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City may not be able to pay teacher pensions

While the debate continues in Springfield, Chicago Mayor Rahm Emanuel said Monday that the pension payments for the Chicago Public School teachers may not be made at the end of the month.

Emanuel said that the city is at the Òbreaking point” and may not be able fulfill their pension payment requirement by the Tuesday, June 30 deadline.

The mayor said that if the pension payment is made in its completed form, the city essentially could may have problems paying it.

ÒThis is the end result of decisions and no decisions made over 20 years,” said Emanuel.

New legislation was filed in Springfield on Tuesday to establish a pension holiday until Aug. 10.{{more}}

The Chicago Teachers Union responded to that with a written release.

ÒOur labor agreement with the Board expires next Tuesday. Chicago’s public school educators are united in their belief that the $634 million payment must be made as required by law; that we receive a fair contract that will improve both learning and working conditions in our buildings; and, that our schools must open in the fall.

ÒUnderstanding that Chicago Public Schools is broke on purpose, the CTU continues to offer its expertise in working with CPS and the mayor toward finding a long-term solution for operating the school district and meeting the district’s pension obligations without massive layoffs and more closed schools. We continue to be dismayed at the Board’s refusal to even look at the multitude of progressive revenue options available. A mini pension holiday is like putting a tiny piece of gauze on a hemorrhaging wound. If there is any light at the end of this tunnel, we want to make sure it’s not an oncoming train.”

Meanwhile, Emanuel is looking for a reprieve and hopes that can come from Springfield.

CPS was going to request this past Wednesday that the Chicago School Board approve another $1.1 billion of borrowing against future tax revenue.

This comes after a report from the Ernst & Young accounting firm that has stated that CPS will run out of money by the end of the summer.

Cook County Clerk David Orr released 2014 property tax rates on June 18 for the county’s more than 1,400 taxing agencies, the final step in the tax process before bills are mailed out.

The average homeowner in the city of Chicago and the northern suburbs will see their tax bill increase slightly, while the average homeowner in the southern suburbs will see a slight reduction in their tax bill.

Chicago homeowners will pay about $90 more in property taxes this year, according to Orr.

Orr said on June 18 that taxes will rise in part because of a tax hike necessary for Chicago Public Schools.

In the south suburbs, residential tax bills will on average will be 1.0 percent lower. In the north suburbs, there will be an average increase of 2.4 percent, and most Chicago homeowners can expect an increase in their bill of 2.8 percent.

Meanwhile, the tension continues between the CTU and the board. The CTU disapproves of the four new appointees to the board that were scheduled to be announced this past Wednesday.

Officials at CTU also claim that Dave Vitale, board president, had led the way for failed toxic interest rate swap agreements with Loop Capital, Bank of America, Goldman Sachs and the Royal Bank of America that will cost the district hundreds of millions of dollars.

ÒWith less than one week left until the expiration of the teachers’ contract with the Board and the approaching deadline of a pension payment to the Chicago Teachers Pension Fund, the CTU continues to demand a clean slate for CPS leadership Ñ starting with Vitale’s removal Ñ and an elected, representative school board,” CTU officials said in a written release Tuesday.

Emanuel knows a decision has to made quickly.

ÒWe need to find a solution that allows us to continued to what we need to do fiscally,” said Emanuel. ÒWe want to do it in a way not to endanger the classroom.”

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