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Today’s history lesson

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Illinois

* Eric Zorn looks at the history of employer contributions to teacher pension funds…

Chicago started its own teacher pension fund in 1895, and the non-Chicago statewide fund started in 1913. Then in 1939, the laws were overhauled, benefits were standardized and the Teachers’ Retirement System of the State of Illinois — the suburban and downstate program — was formalized.

Why didn’t the two systems just merge at that time?

“Because ours was older and much better funded,” said James F. Ward, 74, executive director of the Chicago Teachers’ Pension Fund from 1967 until 1997. And Chicago was able to strike a deal that funneled a fair share of state tax revenues into funding pensions for Chicago Public Schools.

That all changed in 1995 with the deal that ceded control of CPS to Mayor Richard M. Daley. Part of the arrangement called for the Chicago Board of Education to have the flexibility to mingle education funds with funds formerly earmarked only for pensions, Ward said.

Another part of the deal was that the state would try to kick 20 to 30 percent of overall teacher retirement-fund payments back to Chicago, kind of like in the old days. But this aspiration — this goal — has lately gone by the wayside as budgets have tightened.

In fiscal 1995, the first year of the deal, Chicago got 23.2 percent of the money that went to the Teachers’ Retirement Fund. Fair enough, or close to it.

By fiscal 2012, that figure had dropped to 0.4 percent — not quite nothing but almost — with Chicago getting shorted by roughly $540 million, according to Chicago Teachers’ Pension Fund estimates. And some of the local money formerly earmarked for pensions instead went to paying the ongoing costs of running city schools.

Discuss.

posted by Rich Miller
Wednesday, Jul 11, 12 @ 1:07 pm

Comments

Appreciate Zorn’s efforts to educate. Very helpful. Still wondering 2 things from Longo’s op-ed yesterday:

- “The state’s funding formula for Chicago Public Schools — money for special education, bus transportation, free and reduced lunch and breakfast programs, summer school and educational service centers — is based on fiscal year 1996 student population totals that have not been updated.”

Anyone know why that is?

- “The Legislature passed a law providing for annual contributions in excess of $400 million to the CPS pension fund, starting in 2010. Check out the CPS budget, which is posted online, Mr. Speaker.”

Ditto.

Comment by Freeman Wednesday, Jul 11, 12 @ 1:30 pm
–Another part of the deal was that the state would try to kick 20 to 30 percent of overall teacher retirement-fund payments back to Chicago, kind of like in the old days.–

When you see the word “try,” you have no deal at all, as evidenced by today’s 0.4% contribution.

Comment by wordslinger Wednesday, Jul 11, 12 @ 1:55 pm
word, my experience is it depends on who you make your deal with. But even then, people move on and administrations change, and the new folks have a tendency to say, ‘hey, i didn’t agree to that”

Comment by steve schnorf Wednesday, Jul 11, 12 @ 2:02 pm
It appears that teh State was funding all teacher pensions somewhat evenly until the deal where the City got the ability to take the money and use it for other things (which seems to be a recurring Illinois pension problem) and the State then began renigging there (like in so many other areas).

Comment by titan Wednesday, Jul 11, 12 @ 2:08 pm
Completely unrelated, but I would enjoy a similar history lesson on why Cook County has an appointed (for life) medical examiner but every other county has an elected coroner. It isn’t because Cook is home rule; coroners and such are in the State’s Counties Code.

I can’t help but wonder if Cook’s current problem would have existed if a Cook County Coroner had to face the voters like all the other counties.

Comment by It's Just Me Wednesday, Jul 11, 12 @ 2:25 pm
The coroner was recently changed to a 5-year term.

Comment by Anonymous Wednesday, Jul 11, 12 @ 2:34 pm
Titan, the word you’re looking for is “reneging.” I’m not usually the grammar police, but the word you used might get you into trouble so I’m only trying to help you out.

Carry on.

Comment by 47th Ward Wednesday, Jul 11, 12 @ 2:58 pm
Bad deal in 1995 allowing CPS to co-mingle the funds.

Comment by James the Intolerant Wednesday, Jul 11, 12 @ 3:13 pm
47th - thanks. I’m too used to spellchecker features I guess.

Comment by titan Wednesday, Jul 11, 12 @ 3:31 pm
Love Zorn. Love Zorn.

Comment by soccermom Wednesday, Jul 11, 12 @ 4:08 pm
So as the money into teachers pensions declined, the salary of teachers increased.

I’d be interested to see if this could be correlated graphically.

Comment by Jade Rabbit Wednesday, Jul 11, 12 @ 4:41 pm
So … the decrease in State funds for Chicago Public Schools dates to giving Mayor Daley more “flexibility” … . IMHO, that means Daley caused this, and the State should “remove the flexibility” … .

Comment by Anyone Remember? Wednesday, Jul 11, 12 @ 5:42 pm
It’s Just Me -

Years ago, read a Royko column that said the reason Cook County voters abolished the Coroner’s Office and created a Medical Examiner was scandals, particularly stripping jewelry off corpses.

http://news.google.com/newspapers?nid=1876&dat=19890109&id=gj0sAAAAIBAJ&sjid=e84EAAAAIBAJ&pg=6621,3800691

Comment by Anyone Remember? Wednesday, Jul 11, 12 @ 5:45 pm
Elections for coroners is down right creepy. The person deciding the cause of death shouldn’t be in a political office; in my humble opinion.

Comment by David W. Aubrey Wednesday, Jul 11, 12 @ 9:57 pm
David, not only that, but we don’t require any qualifications to be coroner, which always made me wonder if a high school drop-out could get elected. Although, I think they do have to go through some training after getting elected.

Comment by Cheswick Wednesday, Jul 11, 12 @ 10:57 pm
David, An elected coroner is a check and balance against an elected sheriff.

Comment by Liberty_First Wednesday, Jul 11, 12 @ 11:23 pm