AM News: Cuts, Protests, Pension Changes

CPS will notify principals of preschool
closures on Monday
Catalyst:  When elementary school principals receive their school
budgets on
Monday, many will find out that their Preschool for All programs will
close at the end of the current school year....Parents Protest Free Preschool Cuts 
Fox Chicago:  Another budget battle is taking place Wednesday at
the Chicago
School Board... CPS students call for healthier lunches ABC7: 

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Schools CEO Ron Huberman said an
announcement
will be made in the near future regarding changes to food service
that's in place for next year...Cash

crunch hits more schools Sun times:  School
systems all over Illinois are in deep financial trouble. On Wednesday,
the state Board of Education identified which ones are hurting the
most...Two-Tiered Pension System Moves on to Quinn
Statehouse News:  Both the Illinois House and Senate on Wednesday
overwhelmingly passed a
controversial proposal that would establish a different pension system
with slimmer benefits for new public employees...Lawmakers Look For Opt-Outs On School Mandates
Statehouse News:  Students learning to drive at Moline High
School have a course they can practice on behind the school...Woodlawn community makes 'Promise,' seeks federal money Defender:  A burgeoning community organization dedicated to
improving the educational quality of children who live in the Woodlawn
community seeks $25 million from President Barack Obama's Promise
Neighborhood program to carry out its mission... New faces expected on South Loop, Skinner local school councils Chicago Journal: Following
several months of discussion about how South Loop School will
address its increasingly crowded halls and classrooms, 12 people are
running for six parent seats on South Loop's council. 

Filed under: Daily News Roundup

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  • I hope CPS teachers and other members of the pension fund realize what happened in Springfield last night when the pension amendment passed. The pension fund was due payments from the CPS under the prior law of $587 million in 2011, the amended law requires CPS to pay only $187 million , $603 million in 2012 now CPS must only pay $192 million , $620 million in 2012 now CPS must pay $196 million.

    By my math the fund will be shorted $1.2 billion over three years and could eventually become insolvent. (All the projected payments used in this post come from a CPS power point presentation on the FY 11 budget given eariler this year.)

    Rod Estvan

  • In reply to Rodestvan:

    That is very scary, Rod.

    It also means that the projected deficit for next year will be reduced by $400 million. CPS overstates its projected budget by $400 million every February when compared to the eventual budget it passes each August.

    So, that $1 billion is reduced to $600 million after accounting for that over statement. It is reduced by $400 million due to the recent pension legislation. That brings the projected deficit for next year down to $200 million.

    $1,000,000,000 projected deficit
    $ (400,000,000) overstatement - annually for 8 years
    $ (400,000,000) pension payment relief via recent legislation
    ------------------------------------
    $ 200,000,000 actual deficit

  • In reply to Rodestvan:

    "Reform the CTPF" is wrong. Senate Bill 1946 outlines a two-tier pension system that changes benefits for anyone hired by CPS on or after January 1, 2011. The bill does not change benefits for current CTPF members. Senate Bill 1946 adds a new section to the Pension Code that will apply to anyone first hired in a position covered by the CTPF on or after January 1, 2011. The bill makes significant benefit changes for those individuals, including a raising in minimum retirement age from 62 to 67, an increase in the vesting benefit from 5 to 10 years of service, and limits on the annual cost of living increase.

    The new law will increase the CPS long-term pension indebtedness by more than $15 billion. The CPS effectively will have until 2060 to make good on what it owes the fund. In June of 2009 the CTPF had approximately $8.4 billion avaiable for benefits, in June of 2008 it had $11.4 billion. In 2008 the fund was paying out $904.8 million a year, and employees contributed into the fund $172.5 million during that year. So it is clear how important the CPS, and state contribution to the fund are along with the fund's return on investments.

    It will be interesting to see if more CPS teachers retiring will elect to take a refund of their contributions and forfeit future pension and benefits because of fear related to what the General Assembly has just done.

    Rod Estvan

  • In reply to Rodestvan:

    I am going out of state to visit my father for spring break. He is lonely because his partner of 55 years, my mother, passed away a few years ago. He is also a victim of one of the biggest pension defaults in U.S. history

  • In reply to Rodestvan:

    Well I told you so! CPS won't have to pay the CTPF $1.23 billion over the next three years (2011-2013). CPS has received over $2 billion that didn't go to the CTPF since 1995 and CPS has ONLY paid the CTPF since 2005 $253 million. That means CPS hasn't paid or did receive $1.23 billion + $2 billion= $3.23 billion minus paid to CTPF $253 million= $2.28 billion profit CPS made on receiving or not paying money to the CTPF!

  • In reply to Rodestvan:

    Public Sector Budgeting (PSB) for FY11 will not go live on Monday, March 29, 2010 as previously announced. However, this is good news because the budget office is making (positive) adjustments in the budget right now. It looks like the earliest that schools will receive their budget is late next week.

  • In reply to Rodestvan:

    Kevin B. Huber, Executive Director for the Chicago Teachers' Pension Fund (CTPF) wrote a commentary today in the Chicago Sun-Times on page 26. Some of the comments Kevin made were, "The Illinois General Assembly passed Senate Bill 1946 on March 24. The bill includes a two-tier pension system and dramatically cuts pension funding for Chicago's teachers. ... underfunding pensions is universally recognized as a dangerous precendent. The bill cuts critical pension funding for the Chicago Teachers' Pension Fund by more than a billion dollars over the next three years, while increasing the Chicago Public Schools long-term pension indebtedness by more than $15 billion. CPS sought and received budget relief from the Illinois Legislature in 1995. This costly measure redirected more than $2 billion in pension funding directly into the CPS operating budget. CPS did not contribute to the pension fund for a decade nor did it adequately plan for future pension contributions. Pushing pension debt into the future only exacerbates a difficult situation. We can't continue to balance budgets for CPS and the state by mortgaging retirement pensions."

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