of-the-chicago-teacher-pension-crisis/
i lost sympathy for the teachers when the CTU sent several bus loads down to Ferguson last year to show "support for Micheal Brown".
The CTU is not our friend & Karen Lewis is another Fidel Castro/Hugo Chavez.
Anonymous said...
Salaries are a huge problem for CPS, especially at failing school. Let's talk about some CPS salaries which are absolutely ridiculous.
Are you aware CPS pays a Clerk 1 almost $50,000 and another $25,000 in pension and medical benefits after four years experience? The Clerk 1 position requires no college coursework while only requiring a high school diploma or GED equivalency along with only one year of clerical work and the ability to type 45 wpm with only 10 mistakes. (How can a clerk who doesn't speak a complete sentence in English type 45 wpm with only 10 mistakes?)
Are you aware many CPS high schools pay teacher salaries and benefits to employees working in positions entitled 'Resource/Consultative Teacher' and none of this employees work in a classroom? Instead, these employees work in the following areas: In-School Suspension, Security, Athletic Director, Dean, Student Activities, Building Operations, Freshman Admissions, Bookroom Attendant, Tool Room Operator, Attendance Clerk, Disciplinarian, and Programming. All of these areas could be filled by non-certified personnel at half the amount of pay and compensation, even the in-school suspension position which is a prison guard-type position.
In fact, Taft high school has employed a former Drafting teacher from Amundsen high school with 40+ years experience as an attendance clerk under the position title of 'Resource/Consultative Teacher' for the past four years while paying him $90,000 + $30,000 in pension and medical benefits. This, while Taft has a 48% truancy rate and horrible tardy problem. And, this, when Taft needs a second librarian and help in other departments around school. The salary for this attendance clerk could cover two position at Taft, including a second librarian and another 'non-certified' attendance clerk.
Did you know CPS teachers can get a salary step and lane increase by getting an advanced degree, even if the advanced degree has nothing to do with their teaching area? An example is a PE teacher getting a Masters degree in Administration.
BTW: Here's a link to an article showing you how much the CTU Leadership makes, this while they did next to nothing in the last strike for their CTU members and all they're doing during this contract negotiations is 'hoot and holler' with no substance:
http://www.nbcchicago.com/blogs/ward-room/Karen-Lewis-Chicago-Teachers-Union-salary-271074671.html
7/11/2015 06:17:00 AM
Did you know that the CPD pays full duty officers to answers phones, file papers, type reports? A civilian clerk with half the salary could perform the same duties. There are inside officers, full duty performing very simple clerical duties, not requiring any special skills. CPD could easily hire civilian workers, use light duty or recovering officers in those positions, freeing full duty officers to work the street. There is waste in every part of city and county government. Not just teachers.
I knew this Greek debacle was coming just by the way 019 was being run. A real let it slide attitude. Now They don't want cooperate w/The EU?
Only going to get worse
Eli must be in charge here and abroad
Remember...
Rahm had a plan.
That other guy was booed and shouted down because
he wanted to take time and let his financial people go
through the ingredients to determine just how much
shit was baked into the muni budget cake.
Remember
Pt. II...
Rahm had a "plan" by virtue of incumbency.
That shitty cake?
Old frosting scraped off.
New frosting slathered on thick...
Same with this convoluted financial fuckery
Rahm and his propeller-head whiz-kids are foisting
As the best thing since... Well... Err...
Ahhh shit...
Y'all get the picture.
How does that saying go?
"A lawyer with a pen can steal more money than 100 men
with guns."
In rebuttal...
A forensic accountant with a gimlet eye and a good calculator can send 1000
of those same lawyers to the hanging tree.
Chicago needs to be subjected to a horde of forensic accountants
with gimlet eyes and hateful hearts to facilitate all the right m/fers
being sent to the hanging tree.
Anonymous Anonymous said...
Explain to me why we have over 11,000 officers on this department and yet there are only a little over 300 donations to Officer Cole. Can you please consider giving $5, $10 or maybe $20. Any small amount among all of us will help him out. I know times may be tough for some but $5 isn't much to ask for. This could of been any of us and I am just completely surprised why more people are not donating. Please think of him and what he has been through, he needs our help. Be safe all!
7/11/2015 01:50:00 AM
Why? Because I'm not confident about how the money is being handled. Heard people handling his money haven't been responsible with it and I'm not giving my money away to have it wasted.
@1135 - I wasn't aware of his funds not being handled responsibly. If this is the case, I hope someone can look
Into this and help him. Thanks for the information.
Anonymous said...
Tell me again why dich daley isn't in prision?
7/11/2015 07:53:00 AM
Bill Cozzi went to prison and Richard M Daley didn't. That is evil, pure evil.
That's not what a pension fund is used for. The greedy politicians don't want to fund these but want to take money from it. ?
I believe it was Earnest Hemingway who was quoted as saying something like, "You go broke very slowly and then very quickly."
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