Huberman's attack on the teachers' pension fund is dishonest
[Editor's Note. The following statement was read by Jay Rehak to the press conference held at th Chicago Board of Education on August 26, 2009. Mr. Rehak was not signed up to speak during the Board meeting despite the extraordinary relevance of these remarks to the Board's vote on the 2009 - 2010 Proposed Budget because he had spoken out at the July 22, 2009 meeting of the Board and the Board has a rule that says members of the public cannot speak to it two months in a row].
Jay Rehak speaks to the 150 people who picketed the Chicago Public Schools headquarters on August 26, 2009, and to the press. The protest was organized by parents, teachers, students and community leaders from Pulaski Elementary School, and by GEM, CORE, PURE, and other groups critical of the Chicago Board of Education and the policies of the Huberman administration. Substance photo by George N. Schmidt.My name is Jay Rehak. I am a 20 year veteran Chicago Public School Teacher, a father of three CPS students, two of whom have graduated, and I am a home owning Chicago taxpayer. Finally, I am also a future pensioner, a man who hopes to some day retire, and receive a pension for my years helping to educate the children of Chicago.
We have come here today because as the Board of Education prepares to present the finalized CPS budget for fiscal year 2010, the new CEO, Ron Huberman, continues to make a great deal of noise about the high cost of teachers’ pensions as a significant part of the budget “deficit”. An undercurrent of the CEO’s comments seem to suggest that rather than a reasonable cost CPS had long ago anticipated, the CPS legal obligation to the Teacher Pension Fund is somehow a sudden, unexpected expense. That is not the case.
It is important to note, since Mr. Huberman has not, that from 1995-2005, CPS received $1.4 billion from the State of Illinois that was specifically earmarked for the Chicago Teachers Pension Fund — and CPS deposited exactly none of those dollars into the Chicago Teachers Pension Fund. Let me repeat that: from 1995-2005, CPS received $1.4 billion from the State of Illinois specifically earmarked for the Chicago Teachers Pension Fund, and CPS deposited exactly none of those dollars into it.
Instead, CPS went on a 10-year “Pension Holiday” and spent that money on ideas of their own, including hundreds of millions of dollars for charter schools.
Fortunately for teachers, the 1995 law that allowed CPS to divert our pension money into the general fund, does provide the teacher pension fund protection from CPS avoiding its obligations. Illinois law states that when CTPF’s funding ratio falls below 90 percent, CPS must resume employer contributions to the fund. As a consequence, since 2006, CPS has been required to make contributions to our fund. Our current funded ratio is 79 percent, and, as a consequence, CPS’s legal obligations will continue for a number of years. On the other hand, had we received the $1.4 billion from the tax levy, our current funded ratio would be close to 90 percent and Mr. Huberman would not be speaking of budget shortfalls.
Our concern is that the current promissory note on which our pensions have been written, will come back to us in the future stamped “insufficient funds.” And so, again, that is why we have come here today to remind the Board of Education CEO and the citizens of Chicago that if CPS had been paying into the fund since 1995, none of this would be an issue. The fact that CPS received $1.4 billion from the state for our pension from 1995-2005 and yet contributed nothing to our fund during those years, is the root cause of any shortfall as it pertains to teacher pensions. The fact that CPS is now required to do what it should have been doing all along is the result of CPS spending our pension money to fund a myriad of privatization ideas, including hundreds of millions of dollars for charter schools. While privatization of public assets seems to be the trend in Chicago these days, from parking meters to our schools, we stand here today in opposition to those privatization efforts. In simple terms, it’s time CPS stopped lavishing money on privateers and profiteers, and instead honored its legal commitments to its teachers.
