Chicago Teachers Union Helping City’s Economic Downturn
Chicago Teachers Union (American Federation of Teachers) relentless demands for more and more is contributing more and more to the economic downfall of the Windy City. The fact that businesses are making their home in Chicago and people are moving back into the city seem to have less effect than the outrageous monopoly bargaining demands of CTU president Karen Lewis. Monica Davey and Mary Williams Walsh have the story in the New York Times.
The pension fund for retired Chicago teachers stands at risk of collapse. The city’s four funds for other retired city workers are short by $19.5 billion. At least one of the funds is in peril of running out of money in less than a decade. And starting in 2015, the city will be required by the state to make far larger contributions to the funds, which could leave it hundreds of millions of dollars in the red — as much as it would cost to pay 4,300 police officers to patrol the streets for a year.
“This is kind of the dark cloud that’s coming ever closer,” Mr. Emanuel said in a recent interview, adding that he had no intention of raising his city’s property taxes by as much as 150 percent — the price tag, he says, that it might take to pay such bills. “That’s unacceptable.”
Illinois lawmakers, who make key financing and benefit choices for Chicago’s pension system, have wrestled for months without agreement on the politically troublesome matter of cutting the benefits of public sector retirees to save money. And last month, Moody’s Investors Service downgraded Chicago’s rating by an unexpected three notches as part of a broad reassessment of how pensions are affecting the financial strength of cities. That “super downgrade,” in the parlance of the bond market, left Chicago, the nation’s third-largest city, with a lower rating than 90 percent of Moody’s public finance ratings.Public sector union leaders have been enraged by Mr. Emanuel, who was at the helm in 2012 during this city’s first teachers’ strike in 25 years and who has announced plans to phase out city health care coverage by 2017 for some city retirees. A change in pension benefits could affect more than 70,000 people who worked as Chicago police officers, teachers, firefighters and others, and who now receive average annual benefits ranging from about $34,000 for a general-services retiree to $78,000 for a former teacher with 30 years of service.
