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Behind smokescreen of 'Republicans did it!'... Illinois House Speaker Michael Madigan renews attack on teacher pension funds... Democrats' Wall Street agenda working to replace all defined benefit pension plans with defined contribution plans to enrich financial oligarchs

For the second year in a row, Illinois House Speaker Michael Madigan, ostensibly a Chicago Democrat, is encouraging legislation to undermine the defined benefit pension plans of Illinois teachers, with the Chicago Teachers Pension Fund (CTPF) his particular target. This year, he is using the Illinois Republicans in the House of Representatives as his camouflage. Madigan, whose daughter is Illinois Attorney General, has long received support from the teacher unions, despite his longstanding hostility to public school teachers and, many say, public education.

Chicago teachers are beginning to realize that Illinois House Speaker Michael Madigan, although a Democrat, has long been an enemy of Chicago teacher pensions, their union, and the city's public schools.Last year, House Speaker Michael Madigan (D-Chicago) engineered a raid on the Chicago Teachers Pension Fund (CTPF) that cost Chicago educators $1.2 billion and for the first time in the more than 100 year history of Chicago teacher pensions created two tiers among teachers for pension purposes.

The raid, in April 2010, created a two-tiered pension system so that teachers hired beginning January 1, 2011 are facing much worse pension situations than those currently working (or those already on pension). Pension experts note, however, that Madigan's moves negatively impacted and impacts all new Chicago Teachers.

That 2010 law, Senate Bill 1946, brought to the Illinois House floor and voted on in a matter of hours, effectively gave the Chicago Board of Education a $1.2 billion dollar “pension holiday” which has had a massive negative impact on the solvency of the 53,000 member CTPF. The April 2010 raId, which was engineered by the Chicago Public Schools, also had the support of Illinois Senate President John Cullerton, ostensibly also a Democrat. It came about after Illinois politicians accepted the claims of former Chicago Public Schools Chief Executive Officer Ron Huberman that CPS was facing a "deficit" of "up to one billion dollars. Both Cullerton and Madigan accepted Huberman claim, even though subsequent events showed that the "deficit" had been caused mainly by a manipulation of CPS budget numbers (CPS routinely inflates expenses and underestimates revenues at this time each year to create a "deficit crisis"; this year the "deficit" — created the same way — is "$720 million").

Now, adding insult to injury, it appears that House Speaker Michael Madigan and House Minority Leader Tom Cross (R – Oswego) are at it again, according to sources at the Chicago pension fund. As early as Thursday, May 12 (although possibly deferred until early the following week), Madigan and Cross intend to run a new bill that changes the benefits for current employees. According to the current legislative proposal (not quite fully shaped, but soon to be inserted into a Pension Bill —currently an amendment to SB 512) current employees will have three "options" beginning in June 2012:

OPTION ONE: Teachers may remain in the current plan and pay a considerably higher employee contribution (possibly as high as 15 percent);

OPTION TWO: Teachers may move to the new "Tier II" plan passed last year for new employees.

Tier II reduces benefits dramatically (retirement age increases, COLA changes, using 8 years instead of 4 for average salary for pension purposes, etc.) and pay the same 9% contribution;

OPTION THREE: Chose to have an employer contribution (6%) made to a separate "Defined Contribution" plan along with your employee contribution.

Observers who asked to remain anonymous told Substance that the evidence from Illinois is that Democrats and Republicans, led by Madigan, are engineering the destruction of the defined benefit pension plan for Chicago teachers, working off what looks like a long term script. In 2010, under the guise of the "fiscal emergency" being hyped by Ron Huberman and the Chicago Board of Education, the first attack on Chicago's pension plan was completed by Madigan and Cullerton, with Republican votes. Despite claims that by CPS officials at the time that the three-year pension holiday Madigan promoted would keep things straight in the CPS budget, no sooner had the law been passed than CPS financial officials went about creating the second "deficit" and giving the Democratic leaders in Illinois the smokescreen behind which the attack on Chicago teacher pensions could continue.

What this means in real terms, according to those familiar with the situation who asked to remain anonymous, is that current contributors to the Fund will be paying six percent more of their salary to help offset the $1.2 billion shortfall to the fund that the Legislature created in April 201. (Alternatively, members can choose not to pay the 6% and choose instead option 2 or 3 and see a significant reduction in their pension) In short, teachers and principals who are CTPF members will see their paychecks permanently shrink by 6% because of this proposed new law or see their benefits significantly decreased).

Retired members were outraged when CTPF director Kevin Huber reported the new legislation to the Chicago Teachers Union retiree luncheon on May 11, 2011. Huber told the retirees, who packed the banquet hall at Magianno's on Grand Ave. in Chicago, that the legislation approved by Madigan needed widespread and active opposition. A number of those present reported that they had already began calling their legislators, with favorable responses.

Although militant teachers rejected the idea of putting the "Scab Rat" in front of the Chicago offices of Illinois House Speaker Michael Madigan in December 2010, Madigan's latest maneuvers against the Chicago Teachers Union and Chicago teacher pensions have resurrected the debate. Substance photo by Sam Schmidt.Some talked about a campaign of "NO MORE RAIDS." There is also growing sentiment to picket Madigan's southwest side Chicago offices, and possibly place the "Rat" there, exposing Madigan as as bad as the Republicans in his longstanding support for anti-teacher and anti-public school legislation in Illinois. An earlier discussion among Chicago teachers about picketing Madigan was postponed when he took no action in December on behalf of the "Performance Counts 2010" legislation supported by Chicago's billionaires and brought to the House by Stand for Children, Advance Illinois, the Civic Committee of the Commercial Club, and the Illinois Business Roundtable. Madigan, who represents Chicago's 22nd legislative district, has his Chicago offices at 6500 South Pulaski Road. His Chicago office phone number is (773) 581-8000 and his fax number is (773) 581-9414.

The CTPF is not funded in the same way the downstate system is funded, Huber noted for the retirees on May 11. The underfunding of suburban and downstate pensions is a function of the Illinois Legislature not being fiscally responsible for many years, he said in his remarks. Downstate teachers are all in the Teacher Retirement System (TRS), which has long been used as a piggy bank by Springfield. The Chicago Teacher Pension Fund (CTPF) is much more well funded, Huber said. But it, too, has taken a huge hit in recent years, as the Chicago Board of Education has not kept up with its obligations. Chicago Teachers Pension Fund took a direct hit from the legislature last year when the legislature saw fit to provide the Chicago Board of Education the $1.2 billion “break” from its obligations.

Earlier in the May 11 luncheon, Chicago Teachers Union Retiree Functional Vice President Jim Ward reported to the retirees on the recent lobbying efforts by the union in Springfield. Huber mentioned that the unity of the CTPF, Retired Teachers Association of Chicago, and CTU was unprecedented in recent times. In addition to Huber and Ward, those seated at the head table at the luncheon included Retiree chairman Patricia Knazze, a retired Chicago teacher and former CTPF trustee, and the head of RTAC.

For the time being, the actions to block Madigan's latest attack on Chicago public schools and the Chicago Teachers Pension fund is being limited to phone calls to both Republican and Democratic legislators. Whether retirees and others go further at Madigan's Chicago offices will be announced (and reported here at Substance).

The current proposed law is being advanced as a consequence of a “crisis” that the Illinois Legislature created for Chicago last year. Had the Legislature not passed SB 1946, none of this would have been necessary. CTPF members — both current teachers and Chicago retirees — are encouraged to call their Senators and Representatives and express their outrage at this latest legislative proposal. Substance staff will be working with organizers of this event to collate the responses. Reports on additional actions will be made at substancenews.net.

[Full disclosure: George N. Schmidt is a retiree delegate for the Chicago Teachers Union and is currently receiving a Defined Benefit pension through CTPF]. 



Comments:

May 12, 2011 at 9:18 AM

By: Bob Busch

Inch by inch they're taking it away

I began my career in 1969 right out of college. In those days the pension was different.

We received 1.6% for the first 20 years 2.2% for the next ten years and 3.3% for the

last eight years for a grand total of 78% after 38 years. This was changed to a 2.2%

each year or 75%. Since I went 41 years, it cost me 3% already in lost benefits.

What is going on now is a classic example of the idea that “Yard by yard it’s hard

But inch by inch is a cinch.” Last year new teachers, this year current teachers and

soon retired teachers. Mark my words it will happen.

May 12, 2011 at 8:00 PM

By: Brian Yracheta

Personal protest on Chicago treatment of teachers

I have and will continue to do all of my spending outside the City of Chicago and walk three blocks to avoid spending a dime on a city meter. My own personal protest over the way the city treats people who work in education.

May 13, 2011 at 8:37 AM

By: Bob Busch

Today is their End Game

End game

I suppose you can make the case it began in 1988 with the passage of the Local School Council Act. Others will say it was in 1995 with the school reform act. Personally I feel

Today Friday May 13th 2011 would be the best date to declare the death of the Chicago

Teachers Union. As our profession slips into the same category as day labor it is time to ask ourselves, "How did this happen and what will come next?"

I think the isolation of the job combined with horrible working conditions and dangerous

schools have done a pretty good job of creating several categories of classroom survival.

We had the hard core professionals who walked around with paddles, and on the

other hand were those who paid the price of caring repay them with burnout. In both cases administrators just looked the other way. Both forms of passion had their price .

The union lost the game in my opinion because it failed to concentrate power locally.

A contract is a nice thing to fall back on but when the school delegate is not protected for

Trying to enforce its provisions it has little effect on the classroom. Just look at the class

size provision, enforced where? We attempted to be partners when we should have been enemies

Or better yet leaders in real educational progress instead of bitching we should have moved.

Now that the union has been flailed what is the end game ?

Chaos , rampage, and ruin will inevitably result from this latest attack on public education

But who will the public blame then? Us as usual

May 16, 2011 at 9:41 PM

By: Glen Brown

Pension Reform

Besides other egregious changes to the teachers’ pension, with the creation of a Second-Tier, teachers hired after January 2011 cannot receive their pension benefits until they are 67 years old; this is the highest retirement age in the nation.

Teachers were stunned last spring when Senate Bill 1946 passed in less than 12 hours. “It is estimated that [the Teachers’ Retirement System’s new] Tier-Two benefits will be 30 percent less than benefits for Tier-One teachers, if the final average salary and creditable service time for both are equal” (Illinois Education Association, IEA); moreover, teachers retiring with “10 years of service credits under [the] Tier Two [plan] would actually earn more benefits from Social Security” (IEA).

What could be the effects if Senate Bill 105 (now SB 512) proposed by Senator Chris Lauzen, et al and HB 149 proposed by Representative Tom Cross, and others are also passed this spring? Even without discussing the third incongruous part of this “fire-breathing” Chimera, which also includes a Tier-Three Defined-Contribution option, presumably, many young teachers will not continue to work in Illinois and roll over their pensions when the opportunity arises. Furthermore, the “best and brightest” teacher candidates will either not major in education, or these young aspirants will find teaching positions in other states, where the education of children and their teachers are valued. Thus, teachers in Tier One will lose an essential financial resource needed for pension sustainability, perhaps the unstated objective for those legislators who want to challenge (the Pension Clause) Article XIII, Section 5, of the Illinois State Constitution.

What other consequences are there for having the worst teachers’ pension plan in the country? Students across Illinois will be deprived of receiving an excellent education from the best teachers available, and they will all become the unintended victims of this injustice and charade.

May 17, 2011 at 9:48 AM

By: Bob Busch

Young Blood

The Bright Side Of The Great Recession

I will call him Phil he came out of a alternate teaching mill with his degree from a prestigious university and began teaching a couple of years ago.

He was given 5 classes of AP and IB math. Not bad for a kid without one second

of teaching experience. He was also very cocky and had a smart mouth. Many of these youngsters who came into the profession recently seem to have a superiority complex towards us old goats. This year he got all regular classes, and now he is trying to get out as fast as he can — something about stress.

I only tell this story to point out that these recession kids will be gone as soon as

they can. Hard times have given the powers that be a false sense of endless supplies of young graduates to choose from. As soon as times improve the market will reflect the wisdom of all our reform legislation and this state and city will be begging for teachers.

May 18, 2011 at 1:39 AM

By: John Kugler

CPS Accelerates Blacklisting

the newest tactic by the Board is to DNH new teachers I have at least 20 that I know of. The plan is to destroy the careers of young teachers to drive home the ultimate fear of complete blacklisting from the teaching profession. For example, what about the young teacher that wants to help out in the inner city buys a condo in the city gets a job in a turnaround school that then gets a directive to fire as many teachers as possible? Now non-renewed PAT for the second time or some falsified evaluations the district puts a DNH ("Do Not Hire") designation on this teacher. This is a true story happening all last week and this week to our brothers and sisters. The strangest thing is that even these teachers are not filing grievances because they "do not want to start any trouble"!

Kugler Axiom #1 — You can only get blacklisted once!

July 13, 2011 at 4:33 AM

By: John Kugler

Madigan gets Tricked by Slicksters

Edelman's talk, which he gave at the Aspen Ideas Festival on Tuesday, June 28, is a narrative of how Stand for Children systematically chose its political allies in the Illinois, invested over $600,000 in nine state legislative races, raised another $3 million, and exacted concession after concession from the state's teachers unions.

At first, he explains, Stand saw an opportunity when the Illinois Federation of Teachers turned against all-powerful House Speaker Michael Madigan over Madigan's passage of pension reforms in 2010. The IFT had been a reliable supporter of the Speaker and many of his supporters in the legislature, but it withheld all its endorsements that year from those who had voted for the pension bill.

Guessing presciently that Madigan and his House Democrats wouldn't be caught up in the national Republican wave of that year, Edelman decided to position Stand for Children on his side, hoping to curry favor post-election.

In one of many surprisingly forthright moments, Edelman describes how Stand chose who to back in the midterms:

I’m being quite blunt here. The individual candidates were essentially a vehicle to execute a political objective, which was to tilt toward Madigan. The press never picked up on it. We endorsed nine individuals – and six of them were Democrats, three Republicans – and tilted our money toward Madigan, who was expecting … that all our money was going to go to Republicans. That was really an show of – indication to him that we could be a new partner to take the place of the Illinois Federation of Teachers. That was the point. Luckily, it never got covered that way. That wouldn’t have worked well in Illinois – Madigan is not particularly well liked. And it did work.

July 13, 2011 at 2:09 PM

By: Rod Estvan

Speaker Madigan less than happy with Edelman comment

In today's Chicago Sun Times there is a story about the Edelman tape. In a very interesting comment the Speaker's spokesman Steve Brown was quoted as saying: “I don’t know anyone that doesn’t like Mike Madigan.”

This was an obvious response to Mr. Edelman who stated in his presentation "Madigan is not particularly well liked." A rather amazing thing for someone running a PAC to say.

There is a rule of practice in Springfield that goes back beyond the time of Pate Philip when he was minority leader in the House - What the Speaker giveth the Speaker taketh away.

Rod Estvan

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