Daley: Taxpayers 'double-taxed' for teacher pensions
Chicago taxpayers are being “double-taxed” for teacher pensions, setting the stage for a $43 million school property tax increase, Mayor Daley charged Wednesday.
Daley said he gave Schools CEO Ron Huberman the green light to raise real estate taxes — but not by the maximum allowed by a property tax cap — because it was the only way out of the pension dilemma created by the General Assembly’s double-standard.
“We pay a double-tax. The pension is picked up by state government for all teachers outside Chicago. As a taxpayer in Chicago, you pay a tax there. Then, you pay another tax because the state excludes Chicago teachers. So, you’re paying two pension taxes: one for the state and one for the city,” Daley said.
“We’re the only, only local government doing that in the whole state. That puts a huge burden upon the school system. ... You’re paying two taxes. This is really unfair and we have to do something about it immediately.”
To close a $475 million budget gap at the Chicago Public Schools, Huberman wants to raise property taxes by $43 million. It would add $18 to the bill paid by the owner of a home valued at $262,000.
Huberman lowered the boom on beleaguered homeowners to satisfy a teacher pension payment that will balloon from $177.8 million to $307.5 million this year and $536 million by 2011.
Exacerbating the problem is a teacher contract that calls for four percent pay raises in each of the next two years.
On Wednesday, Daley stopped short of urging teachers to forfeit those raises. But, after wringing furlough days and other cost-cutting concessions from most of the unions representing city workers, he left little doubt that teachers would be asked to join the call for shared sacrifice.
Alternatives include teacher layoffs, pay cuts, increases in class size or a reduction in pension contributions.
“Here in the city of Chicago, we’ve asked people to take 12 to 15 days off without pay because everybody has to chip in with regard to the recession. You can’t allow people [to remain] outside the boat,” the mayor said.
“You have to do more with less. We see that in the private sector. You have to see it in government. Everybody has to maybe roll up their sleeves and work a little harder… No one is an exception to anything.”
Pressed on whether teachers should forfeit their four percent pay raise, Daley said, “I don’t know. … That’s up to Ron and [School Board President] Michael Scott to negotiate this, just like we worked with the trades. ... You have labor contracts. You have to respect that. You have to work within that.”
But, he said, “Everybody else is dieting on their [spending]. We have to get the rest of the government — the county, the state, the federal government and other agencies — to realize they have to start dieting in regards to the financial crisis. It’s not just for Chicago. It’s all over the country.”