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Major push to restore Chicago teachers pension tax levy

As the official day for the close of the Illinois General Assembly approaches, the Chicago Teachers Union and other major organizations in Chicago are calling for a vote in favor of legislation that would restore the special tax levy to the Chicago Teachers Pension Fund (CTPF). The tax levy, which was eliminated in 1991 as part of former Mayor Richard M. Daley's push for more control over the city's public schools, was the reason why there was no "pension crisis" for the first 100 years of Chicago teacher pensions. The elimination of the Chicago tax levy gave Mayor Daley (and since 2011 Mayor Rahm Emanuel) dictatorial control over pension funding, resulting in the current "crisis." The legislation to restore the tax levy is currently being bottled up by legislative leaders from the Democratic Party.

Despite his attempts to wash his hands of one long-term solution to the pension "crisis," Illinois Senate President John Cullerton should be lobbied to push through the tax levy restoration.In a major joint statement on May 15, 2015, all of the groups affected by the legislation called for massive lobbying:

Chicago Teachers Call for Vote on HB 3695... CTPF, RTAC, CPAA, and CTU advocate for reinstatement of dedicated pension funding

May 15, 2015: the Chicago Teachers' Pension Fund (CTPF), the Retired Teachers Association of Chicago (RTAC), the Chicago Principals and Administrators Association (CPAA), and the Chicago Teachers Union (CTU) announced their support for House Bill 3695, a measure which reinstates the pension tax levy diverted from CTPF in 1995.

"Our four groups, representing more than 63,000 members stand united in support of this important bill," said Executive Director Charles A. Burbridge of the Chicago Teachers' Pension Fund. "This legislation restores our pension levy, without raising taxes, and returns a stable source of revenue to our pension fund."

"For two decades our members have seen their fund drained by IOUs and pension 'holidays,' said CTU President Karen GJ Lewis. "This legislation restores our revenue source and sets a foundation for a sound pension fund. Legislators in the Illinois House showed overwhelming support for this legislation and we respectfully ask Senate President Cullerton to call this bill so that our voices can be heard in the Senate."

The proposal reestablishes a specific tax levy for contributions to CTPF beginning in Fiscal Year 2016. In 1995, legislation diverted the CTPF tax levy into the CPS operating budget, giving CPS administrators control over pension contributions. CPS then deferred their contributions from 1996 to 2005. As a result, CTPF lost $2 billion in revenue. CPS again deferred contributions from 2010 to 2013 and cost the fund another $1.2 billion. In total, CTPF has foregone more than $3.2 billion in funding.

The bill restores the tax levy, equal to 0.26% of all taxable property within the Chicago Public Schools district, and would generate approximately $160 to $180 million in 2016. The bill does not increase taxes, but reduces the CPS levy from 3.07% to 2.81% to fund pensions. The 0.26% of tax levied each year will be deposited directly with CTPF.

The bill is now waiting to be called for a vote in the Illinois Senate where it is being sponsored by Sen. Mattie Hunter (D-Chicago) with Co-Sponsors Sen. Don Harmon (D-Oak Park), Sen. Ira I. Silverstein (D-Chicago), Sen. William Delgado (D-Chicago), Sen. Napoleon Harris, III, (D-Harvey), Sen. Kwame Raoul (D-Chicago), Sen. Martin A. Sandoval (D-Cicero), Sen. Heather A. Steans (D-Chicago), and Sen. Michael E. Hastings (D-Matteson).

The bill took a major step on April 14, 2015, when it passed out of the Illinois House with bi-partisan support on a vote of 102 to 9. The legislation was written and sponsored by State Rep. Marcus C. Evans, Jr., (D-Chicago) and House Speaker Michael J. Madigan (D-Chicago) with Chief Co-Sponsor Rep. Barbara Flynn Currie (D-Chicago), and received bi-partisan support from several additional Co-Sponsors including Rep. David Harris (R-Mount Prospect), Rep. Anthony DeLuca (D-Chicago Heights), Rep. Joe Sosnowski (R-Rockford), Rep. Arthur Turner (D-Chicago), Rep. Christian L. Mitchell (D-Chicago), Rep. Elgie R. Sims, Jr. (D-Chicago), Rep. Camille Y. Lilly (D-Chicago), and Rep. John D'Amico (D-Chicago).

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TAKE ACTION

HB 3695 Waiting on Vote

House Bill 3695 unanimously passed out of the Illinois Senate Executive Committee on May 6, 2015, but its future hangs in balance as it waits to be called for a vote on the floor of the Illinois Senate.

Act Now

YOU can help move this bill forward by doing two things: 1. Contact President Cullerton and ask him to call the bill. Call or e-mail Illinois Senate President Cullerton and respectfully ask that he call HB3695 for a vote. This important legislation does not increase taxes and reinstates a guaranteed funding source for the Chicago Teachers' Pension Fund. Contact Information:

(217) 782-2728 Springfield Office

(773) 883-0770 District Office

Click here to e-mail President Cullerton

2. Contact your Illinois Senator to ask him/her to vote yes on Legislative Action Center House Bill 3695 when the bill is called. Additional Information about HB 3695 and a Fact Sheet about HB 3695 are available on line at CTPF.



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