In Chicago, the city that was the setting for Ferris Bueller’s famous day off, more than 300,000 children who attend Windy City public schools are on their ninth consecutive day of involuntary truancy as a result of the most recent Chicago Teachers Union (CTU) strike.
“Strike threats are not uncommon in Chicago,” Mailee Smith, director of labor policy at the Illinois Policy Institute, explains. “CTU has a long history of walking out on the over 370,000 children in Chicago Public Schools, with the union orchestrating two of the nation’s largest public employee strikes in the past decade.”
Over the past two weeks Chicago public school teachers have taken to downtown streets, urging Mayor Lori Lightfoot (D) to agree to their demands, the foremost being higher salaries. Mayor Lightfoot has already agreed to raise taxes to fund higher teacher pay, but that has proven insufficient for union negotiators.
“In a contract proposal that the union rejected, the mayor offered a 16% pay raise over five years,” writes Trey Kovacs, labor policy analyst for the Competitive Enterprise Institute. “But the CTU demands a 15% raise over three years.”
In her budget address delivered at Chicago City Hall last Wednesday, October 23, Mayor Lightfoot outlined the new tax increases she is proposing as a way to address the city’s more than $800 million deficit, which Mayor Lightfoot referred to as a “historic budget deficit.”
The new round of tax increases proposed by Mayor Lightfoot, which she referred to as a “down payment” and the “first step in a long journey” toward getting Chicago municipal finances back in order, include following:
- A 100% restaurant tax hike, with the rate doubling from 0.25% to 0.50%.
- A tripling of the tax paid Chicago residents and visitors who use Uber, Lyft, and other ride-sharing services in certain areas of the city during peak hours.
In discussing her proposal to double Chicago’s restaurant tax, increasing the rate from 0.25% to 0.50%, Mayor Lightfoot described her proposed 100% restaurant tax hike and tripling of the ride-sharing tax as “modest.” Lightfoot went on to say that her proposed tax hikes “may seem small.”
The restaurant and ride-sharing tax hikes proposed by Mayor Lightfoot may seem small to folks in her administration and to teachers union bosses who want even more taxpayer money, but tax rate hikes of 100% and more are objectively not small and will adversely affect Chicago employers, particularly small businesses in the food industry that operate on thin margins.
Even before adding new taxpayer-backed spending commitments, Chicago Public Schools are already in a precarious financial situation, Truth In Accounting explains:
“CPS officials have made repeated financial decisions that have left the school district with a debt burden of $17.1 billion. That burden equates to $18,900 for every Chicago taxpayer.”
The crux of Chicago schools’ problems are the unfunded and unsustainable retirement obligations to which politicians have committed taxpayers over the years.
“Of the $26.8 billion in retirement benefits promised,” Truth In Accounting notes that “the school district has not funded $13.4 billion in pension and $2.3 billion in retiree health care benefits.”
Chicago teachers are striking to demand a pay raise funded by taxpayers, many of whom earn far less at work than do Chicago public school teachers.
“Nearly 60% of college-educated Chicago workers earn less than the current median Chicago teacher salary of $75,000, data from the U.S. Census Bureau shows,” writes Smith, who summarizes the taxpayer cost of the union’s demands:
“In total, CTU’s demands will cost taxpayers more than $1.1 billion over three years. If the union gets its demands and they are all paid through property taxes, the average Chicagoan will see a $235 hike in their tax bill. Lightfoot’s offer would raise property taxes $13. The average teacher’s salary would close in on $100,000, with seniority factored in.”
The longest teachers strike in Chicago history, which had kids out of class for 19 days, occurred in 1987. The current strike has already lasted longer than the 2012 strike, which lasted seven days, and its end is nowhere in sight.
“We put everything we could, responsibly, on the table, in an attempt to get a deal done. But we have no deal to announce today, and for that I am terribly disappointed,” Lightfoot said.
Mayor Lightfoot called the deal rejected the CTU “the most generous in CPS history” and points out that it would have the average Chicago teacher “making six figures in just a few years.”
Mayor Lightfoot said she is “enormously disappointed that CTU simply cannot take yes for an answer.” While the strike continues, thousands of parents across Chicago will continue to have to scramble to make daycare arrangements, students will fall further behind in their studies, and kids attending Chicago schools will be punished in other ways (such as the dozens of school teams forced to forfeit their state playoff games and thus have the CTU strike end their seasons).