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Chicago teachers should pay a fair share of their pensions

To rescue his city from utter financial collapse, Mayor Rahm Emanuel is resurrecting an old whine: You suburban and downstate folks are to blame, and now you have to fix it.

Chicago is the state's "economic engine," he said in several appearances, as if that is reason enough for Illinois taxpayers to ship more than $800 million to the city, including $480 million for its deeply underfunded teacher pensions.

It's a matter of seeking "pension equity," he said, meaning that Chicago Public Schools is the only system in the state required to fund its own teacher pensions. Illinois taxpayers pay for every other district's pension costs.

So, Emanuel's reasoning goes, why should Chicago have to pay for its own pensions, when no one else does?

Giving $480 million to Chicago isn't the only way to make everything fair. The state also could require that suburban and downstate schools pay for their own teacher pensions. End state-mandated pension standards for those districts, such as retirement age, and require each district to separately negotiate what they can afford. Save everyone some money.

That would make too much sense, and it won't happen because the powerful teachers lobby would much rather prefer to have (higher) statewide standards set in Springfield than have to negotiate pension benefits separately with hundreds of school boards.

Emanuel's equity argument also is faulty in another way: CPS already gets proportionately more state aid than other schools. According to the conservative Illinois Policy Institute, Chicago benefits from the way the state calculates how much financial aid it gives to CPS. Those technical and confusing formulas take into account such factors as poverty rate, attendance, special education and property tax levels.

All of those factors work in Chicago's favor, said Ted Dabrowski, the institute's vice president of policy. The whole state-funding scheme, he added, is "outdated, convoluted and political." And certainly not as easily described in a sound bite as Emanuel's fairness doctrine.

Dabrowski said in his study, "The current narrative is that historically CPS didn't have enough money to fund both teacher pensions and the classroom — that it had no choice but to shortchange pensions."

Not true, he said. His study, "CPS Pensions: From Retirement Security to Political Slush Fund," argues that revenues never were the problem. "Illinois and Chicago taxpayers contributed more than enough money to pay for both, had the funds just been properly managed."

For example, at CPS leadership's urging, the state legislature allowed the district to skip years of mandated payments into the pension fund. The Chicago Teachers Union objected but didn't do much to stop the diversions.

In reality, when it came to what the CTU most wanted in its 2012 strike, it chose pay increases over fixing the pension underfunding, which then stood at $8 billion. Higher salaries, in turn, increased pension obligations. As a result, Chicago teachers' lifetime earnings are among the highest for the nation's largest U.S. school systems, according to a 2014 analysis by the National Council on Teacher Quality.

Chicago Public Schools CEO Forrest Claypool asserted in an op-ed in Monday's Tribune that in the past five years, state funding of Chicago schools has declined while aid to other schools has "soared."

In reality, if you take a different time frame, it's the state funding of Chicago schools that has soared, according to Illinois Board of Education data cited by Illinois Policy Institute. Since 1998, state funding of CPS has grown at 1.5 times the rate of inflation. State and federal aid in fiscal year 2014 accounted for more than half of CPS revenue.

The battle over who's getting shorted — Chicago, the suburbs, collar counties or downstate — on school, transit and other state aid is an endless fool's game without clear winners. Chicago needs to look more to itself for answers. The policy institute suggests several worthy steps, such as teachers paying for their own pensions or switching to self-managed pension funds. Other ideas abound.

Even the whiff of that idea has the Chicago Teachers Union talking strike, as if they were facing destitution. Everyone else — from Chicago property taxpayers to state and federal taxpayers — is paying a reasonable and responsible share. It's time for Chicago teachers to do their part.

This column also appeared in the Chicago Tribune.

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