Ted Dabrowski and John Klingner outline the new ridiculous Chicago teachers contract:
Coverage of the Chicago teachers strike focused largely on the contest of wills between a new mayor vs. a combative teachers union. But now that’s its over, the cost of the contract is finally being tallied and it totals at least $1.5 billion over five years – money the junk-rated district simply doesn’t have. It’s the most costly teachers contract in CTU history, and that’s even before the cost of pensions is considered. CPS has yet to utter a word about increased pension costs.
Just two to three years ago, CPS faced a true liquidity squeeze. Its position was so weak it actually borrowed to cover its debt payments. Only a state bailout — more money from a favorable new funding formula and a pick up of the district’s $220 million in normal pension costs — got CPS out of its mess. Now, the costs of this new contract set CPS back on the path it was on two years ago. And it accelerates the district and the city’s slide towards bankruptcy.
Wirepoints has run an initial estimate of the contract’s costs using the 41-page agreement and the limited data publicly available. The cumulative 5-year costs total $1.4 billion, though that estimate doesn’t include the value of many benefits due to a lack of data: sick day accumulation, additional health care benefits, stipends for support staff, and more. It also does not include how much the district’s pension liabilities will go up as a result of the contract — what Mayor Lightfoot calls the “most generous” ever.
Wirepoints’ cost estimate includes Mayor Lightfoot’s original offer of 17 percent raises across the board, additional raises on top of that for select workers, and the hiring of hundreds of new support staff. The contract will cost Chicago an additional $500 million a year by 2024.
Read more: Wirepoints