* Ralph Martire on the “blame Chicago” rhetoric…
The problem is the current rhetoric about the Chicago bailout, just like the vast majority of past attempts to pit downstate Illinois against Chicago, creates a false dichotomy that ultimately encourages legislation counter to the interests of downstate communities. Understanding why this is the case, requires an understanding of what the dreaded “Chicago bailout” actually entails. The key element of the proposal involves providing some financial support to Chicago Public Schools, by having the state cover all or a portion of the “normal pension cost” — that is, the employer cost of future retirement benefits — currently being earned by CPS teachers.
Many of you are probably wondering why state tax dollars collected everywhere from Rockford to Marion, should be used to cover the normal cost of pension benefits being earned by teachers in Chicago. Well, first and foremost, because Illinois already pays the normal cost of pension benefits earned by teachers in every school district statewide except Chicago. That’s right, CPS is the only school district that has to fund its own normal cost.
Of course, this also means Chicago taxpayers foot the full pension bill for CPS teachers, while also chipping in to cover a portion of the pension benefits being earned by teachers in Rockford, Marion, Winnetka — heck, you name it. And lest you think that contribution isn’t significant, Chicago residents alone account for roughly 20 percent of all income tax revenue collected statewide. So, the proposal isn’t so much a bailout — but rather an attempt to put CPS on equal footing with every other school district.
* Sun-Times today…
The Chicago Public Schools will make a $676 million payment to the Chicago Teachers Pension Fund due Thursday even though that massive payment will leave the nearly bankrupt school system with just $24 million in the bank — enough to cover just 1.5 days of payroll.
“Chicago Public Schools will make that pension payment. . . . In the last two years, the city of Chicago has made more pension payments to the Chicago Teachers Pension Fund than the preceding 15 years. Payments weren’t made by Springfield or anybody else, and that was wrong,” Mayor Rahm Emanuel said Monday.
Emanuel said CPS would “not have a financial challenge” if Chicago taxpayers were not paying twice — through property taxes for the pensions of their own teachers and through income taxes for the pensions of teachers outside the city.
* According to the governor’s budget office, the state’s pension contribution to the Downstate and suburban Teachers Retirement System is estimated at $3.743 billion this fiscal year. If the 20 percent number is accurate across the board, Chicagoans are paying roughly $749 million to the state to fund a pension system that doesn’t include their own teachers - on top of the $676 million payment they’re making Thursday for their own pension fund.