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Teacher deal could lead to property tax hikes, school closings, layoffs

Bruce Rauner Laurence Msall | Ramzi Dreessen - Suntimes

Bruce Rauner and Laurence Msall | Ramzi Dreessen - Suntimes

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Updated: October 17, 2012 6:36AM

Four years of up-to-the-limit property tax increases for Chicago homeowners and businesses. Closing scores of under-enrolled and underperforming schools. Thousands of layoffs of teachers and other school staff. More cuts to the central office.

That’s what could await the Chicago Public Schools, thanks to the tentative agreement between teachers and the district that is expected to put an end to the five-day teachers strike.

Civic Federation President Laurence Msall said the 16 percent pay raise included in the tentative agreement will almost certainly trigger massive layoffs and scores of school closings.

Every 1 percent pay raise carries a $20 million price tag. That means the cost of the raises could be as high as $320 million over four years — although it could be less after retirements and cost-saving provisions of the agreement are factored in.

“By agreeing to raises in excess of the budget when you have no reserves, that pretty much guarantees that you have to reduce your personnel and the number of teachers and schools in the system,” Msall said.

“They will have to eliminate under-enrolled and underperforming schools. I don’t know where else you could get the money. We are very concerned that the district did not have a plan for how it could accommodate any salary increase above 2 percent and did not have a plan to address the major components of the $1 billion shortfall it projects for next years.”

Ald. Howard Brookins (21st), chairman of the City Council’s Black Caucus, said the teachers union has been sounding the alarm about 100 school closings, but he’s “never heard that number from anybody from CPS” or the mayor’s office.

“Naturally, some of the schools will close [given] the percentage of population that is leaving Chicago,” Brookins said.

“Where some of the schools were physically located, the population has shifted away where you may need to open new schools in different areas,” he said.

The $5.7 billion budget approved by Mayor Rahm Emanuel’s handpicked school board included a $41 million property tax increase, earmarked 2 percent pay raises for teachers and $76 million for charter schools and drained every last penny of reserves to do it.

The $40 million for teacher raises was subsequently diverted to hire 477 teachers needed to staff Emanuel’s last-minute, longer-school-day deal, so elementary school teachers don’t have to work a minute longer.

Three more years of up-to-the-limit property taxes are virtually guaranteed by the new contract. But even that won’t be enough, Msall said.

“In this relatively low inflationary environment, even if CPS chose to raise the property tax to the maximum [for four years], they will still need to make very significant cuts just to fulfill the salary demands,” he said.

“Mostly, it’s going to be a restructuring to a smaller school district,” Msall said. “They’ve known for a long time they had under-enrolled schools, many of which are underperforming. There can be significant savings from closing those schools.”

All week long, Emanuel has bobbed and weaved when asked how he would pay for the 16 percent pay raise, if the CTU ultimately agrees to that.

That has led to rampant speculation that CPS intends to close more than 100 underutilized schools, laying off thousands of teachers and underscoring the need for a teacher recall policy that gives laid-off teachers a second chance.

Asked Wednesday how many schools he intends to close, Emanuel said, “Nobody knows yet because we haven’t worked through this issue yet. There have been other issues ahead of that. That has not been decided at this point. I don’t know what they’re gonna do for consolidations.”

Pressed further on how he intended to pay for the agreement, the mayor never answered directly.

“First of all, the first $50 million for the hiring of the [477 new] teachers was in the budget as it related to the salaries. There are other changes we made throughout the system,” Emanuel said.

“As you know, earlier also the board made a decision as it related to reserves to work through the contracts and drain ’em,” he said. “Some people criticized the action from a fiduciary standpoint. But from an educational standpoint, it helps us achieve that goal.”

In addition to property tax increases, school closings and layoffs, the mayor is likely to declare another tax- increment financing surplus for the schools.

The 2011 city audit shows Chicago’s 159 TIF districts had a collective balance of $1.4 billion, although the actual surplus would be far less.

Last year, when the mayor declared a TIF surplus of $60 million, half of it — or $30 million — went to schools.

And, sources said, Emanuel is counting on pension reforms to which teachers and other public employees have not yet agreed. Pension reforms also need approval from the Illinois General Assembly, which is stalemated on the issue.

The school closings are certain to stir political controversy as they always do because of fears that students forced to travel farther to school, sometimes across turf claimed by rival gangs, could be in danger.

“I’m afraid of decisions on closings impacting the lives of children and the safety of those children,” said Ald. Willie Cochran (20th), vowing to fight to keep “all my schools” open.

“It’s already been proven that some of the schools that have closed in Englewood — like Englewood High School — and moving those children to different schools crossing [gang] territory has resulted in children getting exposed to violence,” he said.

Cochran added, “That’s the drawback of the negotiations ending on a note that’s palatable for the board and the teachers union. We’ll have school closings and people losing jobs as a result. Schools with small class size — something that’s positive and a good learning environment — will be viewed as reasons to close.”

Ald. Danny Solis, chairman of the City Council’s Hispanic Caucus, is hoping the schools in his ward are protected by Hispanic population gains.

Asked if he’s concerned about school closings, Solis said, “In some parts of my ward, yes. But we will try to deal with it. I don’t foresee it happening in my ward.”

Contributing: Rosalind Rossi

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