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Report: Chicago taxpayers pay $274 a year for teacher pensions, while everyone else pays $110

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Illinois

* The Sun-Times’ Abdon Pallasch takes a look at the disparities caused by the state picking up the employer contribution tab for suburban and Downstate schools, while not doing so for Chicago…

Most Chicago property taxpayers pay $164 a year more than their suburban and downstate counterparts under the state’s uneven teacher pension funding system, according to numbers the Chicago Public Schools provided to the Sun-Times. […]

(E)very year through state income taxes, sales taxes and other fees paid to the state, the average Illinois resident — including Chicago residents — pays $110 a year to fund the pensions of suburban and downstate teachers, according to estimates Gov. Quinn’s budget office provided to the Sun-Times. […]

In Chicago, the Chicago Public Schools funds its teacher pensions without help from the state based on money it collects from taxes on Chicago property owners.

That means the average property owner in Chicago pays $164 a year, according to estimates by the Chicago Public Schools.

That means Chicago residents pay twice — once to the state for suburban and downstate teachers and once to the city for Chicago teachers.

Suburban and downstate residents pay only once.

The CPS’ pension fund does get some state money, but that wasn’t calculated in the report.

Discuss.

* Related…

* School officials dispute governor’s take on ‘reserve’ funds: Carol Baker, Urbana’s director of business, said the data doesn’t take into account that the school district is holding onto money from Carle Physician Group’s property taxes, which are being disputed in court. “We can’t spend it,” Baker said, because the school district may have to pay it back on short notice. Plus, Baker said, money intended for transportation or building improvements can’t be spent to pay for pensions. “It’s a huge generalization to say that money is available,” Baker said.

posted by Rich Miller
Tuesday, Jun 26, 12 @ 9:16 am

Comments

Maybe this will cut down on that study period that the GA GOP says it needs. Because, apparently, they didn’t know that already. Never comes up during those action-packed weeks in Springfield.

Comment by wordslinger Tuesday, Jun 26, 12 @ 9:23 am
Why was the CPS pension fund subsidy not calculated in?

Does that not mean that all the State’s taxpayers contribute to the Chicago pensions?

Keep in mind that teacher salaries are lower outside the Chicago metro area. Their pensions cost will be lower anyway.

Comment by Plutocrat03 Tuesday, Jun 26, 12 @ 9:27 am
While we’re on the topic… why does Chicago have only 20% of the public school students in the state and gets almost 40% of the education budget?

I mean, if we’re going to play these games, let’s put all the cards on the table.

Comment by Just sayin' Tuesday, Jun 26, 12 @ 9:31 am
**Does that not mean that all the State’s taxpayers contribute to the Chicago pensions?**

Yes… technically. And I agree that the state subsidy for the CPS pension should be calculated in.

But with that said, the point is that Chicago residents pay a lot more for teacher pensions than everyone else in the state. And the salary differences don’t come close to making up the difference.

And I say that as a suburban tax payer that really doesn’t want my property taxes to go up (already twice as high as what I was paying in Chicago for a property valued the same - so much for low-tax Republicans, eh?). But it is absurd that Chicago is subsidizing the rest of the state’s pensions, especially considering that Chicago and Cook County are already subsidizing the rest of the state for all other state spending.

Comment by dave Tuesday, Jun 26, 12 @ 9:38 am
why does Chicago have only 20% of the public school students in the state and gets almost 40% of the education budget?

Because we have a completely broken public school funding structure? But I’m pretty sure that most school districts around the state are not going to want to address that.

The problem with IL’s school funding structure is that it is heavily reliant on property taxes rather than state dollars. Which creates a big disparity between Chicago and the rest of the state. As soon as you can get those parents who send their kids to Stevenson agree to shifting funding to the state rather than from property taxes, let me know.

Comment by dave Tuesday, Jun 26, 12 @ 9:40 am
Read the school code. Chicago has lots of provisions that downstate does not have.

I am a bit skeptical on how this was figured. Does the “property owner” in Chicago who ownes 1000 unit appartment complex pay $274? What about the farmer in Chapaign who has 1000 acres, does he pay $110? The systems are not the same. Chicago cut a deal to get their teachers out of TRS. They can’t now claim foul for a decision they made. The downstate teachers and taxpayer dis not want them out, they jump ship which now gives cover for Chicago legislators to not fund TRS.

Comment by the Patriot Tuesday, Jun 26, 12 @ 9:42 am
I would bet that the teachers in Chicago are also getting a much better pension then the suburban and downstate teachers also. Their salaries are higher, which would translate into a higher pension, so what’s the point here?

Comment by Rusty2 Tuesday, Jun 26, 12 @ 9:57 am
==As soon as you can get those parents who send their kids to Stevenson agree to shifting funding to the state rather than from property taxes, let me know==

dave, be careful what you wish for. Lake County (where most Stevenson students reside) property taxes are astronomically high, and I’m certain almost all of their parents would be open to considering a proposal to shift funding.

Comment by The Doc Tuesday, Jun 26, 12 @ 10:00 am
Not counting pension money, does CPS in fact receive more money per student from the state for education than compared to downstate school districts? If so what is the per student dollar difference?

Comment by Kerfuffle Tuesday, Jun 26, 12 @ 10:21 am
At least Stevenson parents can see some value from the way their education tax dollars are spent. They do a pretty good job for a HS district spending about $15K per student, relatively speaking for the generally overpriced Illinois eduocracy.

As a basis of comparison, Chicago spends about $13K per student in a unit district (which generally have about 10-20% lower costs per student that HS districts)and Naperville 203, another unit district, spends about $11,864 per student. Neighboring Indian Prairie 204 (another unit district) spends about $10,426 per student.

The point is that Chicago is one of the more expensive unit districts in the state, and is also among the most subsidized because of the way the formula was written.

When you’re considering the “fairness” on an issue, you can’t just look at one facet for comparison. You need to look at the “big picture”, like considering the state subsidies for roads and rural district state subsidies for school revenues beneath the “foundation level” which skews redistribution towards them.

The last time I looked at the state spending balance, the rural and downstate districts got much more than they paid in to the state, Chicago did a little better than breaking even, and the suburbs and collar counties get shafted big time.

Comment by Palos Park Bob Tuesday, Jun 26, 12 @ 10:30 am
1. Salaries are NOT higher in Chicago. Chicago has a higher starting salary than most schools, but retiring school teachers make much, much more in the suburbs. Which are heavily represented by the GOP. Which is exactly why Cross and Radogno don’t want their communities to pay their fair share.

2. Once again, I remind everyone what was recently reported on CapFax: many suburban and downstate teachers receive end-of-career pay boosts to bump up their pensions artificially. Its in their CONTRACTS.

3. All school districts in Illinois are funded precisely the same. Chicago, like many downstate urban districts and poor rural communities, receives per pupil poverty grants based on the percent of low-income students they serve.

The fundamental structural problem with school funding is that the state only provides about 3/4 of the funding for education that it should. Then, instead of fully funding the neediest districts first and at 100 percent, we continue to provide education subsidies for the wealthiest districts in the state, districts that could EASILY afford to fund their own schools.

Poor school districts are over-reliant on property taxes, and wealthy school districts barely touch the property tax.

Comment by Yellow Dog Democrat Tuesday, Jun 26, 12 @ 10:52 am
@Kerfluffle

Here is some perspective, from the State Board of Education’s school report cards…

Chicago receives 29.2% of its total funding from the State, compared to an average of 22.4% for other school districts statewide. Chicago has an Instructional Expenditure per Pupil of $7946, compared to $6773 statewide. And Chicago spends 80.5% of its expenditures on education, compared to 72.9% for other districts statewide.

Chicago is a Foundation Level district (last I checked, though it probably hasn’t changed) so, like other Foundation Level districts, it receives more money per pupil than wealthier, non-Foundation Level districts.

Comment by TwoFeetThick Tuesday, Jun 26, 12 @ 11:00 am
“3. All school districts in Illinois are funded precisely the same. Chicago, like many downstate urban districts and poor rural communities, receives per pupil poverty grants based on the percent of low-income students they serve.”

First suburban district to step up and offer admission to their schools for, say, 500 of the poorest CPS kids can take *all* of the state funding for those 500, too. And I bet CPS would even chip in some funding for busing.

Anyone who acts like the suburban districts don’t benefit from the vast majority of the poorest kids in Illinois being dealt with by 299, 189 and 150 is fooling themselves.

Comment by Chris Tuesday, Jun 26, 12 @ 11:06 am
dave, be careful what you wish for. Lake County (where most Stevenson students reside) property taxes are astronomically high, and I’m certain almost all of their parents would be open to considering a proposal to shift funding.

Ha - not if it meant less money for their schools. And that is exactly my point.

Comment by dave Tuesday, Jun 26, 12 @ 11:09 am
@YDD

While I agree with most of your assessment, on average teacher salaries are slightly higher for teachers in Chcago. The average annual salary for teachers in Chicago is $71,236. Also on average, teachers in Chicago have 13.7 years of experience. The statewide average salary for teachers is $64,978, with an average 13.2 years of experience. So, Chicago teachers on average make a little more, but also have a little more experience.

Comment by TwoFeetThick Tuesday, Jun 26, 12 @ 11:11 am
I’m sorry, the City of Chicago by no streatch of the imagination is “property tax” poor. The entire property values of the financial district alone should put to rest that somehow Chicago’s “depressed property tax values” mean the state has to kick in the rest.

Then again, in the City, property tax is calculated on 18% EAV when it’s 33% everywhere else.

I guess we should factor in that extra little city perk while we’re at it.

Comment by Just sayin' Tuesday, Jun 26, 12 @ 11:17 am
=…teachers in Chicago have 13.7 years of experience. The statewide average salary for teachers is $64,978, with an average 13.2 years of experience. So, Chicago teachers on average make a little more, but also have a little more experience.=

You also failed to mention that Chicago has far fewer school days than most other Ilinois or major city schools, and the school day is embarassingly shorter.

Comment by Palos Park Bob Tuesday, Jun 26, 12 @ 11:18 am
TwoFeetThick …Thanks for the figures but spending is not the same what the districts are actually receiving in terms of the school aid formula.

Comment by Kerfuffle Tuesday, Jun 26, 12 @ 11:21 am
“Report: Chicago taxpayers pay $274 a year for teacher pensions, while everyone else pays $110″

But this is a good thing for Chicago! They are able to ‘pay their own freight’, which keeps costs in check, unless they want to spend more to get better teachers. That will help them maintain their status as a Midwest economic tyranosaurus,

They are the model for all of Illinois.

Why would we want to change anything?

Comment by Clio Tuesday, Jun 26, 12 @ 11:28 am
Kerfluffle

Chicago receives 19.3% of its total revenue from General State Aid. In other words, this is what it receives from the State under the school funding formula (which includes poverty grants). In comparison, school districts statewide receive 14.9% of their funding from GSA.

I believe this answers your question - Chicago recieves a higher percentage of its total revenue from the State than other school districts do, on average. In 2011, Chicago received $1.002 billion in General State Aid.

Comment by TwoFeetThick Tuesday, Jun 26, 12 @ 11:54 am
Simple headlines, complicated laws…..

Comment by Liberty_First Tuesday, Jun 26, 12 @ 12:00 pm
TwoFeet
Chicago wouldn’t qualify as a Foundation Level district if one third of the property tax base weren’t Tiffed.

Chicago homeowners enjoy one of the lowest property taxes in the state. A $300,000 home in Chicago pays more than 50% less than the same value home in Oak Park or Evanston.

Comment by reformer Tuesday, Jun 26, 12 @ 12:22 pm
It appears the the heavily burdened Chicago property owners who have higher property taxes to pay, because so many in Chicago do not pay property taxes, have banded with Quinn, Madigan and Emmauel to bilk the rest of the state out of more money.
You know kinda like when Quinn gave out huge corporate tax breaks to companies that were going to leave Illinois anyway. The arugments that “Downstate” Republicans as pointed out by Yellow Dog Democrat make me laugh. Do you believe in that 1% and 99% drivel? It has nothing to do with Republican and Democrat, not Red or Blue. It is GREEN, and Chicago must squeeze out the GREEN from everyone. Corruption and malfeasance.
Maybe I’m wrong, but Chicago is in the State of Illinois, isn’t it? Regardless of the Chicago Teachers pension system or the state TRS, Chicago property owners should have to pay not only for Chicago but the rest of the State, unless Chicago is a sovereign nation.
If you stop paying attention to the spin machine, and start understanding that Illinois has been controlled by Madigan for the last 30 years, and the State has failed to fund the pension system, which means Madigan is hugely responible for creating the fiasco, then you could begin to see, that the 1% are not about Party affiliation socialist democrats believe, they are self-serving narcissistic leprechauns.
Pay up, or get out!

Comment by Panopticon Tuesday, Jun 26, 12 @ 12:24 pm
===because so many in Chicago do not pay property taxes===

What?

Comment by Rich Miller Tuesday, Jun 26, 12 @ 12:25 pm
So I guess then my next question is, if CPS gets 19.3% of its total revenue from the state and downstate gets 14.9%, if everyone got the same funding levels from the state then couldn’t the downstate districts use that additional money to help offset part of the proposed local funding of downstate teacher pensions? It would certainly be interesting to see what amount of money this would bring to downstate schools. Too simplistic I know but sure sounds reasonable on the surface of it.

Comment by Kerfuffle Tuesday, Jun 26, 12 @ 12:39 pm
Just sayin

The state multiplier evens out the chicago property tax EAV with the state EAV. You have to do all the math on the bill. Yes Chicago does it Differntly ( to hide the true numbers I believe) but after the state multiplier the percentages are the same state wide.

Comment by Fed up Tuesday, Jun 26, 12 @ 12:56 pm
When he Chicago resident pay 70% of their property tax bills to the schools, I will listen.

Unitl then not so much.

Comment by PLUTOCRAT03 Tuesday, Jun 26, 12 @ 1:14 pm
For an apples to apples comparison shouldn’t someone also compare the percentage of state aid Chicago recieves as a percentage of its education per student cost- the suburbs currently recieve a smaller share of the cost per student then Chicago gets which totally compensates for the pension funding differential

Comment by Sue Tuesday, Jun 26, 12 @ 1:41 pm
===For an apples to apples comparison ===

It’s not because the state funding formula has forever been biased against property tax wealthy districts. Plus, Downstate schools also get the state pension aid, so you’d have to include them as well, and many get a very high percentage of their income from the state.

Comment by Rich Miller Tuesday, Jun 26, 12 @ 1:47 pm
From Yellow Dog Democrat -Once again, I remind everyone what was recently reported on CapFax: many suburban and downstate teachers receive end-of-career pay boosts to bump up their pensions artificially. Its in their CONTRACTS.

What exactly do you consider Downstate? My wife is a teacher in southern Illinois and there is no clause in her contract(nor any of her co-workers) to boost her salary at the end of career. You must have teachers confused with Blago appointees!

Comment by Rusty2 Tuesday, Jun 26, 12 @ 3:39 pm
@TwoFeetThick -

You’re relying on the School Report Card for your data, and, as you point out, comparing apples and oranges.

Go read the Illinois State Board of Education’s Teacher Compensation Report. It has the teacher pay scales for every school district in the state.

You’ll quickly see that Chicago has one of the highest starting salaries for teachers.

But, CPS’ pay scale levels off very quickly, and you’ll end your career with a much higher salary and a much better pension in many of Chicago’s suburbs.

Comment by Yellow Dog Democrat Tuesday, Jun 26, 12 @ 4:14 pm
@Rusty2 -

First, my thanks to your wife for her public service. Teachers change lives forever, and are arguably the most under-compensated profession in the U.S.

From CapitolFax, dateline Tuesday, June 19th:

“Democrats’ chief argument in trying to shift pension costs to local schools after decades of the state paying the bill is that school boards, by raising teachers’ salaries, hike pension costs without having to pay for it.

[Warrenville Unit District 200 Superintendent Brian Harris] said the District 200 school board has heard that argument loud and clear.

He helped finalize a contract just last week that takes away automatic 6 percent raises for teachers at the end of their careers that help raise their retirement benefits. Many school districts still have such provisions.“

Comment by Yellow Dog Democrat Tuesday, Jun 26, 12 @ 4:21 pm
What happened to Downstate forming its own State so it doesn’t have to allow civil unions and everyone can have all the guns they want? Hmmm? I guess it’s going to be a little more expensive than they thought.

Comment by Concerned Professor Tuesday, Jun 26, 12 @ 5:34 pm