Federation backs CPS tax hike, changes to teachers’ pension needed
By Sandra Guy Business Reporterfirstname.lastname@example.org August 22, 2011 1:38AM
Updated: August 22, 2011 1:42AM
The Civic Federation on Monday will support Chicago Public Schools’ $150 million tax increase because the school system has shown good faith in significantly cutting its budget, but it will call for dramatic changes in the teachers’ pension system to deal with expected future budget crises.
If teachers are to keep what Civic Federation officials and budget experts consider their unaffordable retirement benefits, the teachers’ contributions to their pension funds would have to skyrocket from 2 percent to as high as 60 percent, for example.
Secondly, retired teachers’ automatic 3-percent yearly increase in their pension payments would have to be changed to either the federal consumer price index percentage or 3 percent, whichever is less.
A third recommendation calls for teachers, who may now retire at age 55 with 34 years of service, to wait until age 67 to receive their full retirement benefits.
The non-partisan research group is also calling on the Chicago Public Schools to merge its teachers’ pension fund into the statewide teachers’ retirement system and move its non-teaching employees into the Illinois Municipal Retirement Fund.
“The (Chicago Public Schools’) growing financial storm offers frightening evidence that CPS cannot afford its existing pension system,” said Civic Federation President Laurence Msall.
“District officials must articulate a plan to address this pending fiscal crisis immediately,” he said. “If nothing is done, the pain and controversy of the fiscal year 2012 budget will seem mild in comparison to the massive cuts in personnel and services that will be necessary to balance the budget in fiscal 2014.”
The Civic Federation’s recommendations mirror those of a proposal awaiting action in the state Legislature.