CTU members vote on contract deal that ended teachers strike
By ROSALIND ROSSI Education Reporter October 2, 2012 7:15AM
Karen Lewis, president of Chicago Teachers Union with protesting students at Dyett High School, 555 E. 51st Street, CTU President casted her vote as teachers across the city vote to ratify the new teachers contract, Tuesday, October 2, 2012 . | John H. White~Sun-Times
Updated: November 4, 2012 6:12AM
Yet another rating agency downgraded Chicago Board of Education bonds Tuesday, citing the $74 million annual expense of a new teachers contract just as teachers across the city voted on whether to ratify the deal.
The action by Fitch Ratings followed last week’s decision by Moody’s Investor Services to downgrade the district’s bonds for the second time in less than three months.
In dropping its rating one notch, from A + to A, Fitch said the new teachers contract “results in considerable increased costs to the Chicago Public Schools’’ at a “time of highly stressed operations.’’
Fitch said that even before the deal ended the first teachers strike in 25 years, CPS planned to drain district reserve funds to balance this school year’s budget. Plus, Fitch noted, the system is anticipating a $1 billion deficit next school year, due to a “dramatic jump’’ in pension costs and the expiration of a pension relief package.
Fitch Inc. managing director Amy Laskey said Tuesday that during Fitch rating interviews, CPS officials outlined a plan to pay for new teacher raises, estimated to cost up to $295 million over four years. The plan, she said, was “confidential.’’
The downgrade in $6 billion in Board of Ed bonds does not mean that plan is not viable, Laskey said. But it does mean “we felt their financial flexibility was reduced by the settlement and what they were planning to do to pay for it.’’
“The need to pay this contract makes [the Chicago Board of Education’s] financial stability a little weaker” but “they are still at an A, which is still a very good credit rating,’’ Laskey said.
In a statement released Tuesday, the district said CPS is “facing both an educational and financial crisis after years of revenue losses and misplaced priorities.”
The statement added that CPS had cut more than a half-billion dollars in spending outside the classroom yet it has “many more tough choices’’ to make.
Last week, for the second time in less than three months, Moody’s downgraded Chicago Board of Education bonds — from A1 to A2. It, too, cited the added expense of a new teacher contract. An earlier Moody’s downgrade, in July, was tied to CPS’ decision to drain its reserves to balance its budget.
CPS officials and Mayor Rahm Emanuel have refused to say how the district will pay for a deal that will bring teachers annual raises of 3 percent, 2 percent and 2 percent, followed by an optional fourth year at 3 percent. The agreement suspended a seven-day teacher strike.
Before the strike began, Emanuel said he would not pay for teacher raises at the expense of new funding planned for charter schools. Even so, charter operator Juan Rangel, CEO of the United Neighborhood Organization, planned a massive rally of pro-charter parents Tuesday at the University of Illinois-Chicago forum.
“We want to make sure the contract isn’t paid for on the backs of charter schools,’’ said Rangel.
Meanwhile, up to 30,000 Chicago Teachers Union members voted Tuesday on whether to ratify a deal that outlined new layoff procedures and softened some of the more onerous parts of a new teacher evaluation system. Both elements were critical to teachers concerned about being displaced by school closures, consolidations and phaseouts.
As she emerged from voting at Dyett High School, CTU President Karen Lewis refused to predict if the tentative contract would pass union muster.
To be ratified, a simple majority of those who vote must approve the deal — a far lower bar than the 75 percent of all union membership needed to go on strike under a new Emanuel-backed law.
“My hope is it will pass, and we will move on,” said Lewis.
She refused to say if she cast a “yes” or “no” vote but did say “I voted my conscience.’’