Beth Swanson and how CPS and City Hall manufactured the Chicago teachers 'pension crisis'... and have gotten away with the Big Lie about the 'billion dollar deficit' for seven or eight years despite every audit proving the deficit claim was a lie...

By the April 22, 2015 meeting of the Chicago Board of Education, the narrative about the so-called "crisis" facing Chicago Public Schools because of teacher pension obligations was virtually a matter of faith for most of those reporting (and being pundits) on the current realities of school politics, Chicago style. And as in most cases where matters of blind face collide with reality, blind faith and some kind of mindless gospel prevails -- for a time.

Back in July 2008, when she was Chicago Public Schools director of the Office of Management and Budget, Beth Swanson stood behind then Mayor Richard M. Daley during a City Hall press conference at which Daley outlined the "crisis" facing the city's public schools. That was the year the Board of Education upped the Magic Number projected "deficit" claim to $1 billion, a narrative that CPS has managed to continue ever since despite the fact that each year the end-of-the-year audited financial statement shows the pre-year "deficit" claim was a lit. Left to right above, then CPS CEO Arne Duncan, then CPS Chief Financial Office Pedro Martinez, then Chicago Mayor Richard M. Daley, then CPS director of management and budget Beth Swanson, and a guy brought to CPS for a year from LaSalle Bank because he needed a job and had a buddy on the Board. Substance photo by George N. Schmidt. And so, at the April 22 Board meeting the latest of the Board's chief financial officers, Ginger Ostro, could tell two big lies* in less than three minutes without blinking or blushing. And the Board members sat and nodded knowingly. The anti-union "Better Government Association" could repeat the word "crisis" at just about every opportunity to describe CPS finances and, of course, the pension situation at America's third largest school system. And even though a few conservative outlets have begun casting a skeptical eye on the claims linking "crisis" and "pension" when discussing school finances, Chicago style, the general tone of both the news reporting and editorializing was almost set in stone. There was a "financial crisis" and a huge ($1 billion or more!) "deficit" facing Chicago Public Schools and the reasons for all that were (a) the cost of teacher pensions in Chicago and (b) the fact that the State of Illinois is not paying its "fair share."

And then the Tribune noticed mayoral advisor Beth Swanson, who began pushing the numbers about the "pension crisis" eight years ago when she was budget director at CPS and it's at least time to ask why instead of solving the pension money problems since then, the Board of Education and the local ruling class has not only "kicked the can down the road" (to restate one of the mindless metaphors utilized in such discussions) but actually added as much as possible to the financial problems facing CPS and the pensions by (a) lying to the head of the Illinois State Senate and getting a $1.2 billion pension holiday for CPS and (b) creating an unprecedented chaos in the management of CPS so that most of the city's top "education" officials, hired at great expense from out of town, knew little or nothing about Chicago's public schools but (c) were all committed to a massive program of charter school expansion, public school destruction, and ruthless privatization on a scale never anticipated by some of the most cynical critics (including this reporter) of the operations of the $6 billion entity known as Chicago Public Schools.


* Footnote: Lie number one was the one about how since Rahm Emanuel took over, CPS has reduced "administration" by $600 million. Lie number two was the one about the billion dollar "deficit" being caused by the upcoming pension payments owed to the Chicago Teachers Pension Fund (CTPF) by CPS.


May 8, 2015 at 8:09 AM

By: Rod Estvan

Interesting thoughts by George

There is simply no denying CPS avoided making pension payments as long as it could. There was nothing in State law that prohibited CPS from making payments into the fund before it was absolutely legally required to do so.

But the CTPF reports verify the level of payments that will be required now and CPS has not falsified that data. With the current level of property tax receipts, state, and federal funding CPS is faced with a structural deficit that is growing worse without question. This is reflected in the decline in the CPS bond rating and the fact that the last bonds issued are now yielding 5.5% on a tax exempt basis which is amazing in itself.

It does not at this point matter the degree to which the "crisis" is manufactured, it sadly is what it is. The 7 % paycut being asked of teachers is no surprise is it? Once the CTU decided to take Mayor Emanuel out of office and failed it had to be assumed he would try to weaken his enemy.

CPS could cut contracting by 50%, force every charter school out of business bringing all those children back into traditional schools, take back in all uncommitted TIF dollars, reduce corruption by 90%, and it will only keep its head above water for a few additional years assuming minimal salary increases for staff at the current rate of taxation. CPS can expect nothing more of significance from the State and probably little from the federal government either.

The CTU like Democrat politicans in this City, including Commissioner Garica, live in terror of asking for a legislative waiver to the property tax cap to get the CPS school fund tax rate over time up to the average in Cook County. There is no question that all polling data on property tax rate increases is very bad, but there is also no question this district needs more revenue. Most of the progressive taxation ideas proposed by the CTU are beyond the legal power of a school district under state law and there is no will to grant that authority in the General Assembly.

While Governor Rauner's solution is bankruptcy for CPS and simply defaulting on debt and pensions there is little political support for that even among moderate Republicans. Reality will dictate property taxes as the only viable source of additional revenue for the district tha could end up combined with an oversight authority similar to former Chicago School FIinance Authority. It is not a pretty picture.

Rod Estvan

May 8, 2015 at 11:16 AM

By: George N. Schmidt

CPS's crazy 'Atlas Shrugged' philosophy...

What we are looking at here is one of the biggest orgies of waste of tax dollars in Chicago history -- and that's saying something. The privatization orgy overseen by the members of the Chicago Board of Education (no matter who the current CEO of the month may be) is driven not by "data," as has been claimed, but by a crazy right wing ideology promulgated by a luridly nutsy but monstrously prolific fictionalist. Ayn Rand tells us more about the philosophy governing Chicago's public schools since the beginning of the 21st Century (and especially since June 2011 when Rahm Emanuel's scriptwriters took over) than anything we might learn studying the history of governmental thinking in the USA from Jefferson and Horace Mann through today. These people are frenzied freaks, preaching and practicing crazy because they have been given the power to do so.

As the Civic Federation noticed more than five years ago, Chicago's property taxes are among the lowest in the Chicago region. And so, raising Chicago's property taxes should not be off the agenda as part of improving revenue. Chicago -- and not just CPS -- needs to improve revenues to make the city better for all citizens, not just for those who can walk their dogs within a half mile of the Lake ("Streeterville" indeed!) without fear of crime.

But CPS has also created a huge mess by spending massive amounts of money -- into the hundreds of millions -- on stupid, unproductive and in some cases criminally inappropriate programs. At every point at every Board of Education meeting since Rahm's Board met first on June 15, 2011, the Board has voted for an agenda that pushes massive privatization of just about everything, regardless of the necessity or even, it turns out in the SUPES deal, the legality. Corrupt is the only word for this four year orgy of Atlas Shrugged government under David Vitale, Jesse Ruiz, and the other fanatics who vote, month after month, for these crazy programs (most of which have been "legally" bid).

Today, CPS has increased the cost and reduced services of everything from janitorial services to the supervision of recess through privatization. CPS is not a "data driven" system (that's the smokescreen) but an ideology addled religious entity. In order to hold power over "public" education today in Chicago, you have to have memorized the sillier portions of "Atlas Shrugged" and get misty eyed over the travails of the protagonist in "The Fountainhead." Although this craziness began under Paul Vallas and escalated under Arne Duncan (who was the guy who leased the office on the 19th floor of the Board headquarters to "John Galt Solutions") under Vitale, Ruiz, Quazzo and their other colleagues since June 2011, the policies have been consistent -- but they have nothing to do with enhancing public education or other public services for the people of Chicago or our children.

The word is that Paul Ryan's staff members have to read, discuss and pass some kind of test on the works of Ayn Rand before they can work for the crazy (and hyped) right wing ideologue currently posing as the brains of Republican budget thinking. But any examination of the past five or ten years of CPS governance would show that the same thinking prevails at the very top of Chicago's public schools administrations.

May 8, 2015 at 12:45 PM

By: Bob Busch

11.00 AM

Illinois supreme court has apparently sided

with the workers.Today at 11.00 am they declared most of the pension reform law UN-constitutional.

May 8, 2015 at 4:36 PM

By: Rod Estvan

Supreme court ruling

Bob having read the decision I don't see any aspect of SB 1 that the court found to be constitutional. Simply put it is a complete victory for the state pension funds and retirees.

Rod Estvan

May 8, 2015 at 5:52 PM

By: Bob Busch


Dear Rod

You are correct I must remember to read before citing Radio opinion

May 9, 2015 at 12:45 AM

By: John Kugler

One for the Good Guys!

good to see some rolling back of the reactionary neo-con and neo-liberal attacks on the working class.

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