Saturday, September 22, 2012

Slouching towards Detroit.

Chicago School Leaders Don’t Know How They’re Going to Pay for the New Contract!

The successful business leaders that sit on the Chicago Board of Education must have checked their brains at the door when they went into the negotiating room with the teachers union. How else could they possibly negotiate a contract that the school district can’t possibly afford?
Truth be told, if board member Penny Pritzker’s Hyatt Hotels operated that way, they’d be out of business. But, alas, this is government. They strike deals with unions and figure out how taxpayers will fund it later.
Reuters tells us:
“Chicago public school teachers returned to their classrooms on Wednesday but thorny questions remained over how Mayor Rahm Emanuel and the cash-strapped school system will pay for the tentative contract that ended a strike of more than a week.
“The three-year contract, which has an option for a fourth year and which awaits a ratification vote by the 29,000-member Chicago Teachers Union, calls for an average 17.6 percent pay raise over four years and some benefit improvements.
“Average teacher pay is now about $76,000 a year, according to the district, which pegged the annual cost of the new contract at $74 million a year, or $295 million over four years.
“The $5.16 billion fiscal 2013 budget approved by Chicago Board of Education last month closed a $665 million deficit by draining reserves and levying property taxes at a maximum rate, while also slashing administrative and operational spending.”
Let’s see: historically high pay, depleted reserves, maxed-out tax rates…so what does the board negotiate? A 17.6 percent raise and benefit improvements! Hyatt Hotels may go bankrupt operating that way, but this is government!
The likeliest solution would be to slim down the district, which would directly impact the Chicago Teachers Union’s dues intake. The district will most likely lay off teachers to cut costs and make up for the loss of student enrollment.
The district’s financial problems are compounded by the fact that its credit rating was recently downgraded, making it more expensive for the district to borrow money. The district’s draining of its reserves, huge pension costs and labor fight were blamed for that development.
The union’s strike accomplished precisely what it set out to do: get a sweetheart deal from a scared school board that checked its business brains at the door. That’s no way to run government and certainly no way to run schools.

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