On top of losing hundreds of millions in funding, over the past two years CPS has also covered state-mandated teacher pension payments without support from the state - something no other district in the state has to do.
In the past two years, CPS has taken more than $1 billion out of the classroom to cover pension payments, and will spend another nearly $700 million this year in pension costs. This is despite the state’s assurances that it would contribute CPS teachers’ pensions - a promise that is worth $200 million of this year’s payment.
There’s no doubt that teachers deserve the pension they’ve earned, but the state is demanding CPS live up to its obligations without living up to their own - and the math just doesn’t add up. The state is cutting funding to CPS while mandating CPS pay more.
This is a far cry from the way the teacher pension system in Chicago was supposed to work.
Chicago Public Schools has one pension system for its teachers, while the State of Illinois has another for teachers statewide. The Chicago Teachers’ Pension Fund is supported by two revenue streams: tax revenue from Chicago residents, and a contribution from the state of 20% to 30% of what the state provides other districts.
For decades, this system worked well - with a higher percentage of the state’s population, CPS could support more of its own costs. But over time, much like the state’s approach to education funding, the pension systems became separate and unequal.
As the economic performance of the fund changed and retirees began living longer, pension costs continued to rise. At the same time, the state contributed far less than it intended to, and the population of Chicago decreased, providing less income tax revenue. While trying to find funding solutions on both ends, no pension payments were made for nearly a decade.
Then, in 2013, the state mandated CPS make pension payments in full each year - for both the amount owed annually, and the amount of the payments missed during the “pension holiday”. To make matters more difficult, CPS was forced to do this with little any contribution from the state.
The consequences of this are real, and are felt in every school, by every student. The consequences are also felt by Chicago taxpayers. As they see higher state income tax rates, they should know the state is relying on them to pay for the cost of teacher pensions twice: to support the pensions of teachers in other districts, and for Chicago teachers.