(Adds comments from Civic Federation president and city
By Karen Pierog and Dave McKinney
CHICAGO Oct 11 A tentative deal reached late on
Monday between the Chicago Public Schools (CPS) and its teachers
union averted a strike that had been scheduled for Tuesday but
the impact on the district's already shaky finances was
Chicago Mayor Rahm Emanuel, who controls the nation's
third-largest public school system, agreed to initially pour
more surplus revenue from city development districts into school
coffers. But it was not clear if the increase to $88 million
from the $32.5 million the district already folded into its
current budget would be sufficient to fund new contract terms.
The second-term mayor said the agreement will make CPS
But Laurence Msall, president of local government finance
watchdog the Civic Federation, said the surplus tax increment
financing dollars were a one-time revenue source and would not
solve the schools' deep fiscal problems.
"It's not enough in terms of the deficit the Chicago Public
Schools face," Msall told reporters on Tuesday.
Even Emanuel's city council floor leader had questions about
earmarking unobligated money from the economic development
districts in the city.
"Those TIF dollars build up over time, and when you empty
that account, that money is gone," said Alderman Patrick
O'Connor, referring to tax increment financing. "So clearly, to
rely on a settlement that relies on TIF surplus is not something
you are going to be able to guarantee every year."
CPS has received about 52 percent of annual surplus revenue
from Chicago's tax increment financing districts. But that
revenue stream has fluctuated greatly over the years, making it
The proposed deal was enough to stop the Chicago Teachers
Union (CTU) from going forward with its planned Tuesday strike,
which would have been the third since 2012.
Chicago schools are grappling with escalating pension
payments that will jump to $720.2 million this fiscal year from
$676 million in fiscal 2016, as well as credit ratings that have
fallen to junk level. The district, which has nearly 400,000
students, ended fiscal 2016 on June 30 with a $7 million
operating deficit, according to a school financial report.
The proposed four-year contract, which has a retroactive
start of July 1, 2015, was posted on CTU's website on Tuesday.
It commits CPS to continue to cover all but 2 percentage points
of the current teachers' pension contributions of 9 percent, a
payment the cash-strapped district had tried to phase out. The
so-called 7 percent pension pickup will apply only to educators
hired before Jan. 1, 2017.
Base salaries for teachers hired after Jan. 1 of next year
would be increased by 3.5 percent in January and 3.5 percent in
Current teacher salaries would remain flat until a 2 percent
increase in fiscal 2018 and a 2.5 percent hike in fiscal 2019.
The deal creates early retirement programs if a sufficient
number of eligible educators participate. The programs include
nonpensionable lump sum payments CPS would have to make to
teachers and others covered under the contract by Dec. 31, 2017.
The union late on Monday also persuaded CPS to agree to put
teacher assistants in kindergarten through second grade
classrooms with 32 or more students.
The tentative agreement must be voted on by the CTU's house
of delegates, followed by a vote by the CTU's members.
(Additional reporting by Renita Young and Timothy McLaughlin in
Chicago; Editing by Matthew Lewis)