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Chicago Newsroom show on February 18, 2016... Substance editor George Schmidt clarifies what happened when the CTU rejected the recent 'Tentative Agreement' with CPS negotiators...

George N. Schmidt - February 19, 2016

It was again a pleasure to join Ken Davis and the "Chicago Newsroom" team for conversation at the new studios of CNTV (Chicago Access Network Television (CAN TV) 1309 S. Wood St. Chicago, IL 60608) on February 18, 2016. With all the evolutions of Chicago news and analysis during the past 50 years or so, a central discussion has always been the facts -- both financial and educational -- about the city's public schools. This year, once again but not actually very novel, we are talking about school finance, teacher union contract negotiations, and Illinois (and Chicago) politics.

Substance editor George Schmidt on Chicago Newsroom with Ken Davis.It was good to be having a conversation with a news reporter who remembered the days when protests were loud and militant at the Chicago Board of Education. Plus ca change...? At the January 2016 meeting of the Board of Education, I was talking with some community activists, after the meeting, about how if you take over a meeting of the Board of Education you might get a school named after you -- after you're dead. Ken Davis remembers when protesters took over the Board meeting as Katherine Rohter, then Board President, sat stolidly in her seat. For many reporters, that's either non-existent or ancient history.

But that was 1978 and 1979 and 1980, and now we're in 2016 -- and Illinois Republicans are again trying to destroy Chicago public school finances by claiming the schools are "bankrupt" and only some nouveau version of the School Finance Authority that was imposed on Chicago after the phony 1979 "financial crisis".

One of the interesting things about the current debates is that the Republicans are playing from a very old script, trying to revive the claims of "CPS bankruptcy" (or create one) that enabled them to force the School Finance Authority (and that decade's austerity narrative) on Chicago's public schools for 30 years. Although we didn't have much time to discuss that historical flashback, it was interesting that Ken Davis and I both remember the struggles of the late 1970s and 1980s not only as "history" but as memory. One of the challenges in fighting the latest lies is that much of history, despite the wonders of the Web, is relegated to books -- and the people who are subsidized to write them.

Anyway, here is the Chicago Newsroom story from February 18, 2016...

Readers who want to get the entire conversation on You Tube should go to: http://chicagonewsroom.org/2016/02/18/cn-feb-18-2016/

The summary and transcript follow here:

Chicago Newsroom, CN, Feb 18 2016. Posted on February 18, 2016 by Ken Davis.

George Schmidt was a teacher in the CPS system for 28 years. He�s been affiliated with the CTU for much of that time. He�s currently a member of its House of Delegates. He�s also the founder, and still the driving force behind, Substance News, now entirely on-line. He has more than 40 years of observing the system, agitating for change and union organizing.

Schmidt was deeply involved with the response to the �Tentative Agreement� between the CTU and CPS that was floated about two weeks ago. He gives us an inside account of the intense lobbying that went on before the �Big Bargaining Team� vote that rejected the offer unanimously on February 1.

�Democracy intervened in an explosive way,� he begins.

CTU President Karen Lewis issued a statement indicating the CPS had put some major new issues on the table, and that the two sides might be approaching an agreement. As we now know, the so-called �tentative agreement� collapsed a few days later when the �Big Bargaining Unit� unanimously rejected it.

But Schmidt tells us the inside story. The Big Bargaining unit, he says, was deeply divided.

�At that moment, according to my sources on the big bargaining team, the team polled itself internally and it was 26 to 14 �no� already,� he claims. �It was not unanimous, but then every day after that �- Wednesday, Thursday, Friday to Monday, every day after that as the yes votes got a closer look at the pieces, like this "no economic layoffs but", or "community schools but" -- and, you know, people kept saying, �We�re not getting anything. We�re taking a 7% pay cut. We�re supposedly getting these things we want to make the schools better, but we�re really not getting those either because they�re bullshit.�

It took a couple of days for the �yes� votes to change their minds, Schmidt says. �So finally between the Wednesday of the week when Karen said, �We�ve got a deal,� or Jesse was saying, �We seem to have the framework for a deal,� (they were saying slightly different things, very different in reality) the big bargaining team people debated it so that by Monday, which was the day the executive board was supposed to meet, the big bargaining team voted unanimously saying, �No, 40 to nothing, no.�

And Schmidt says that was just the beginning. The �no� sentiment was strong at every stage of the process. �But I�m convinced,� he reports, �at every point the no vote of the big bargaining team, the 40 to nothing would have been reflected at every other level where we have democratic representation.�

So why the apparent disconnect between the bargaining team and the members? Didn�t the Board of Ed agree to eliminating layoffs for the duration of the contract? �The selling point supposedly to the big bargaining team was we�re getting contract language that says no economic layoffs,� Schmidt explains. �And people said, �Well what about other kinds of layoffs?� �Well, there�s 1,000 synonyms that you could use for reducing forces without saying it�s an economic layoff� And people started asking and the answer was well, right. �people have now lived under the contract that we won in 2012 after the strike,� he says, �and have pretty much seen the holes in that, and there are a lot of them.�

�I mean just to take one example of an explosion that happened from the previous contract. At the end of 2015 the Board of Education�s medical insurance was reorganized because the Board was allowed to. And a lot of us found out the hard way that things had changed radically. The members at this point having won the strike in 2012 and lived under the contract since 2012 are really demanding that every paragraph not only be explicit but explained. And I don�t think any vote is going to get through the members until that happens, until the leadership can give you everything that�s in the deal and explain it in a way that�s going to be satisfying.

In the current environment, Schmidt tells us, it might be more acceptable to go for a two year contract, instead of four. �I think two years would be sellable because there�s too much suspicion and the suspicion is not going to go away. You know it�s not bad faith. Forrest Claypool walked into a minefield�� says Schmidt.

Can anything be learned from this exercise? Schmidt offers some advice to top managers. ��it may even be an argument for a less open collective bargaining, a little more secrecy that you don�t go around saying things until you�re sure you�ve got the deal,� he speculates.

But more important to Schmidt is his assertion that teachers have fallen behind economically in the past four years, particularly after the contractually-obigated four-percent raise was simply rescinded by the Board in 2012.

�No contract is going to be acceptable to the members of the Chicago Teachers Union who vote on it, if it includes a pay cut of any kind, period.�

We also asked for Schmidt�s reaction to Governor Rauner�s Wednesday budget speech. He says he understands the arguments CEO Claypool and Mayor Emanuel are making that CPS schools don�t get a fair share of state funding, but he says State aid is a secondary, and much smaller portion of overall CPS funding. The vast majority comes from Chicago taxpayers. �In fact,� he asserts, �Chicago property taxpayers -� that�s residential, residential to commercial and industrial taxpayers as its four main categories � we�re paying less proportionately, as the Civic Federation�s been pointing out for years, than our neighbors. If you go to the six county Chicago area the majority of school districts have proportionately much higher property taxes than we do.�

And that hurts CPS, he says, when it goes to the Capitol looking for money.

�So you do have that argument and that�s what Chicago runs into when you get to Springfield and say, �Well we want more money from Springfield and if you don�t give it to us you�re a racist.� You know the average state legislator no matter what his diversity composition maybe would just say, �Wait a minute, let�s look at this fact. The people in Wilmette are getting what they�re paying for. Why aren�t you willing to pay for that too? At least look at the local property taxes as well as constantly saying Springfield Springfield Springfield.�

You can read a full transcript of today�s show here

FULL TRANSCRIPT�

Ken: Well hi there, and welcome to another Chicago Newsroom here on CAN TV. I am Ken Davis, and thank you for joining us for another week. If you happened to join us last week you may have seen Peter Cunningham was on our program. Peter is a consultant. He runs an operation called Chicago Post. I think it�s fair to say that Peter is on the� You know we�re kind of polarized in America, if you haven�t noticed that these days, so if you�re for school reform you�re either in the school reform A or school reform B camp, and he�s in one of those camps that I think it would be fair to say that they are the people who see school reform as being pro charter. Maybe they�re not so hot on teachers� unions. They tend to be funded by very rich people who want to see a certain kind of reform. I thought we would bring our old friend George Schmidt on today to see if maybe we can get a different perspective. I haven�t seen you for a couple of months George, glad to have you back.

George: Glad to be back. Happy New Year.

Ken: Thank you for doing this and Happy New Year to you too. Could we begin by having people, maybe you need to explain to people who you are and what you are in this, because like I said, everything is sort of broken into camps. I first encountered you in probably 1979 when I started covering schools and I guess Substance was kind of getting rolling at that point. Now Substance News has been around for decades. It�s online and you have been on the ramparts for decades. So who are you?

George: Right now I�m the editor of Substancenews.net, which you can find on the web and we�re not going to maximize our hits by using phony headlines or hiring somebody to get us on every Google search. But we�re there and we�re up every day with new so-called content. We had to go off print edition in September 2012 because after 35 years or so people kept saying, �Well I can read it online,� and they wouldn�t subscribe or renew their subscriptions to the printed version.

Ken: So even you�re not immune to what�s hitting the New York Times and the Tribune.

George: Well the New York Times seems to be surviving well. The Tribune I�m hopeful, even though their new partial owner is a scary thing. But anyway, 1979 was an interesting year because that was the year of the last major financial crisis that was put on Chicago Public Schools. We really dug around that year.

Ken: The Hannon years.

George: That was the end of the Hannon years, the so-called bankruptcy. The imposition of the School Finance Authority, the reduction of 8,000 people in the ranks of the public schools.

Ken: I�m going to stop right here and bring us up-to-date. You publish Substance, but you�re also involved with the Union in some way or another. How do we define your relationship to the CTU?

George: Well right now I�m a delegate representing retired teachers in the House of Delegates. I�m at every 800-member meeting in the House of Delegates. I�ve been an AFT, that�s American Federation of Teachers and Illinois Federation of Teachers, delegate. I expect that we�re going to get re-elected this time and that I�ll be in Minneapolis for the 100th Anniversary of the American Confederation of Teachers Convention in July. My wife teaches at Steinmetz High School and she�s a delegate from Steinmetz High School, and she�s also on the executive board, one of the six people representing all the high school teachers, so that�s who we are.

Ken: You�ve been a teacher for a long time.

George: I was a teacher for 28 years until I was purged by Paul Vallas and blacklisted.

Ken: But that�s another show.

George: That�s another show if you ever want it, but I�ve told the story.

Ken: You taught mostly high school right?

George: Right, high school. Finally, I got to teach high school English, but when I was substitute teaching I did everything from sheet metal and machine shop to just about every subject. They would say, �Can you teach it?� And I�d say, �Sure, if you�re going to pay me for the day.� We talked about it once, Prosser High School�

Ken: Right, my old high school, right.

George: So yes.

Ken: I never took sheet metal so I guess we didn�t intersect.

George: But drafting that was a fun subject.

Ken: I still remember fondly learning how to do those letters with the letter guide.

George: But mainly I taught English. I enjoyed it, all the way from the remedial freshmen to the advanced placement seniors and all the way across the board. Big books and little books and everything in between.

Ken: Let�s talk about the news, shall we? Two things happened yesterday with respect to Chicago Public Schools. There were the walk-ins and our Governor had a speech yesterday to talk about how he is going to just pretty much forget about the �16 budget, let�s talk about the �17 budget. So what do you want to say, do you want to talk about these walk-ins?

George: Well I will say about the Governor is he is trying to Union bust and public sector bust, and he�s really just pure wetting over the same spot, so there�s nothing much new to say about what he said yesterday, although some people get lathered up about it. On the walk-ins we covered them as many as we could by noon. By noon by estimate was more than 100, I think more than 200 out of 600 schools is a fair report. It was really exciting. Everybody who was reporting to me said it was a really good mix of students, parents, community, and teachers. And one of the most interesting ones came out late in the day. Walter Payton High School, which is right down there where it would have been easy for the TV cameras to get there, that was the big one and the students reported it in incredible detail. They had a video, a lot of photographs, a lot of narrative. It was like almost student-led with a lot of teachers helping out, so that was the walk-in. And it was basically to bring attention to the fact that public schools have been under attack not only in Chicago, although Chicago wrote some of the scripts, but nationwide through promotion to charter schools, privatization of every kind of service you could want, and all these other things. There�s no longer even evidence that any of this privatization or charter schools really make things better for the average person. It�s literally a political ideology that�s being imposed nationally and locally on the schools by the same billionaire class that we�ve been talking about for other things.

Ken: I think I�ve heard that mentioned a time or two. So you would say the walk-ins then were a success? 200 out of 600 schools is only a third.

George: At least 200 out of 600. I mean nobody drove around town like we could have done at the 2012 strike and actually drive past everybody would be beeping their horns. You would hear the noise and you would see 100 people standing on the sidewalk.

Ken: Just taking a journalism point of view on this, what you�re saying is two-thirds of the schools didn�t participate at all as far as you know.

George: I wouldn�t say that, but a large number didn�t participate, more than half probably. I haven�t been able to do the poll. We don�t have the sources and nobody else does that I know of.

Ken: Why would a school not have participated? Because they don�t have enough connected parents? What would be a reason for that?

George: Well, one reason was the day before Chief Executive Officer Forrest Claypool sent a letter around threatening people who participate in the walk-in. He said very explicitly I want the names of everybody who is speaking and active. It also said we�re going to bar them from entering the building. They shouldn�t be allowed to enter the buildings. So if there�s a bullying factor there that just reduced the number of participants that would be the biggest one, because as a parent, I have two sons in the public schools so we got this letter signed by Forrest Claypool and Janice Jackson the Chief Educational Officer saying all this stuff. For people who are not as committed they would just say, �Oh well I think I�ll stay home or I won�t participate.� That could have had an impact. The rest of it is it�s a question of where the organizations are intense and organizing where people are less well organized, and that�s true everything in politics and reality.

Ken: I�m raising this for an interesting reason to me, because the CTU is in for a rough patch here. They�re going to need to have all the organization they possibly can, and I must tell you that my first thought when I saw this was this wasn�t as big as I thought it might be. Is that an organizational glitch or am I just making more of it than there is?

George: I wouldn�t say it�s an organizational glitch, because if you remember just two weeks earlier we had the march downtown, and the best estimate we published was 3,000-plus people go from the Bank of America headquarters on LaSalle Street to the Congress, block the Congress Parkway. 16 people were arrested for civil disobedience in the lobby of Bank of America. So there�s been a lot of actions by which you can measure how the Union is preparing and how well organized the Union is. I don�t think you can put your finger on any one and say that�s the pulse.

Ken: As you say it is almost like sort of trying to cover a distant civil war or something. As a journalist covering 600 locations at almost the same time is pretty hard to do.

George: The only ones who could have gotten the information were either the Board of Education through their centralized thing or the Chicago Teachers Union by getting phone calls. I haven�t heard anything more.

Ken: Let�s turn our attention to our Governor who spoke yesterday in Springfield and here�s a quote that I think I pulled out of the Sun Times today. �Not only did Chicago Public Schools ask for the current arrangement, they are benefiting from a special deal. CPS receives an extra $600-million more every year than the school districts with similar student demographics. Any school funding reform proposal that involves taking money from one school district and giving it to another is doomed to fail. Governor Bruce Rauner on February 17, 2016.�

George: Governor International Capitalist ruling class austerity Chicago Public Schools in the State of Illinois. Rauner � that guy? That�s the context you�ve got to put him in. Anybody who would have said at any time in the past 40 years since we first ran into each other I guess, we were going to have a Governor who is going to refuse to do a budget, massive act of civil disobedience and he�s just going to arrogantly declare that that was the best thing to do and he had to so-call turn around the State and it was all to bust the Unions and public employees, people would say, �Oh that can�t happen.� Well now we�re in 2016 and we�ve got bizarre politics from the Mediterranean to Chicago and Illinois and so he gets to say this stuff. The thing that I noticed about that particular statement was he did not foot-note it as usual. I mean he just throws out a blob of rheterotic and then if you were there and you could have asked the question at a press conference, say, �Could you please tell me what these other districts are that have similar demographics? How big are they?� Because he may not even know, but Illinois has two school codes. You know there�s the State of Illinois School Code and then there�s districts representing cities over 500,000, which is only Chicago. And then he talks about it as if you compare us to say maybe Waukegan or East St. Louis. It�s a ridiculous thing to say, but he�s been saying ridiculous things since he got the majority vote and became Governor. Ken: Are you on the same side as Forrest Claypool with the 20-20-20 argument?

George: I think that�s oversimplified.

Ken: Okay. So what we�re talking about here is trying to get a handle on the argument that many people have made that Chicago Public Schools are not paid fairly by the State of Illinois, right? I mean I guess broadly that would be it. Now of course everybody has got their own set of numbers. What numbers do you have?

George: Well let�s start with the 20-20-20. Forrest Claypool has been saying at Board of Education meetings and through press release � he never holds a press conference by the way, which is another story, that Chicago puts in 20% of the State income taxes. He�s very precise on that, and gets 15% of State aid back. And then the question is the same for Bruce Rauner, where are the footnotes and where does that come from, and why is that � an equally good question is why is that the main talking point? Because when you look at school funding, the actual budgetary realities of every school district in Illinois State aid is #2. Certainly for Chicago and I would bet for almost all districts, I haven�t checked every district so I could be corrected by the Civic Federation, the largest amount of money�

Ken: Oh I see what you�re saying.

George: �that comes in is local property, and that�s State law right now. And until we change it that�s where you first go to look at how things are funded. The entire idea, and this has been around since last summer with Claypool was appointed to succeed his crooked predecessor in July�

Ken: She hasn�t had her day in court yet.

George: She�s already admitted it though.

Ken: That�s true, that�s right.

George: She didn�t have to be convicted, she pleaded guilty, so that�s not a debate anymore.

Ken: Barbara Byrd Bennett.

George: Barbara Byrd Bennett was out, Jesse Ruiz was interim and Forrest Claypool became the second Chicago Transit Authority executive to head the public schools after Ron Huberman was the first. And so then he started saying well you know the State has to give us more money. And there�s this sort of blackout or green screen if we were doing it in a different context over whether we should also talk about local property taxes. Other sources of revenue which are all very small of a $6-billion roughly CPS annual budget. And so we�re still having that conversation. Is it all on the State? Of course Rahm slipped in behind everybody and got City Council to approve a massive property tax for the City of Chicago which sort of slid away from what could have happened for CPS, so that reinforced Bruce Rauner should put more money in from the State. That�s where I see now. There has to be an examination of the actual budget, the revenues and expenses in Chicago today. Since July the Board of Education has been claiming that there is a �deficit� or the newspapers have been getting a little bit more sophisticated with this because the deficit can be legally defined, so they are saying budget hole, expected problem. And if you remember we were supposed to cut 5,000 jobs in November but then that didn�t happen because the crisis was put off and then it was supposed to happen in January, and now we�re looking at February 29/March 1st, which is a bizarre time because the second semester has now begun. It�s obvious that you have a bus lord running the school system when he doesn�t even try to time it to�

Ken: [Laughs] A bus lord.

George: To hit the timing of the school system. I mean the principals are going to have to close classes 2nd 3rd or 4th week of the semester, if the budget constraints that are put on them go through. And then that leads to another issue in Chicago which is the inequities within the system between affluent schools which can have a rainy day fund, and the majority of schools where you have a bake sale and you raise $100 maybe to buy mouse pads. That�s sort of coming clear now and in the public focus. My oldest goes to Whitney Young, and you know the parents of Payton, Whitney Young, Northside College Prep and a lot of the elementary schools in the more affluent parts of town they do have these rainy day funds. You know they�re raising money constantly for not-for-profits that are dedicated to school. The question is what�s happening in Englewood where you can�t raise that money, so this adds to the inequity and adds to the need to examine the overall funding of the schools. Local property taxes and State aid and then finally okay, some federal is the third piece although the smallest. Ken: Staying with that State aid thing for a little bit longer though, I must say as soon as I start hearing all these conversations I just get really confused, but that may just be a statement of my own mental capacity more than the complexity of the issue. But I really don�t understand, there�s been this debate for years for about well, Chicago doesn�t get quite as much from the State aid as other schools do, but it�s more than made up because of all these Special Funds that the state kicks into for special education and kids with special needs and all that. So if you put it altogether CPS schools get about the same as the schools in Decatur and Springfield and South.

George: And you�ve got to break it down into those categories. You�ve got to look at special ed. Last summer, and again in the beginning of January Forrest Claypool ordered cuts which primarily hit special ed. But it hit it in a dishonest way. Basically they are claiming they are making cuts in administration which you would think would mean $100,000-$200,000 bureaucrats. Actually he�s added over a dozen of those since he took over in July. What they did was they amalgamated special ed service people like psychologists and social workers into this so-called administrative budget, so it�s administration and city-wide they call it, and then they cut mostly from there. So they lay off a $40,000 a year school social worker and say we�ve cut the top. While adding a $215,000 a year vice-president for finances who gets a pass to live in the suburbs. The first meeting Claypool oversaw he hired this guy named Ronald Denard for that job, and he�s been doing it every month since. And usually outsiders, most of them with CTA roots, so now we have a governing team at the top of CPS at the tune of $2 to $3-million by my count. That�s experts in bus routes and transportation issues now running the schools. That�s a main piece there is where the money is being spent and then the other piece is where the money is going to come from to do the jobs. The federal law beginning in the 1960s said that special money should go into poverty. This was the original ESEA, Elementary Secondary Education Act. That was changed by Arne Duncan and Barack Obama into well we�re going to make this inro the race to the top. A very different thing. Before that it was No Child Left Behind under George W. Bush, but basically following the same attack on the previous model.

At the State level Senator Emil Jones when he was running the Senate and other people finally noticed that there was a need in Chicago for more state money, so we had a thing that we called State Chapter One, mimicking the title for the federal program, that added more dollars to Chicago because of the large number of kids living in poverty. That�s still the case, and to look at it in the details you do need to, and then to have the argument you would need to actually have a bunch of people who studied the budget sit down with the Governor and ask him precise questions and not just allow these talking points to float out of Springfield like balloons that go up forever. Ken: But I guess from a political perspective the governor probably feels that he�s on pretty solid ground to say, �Hey look, Chicago is not really being discriminated against. Chicago is in as bad a shape as the schools in Cairo or whatever, and so I don�t have any responsibility to give them anymore. Why would you give more to Chicago if you�re not going to give it to Galesburg?

George: And there is a lot of fact behind a statement like that, especially in the greater Chicago area. In fact, Chicago property taxpayers, that�s residential, residential to commercial and industrial taxpayers is its four main categories, we�re paying less proportionately, as the Civic Federation�s been pointing out for years than our neighbors. If you go to the six county Chicago area the majority of school districts have much proportionately higher property taxes than we do. My own family, my wife�s brother moved from Chicago to Wilmette to get his kids into the New Trier district when they were school age. One of them just graduated from New Trier now, but they�re paying about twice as much in property taxes than we are, living in Wilmette, proportionately, a square foot or however you want to calculate it. So you do have that argument and that�s what Chicago runs into when you get to Springfield and say, �Well we want more money from Springfield and if you don�t give it to us you�re a racist.� You know the average state legislature no matter what its diversity composition maybe would just say, �Wait a minute, let�s look at this fact. The people in Wilmette are getting what they�re paying for. Why aren�t you willing to pay for that too? At least look at the local property taxes as well as constantly saying Springfield Springfield Springfield.� And I think we may get to the point now where the local property taxes are going to at least be examined co-equally with this state thing, I hope. Ken: I guess that really is a kind of a separate show to talk about the disparate property taxes because it takes an hour to go through it. But I mean essentially there have been moves over the years to see if that could be done, and it just always runs into a brick wall. But I mean maybe there�s a chance now that that could be done, because Rauner says he�s open to it as long as nobody gets hurt, which I guess means the folks in Barrington won�t have to pay any less. But I�m not quite sure how you get around having the folks in Barrington not pay any less and the folks in Ford Heights get more. I�m not quite sure how that would work.

George: Well, and the answer from the CTU and its allies is progressive income tax, the other Wall Street taxes that are being proposed, all of which raise revenues in general and then allow us to break out from the austerity narrative that Rauner is one of the captives of and one of the captors for. I mean until we have a way of looking at revenue in the biggest sense and saying we need progressive taxes, we�ve allowed the rich to get too rich, we�re in trouble. As you know that goes all the way back to Con-Con, which is another show.

Ken: That�s yet another show, the Constitutional Convention.

George: Block progressive taxation and the income tax.

Ken: It�s interesting how if you look back over the last 50 years or so you can see all of these time-bombs that have been stitched into the body politic and they are all going off just exactly as would have been predicted and we�re paying the price for it today.

George: And we did predict it, some of us.

Ken: It has been predicted. The word now is that on the 29th there�s going to be another set of layoffs as you mentioned today, but yet a couple of days ago CPS was able to borrow at exorbitant rates. I think they went down the corner to the Payday loan place and got this $700-million, but they have $700-million. So why�don�t they have enough money to get them through the point to when the tax money starts flowing in March? Do you understand that?

George: Yes. The answer is and has been yes, and that�s why the borrowing was such a strange thing. We were set up to borrow at the highest possible rates that same week the Governor said CPS should be put into bankruptcy with the help of a couple of his aides in the legislature. And then of course Wall Street said, �oh my gosh, it�s Puerto Rico. We can�t possibly risk that. You�ve got to pay us an extra 1%,� which is what happened. Yeah, as you�re saying - starting March 1st the local property tax collections come into the CPS bank accounts.

Ken: I know; I have a tax bill sitting on the table right now.

George: Exactly, so that money by March 31st the CPS checking account is going to be very healthy for a few months. Now you can say in June when once again CPS has to pay $674-million into the Chicago Teachers Pension Fund, because that�s a legally required Supreme Court�obligation, then that�s where you�re looking at a problem. But it�s not a problem on February 29th, despite all the drums being banged to say it is. And again, you know, if you don�t get clear answers and have the right to ask more detailed questions you can�t possibly say do we really need to borrow that money at this point at that rate. Ken: So we have layoff day coming up on the 29th. The principals have been notified they�re going to have to redo their budgets. A lot of schools are going to be losing a lot of money. Even the charters are going to be losing money. But it brings us back really to the thing that undergirds this whole conversation, which is the contract, and we haven�t talked about the contract at all yet today. And I�ve got to tell you, maybe I�m just totally na�ve, but when that thing first started breaking where CPS and CTU kind of jointly said on the same day there�s a big package on the table. It looks like we might have something we can all agree on. I thought my God, the skies have opened. I hear the angels singing. This is the beginning of a brand new day for us, but of course we were to be crushed as always. So I immediately thought you know, I�ve got to get George Schmidt in here to find out what really was going on. Karen Lewis said, and I remember this, I mentioned this on the show last week, I remember there was a point, I don�t know where it was, it was on a TV interview or something, she just kind of casually said, �Well you know, at some point we�re going to realize we�re going to have to deal with that pension pick-up. We�re going to have to give some of that back.� And I thought my God, I can�t believe she�s saying that. The CTU is talking about okay, we�re going to give something back if you will give us�maybe you will give us job security, maybe this that and the other, I don�t know, but there is some massive deal being struck here. Explain.

George: Democracy intervened in an explosive way, which has been happening this year in all kinds of political settings.

Ken: Yes it has. Not only in the United States.

George: Basically what happened was it may even be an argument for a less open collective bargaining, a little more secrecy that you don�t go around saying things until you�re sure you�ve got the deal. But Karen said that, and of course it became news, but as the pieces of the deal were brought to the so-called big bargaining team, which is 40 people that are there present during bargaining for the most part and they are active duty teachers, social workers, clinicians, others, each piece smelled worse starting with of course the 7% give back which was spread out over a couple of years but basically was a pay cut. But beyond that, the other pieces which�

Ken: By the way, I brought this up with Peter Cunningham last week and said, �Is there any way that you can say that the 7% is not a pay cut?� And he said, �No, it is a pay cut.� George: No, it�s a pay cut, so that was #1. If you go to the audited financial statements of the Chicago Public Schools you will find that the past four years since fiscal 2012 have been the worst in terms of the pay raises Chicago teachers have gotten. Because the 4% was taken away in 2011-2012 that was a zero raise and then after that was 2 and 3%, whereas predecessor years, and this is in the audits, was 4%. So the teachers have already taken a hit by comparison with any reasonable summation of inflation, etc. That�s #1. But then all these other supposed sweeteners, the closer you looked the nastier it smelled and got. One was the example of supposedly the Board was going to agree to no economic layoffs. Well, there�s 1,000 synonyms that you could use for reducing forces without saying it�s an economic layoff. And people started asking and the answer was well, right. Now there was going to be a layoff but they�re not just going to�that�s #1. Ken: Let�s be precise about this. Even with the contract CPS can still layoff a CTU teacher if there are economic reasons.

George: If there are other than economic reasons would have been what they would have done. I mean the idea was the selling point supposedly to the big bargaining team was we�re getting contract language that says no economic layoffs. And people said, �Well what about other kinds of layoffs?� And the answer was well, people have now lived under the contract that we won in 2012 after the strike and have pretty much seen the holes in that, and there are a lot of them. No paperwork reduction that�s enforceable. Bullying is anybody can bully you. Two years from now you might find out that it was wrong for them to bully � blah blah blah. All these things were supposedly good. So each piece fell apart upon examination. One huge weird thing was the privatization of the so-called community schools. This is a pet project of a couple of North Shore billionaire people types. They were going to privately fund these so-called community schools which were going to get all this money to develop their own school models, like it happened at Dyett and then was rejected after the Dyett hunger strike. You know each piece was just ridiculous, so finally between the Wednesday of the week when Karen said, �We�ve got a deal,� or Jesse was saying, �We seem to have the framework for a deal,� they were saying slightly different things, very different in reality, the big bargaining team people debated it so that by Monday, which was the day the executive board was supposed to meet, the big bargaining team voted unanimously saying, �No, 40 to nothing, no.�

Ken: Okay, so this is the question isn�t it? How does it happen that a I think by all accounts wildly popular CTU president says that she�s got something that she thinks is a decent deal, she impaneled the 40-person bargaining team to evaluate it and they 100% rejected her. Okay, I�m confused. I don�t understand what that means. There are two scenarios; one is that she is less in control of the Union than she thought she was, and the other is that it was a cynical ploy because she didn�t want to get up from the bargaining table and say, �No, I can�t accept this,� and she had her people get her back and reject it for her. George: Well, I haven�t talked to Karen about this because we�ve had our differences on some of these matters. But what I would say, it�s not a question of being in control of your members, so much as being in contact with the actual rank and file out there.

Ken: Out of touch with your members. George: And you would have to say that that which was the first of what could have been three no votes by the way, show that there was a big disconnect between what the rank and file wants and needs for these so-called better schools we are all in favor of and what the leadership could get at the bargaining table. So if it was a wake-up call it was a wake-up call for the so-called small table bargainers. That�s the officers and the lawyers on both sides. The big bargaining team was unanimous, and had it gone to the executive board that evening, because the structure was big bargaining team really doesn�t have any constitutional power in the Union. The power is in the executive board to make a recommendation in the House of Delegates. And then the House of Delegates, which is 800 people then makes a recommendation based on what we receive.

Ken: You are one of them.

George: Contract members, a contract language to the membership, but there�s no deal until the members have voted in a school citywide referendum on the actual contract language, and people were burned in previous contracts. So they want all the details now, and I think the big bargaining team did the leadership a favor by stopping that train from rolling farther down the track, because at every point the track was going to collapse under the train you know. The executive board would have had a huge split; I know what happened there. The House of Delegates would have probably recommended no deal, and then the membership like we did in 2003 when Debbie Lynch was president committed political suicide and in so doing would have rejected the deal. And at that point you know you�ve got a really challenged leadership, even if they can get re-election, and we have an election in May 2016 by the way. It really is a challenge. You have to rethink how much democracy we have and who is listening to whom. But I�m convinced at every point the no vote of the big bargaining team, the 40 to nothing would have been reflected at every other level where we have democratic representation. Ken: Do you think on the day that the leadership announced that they had something, I think �interesting� was the term if I�m not mistaken or something like that, that they were speaking positively of it, do you think that at that moment the big bargaining team would have been split? Did they change?

George: At that moment, according to my sources on the big bargaining team, the big bargaining team polled itself internally and it was 26 to 14 no already.

Ken: Oh, but it was not unanimous?

George: It was not unanimous, but then every day after that � Wednesday, Thursday, Friday to Monday, every day after that as the yes votes got a closer look at the pieces, like this no economic layoffs, but, or community schools but and, you know, people kept saying, �We�re not getting anything. We�re taking a 7% pay cut. We�re supposedly getting these things we want to make the school better, but we�re really not getting those either because they�re bullshit.�

Ken: Wasn�t there a conversation about teacher evaluations? Didn�t the Board of Ed kind of back off on that?

George: They retreated, I�m not sure whether there was a back-off or just one of those pirouettes where you see movement but they wind up in the same place when they come down off the pas de deux. That�s the kind of thing where you have to see it as it unfolds school by school, principal by principal, classroom by classroom. There are going to be fewer visitations, fewer blah blah blahs, but we had schools by then where principals who were really at war with their teachers rated 60% of their teachers, one of them I know of, were unsatisfactory under the old system. It�s got different names now, but I mean it�s the same thing. That�s ridiculous. That principal by the way is being fired by his local school council because it�s ridiculous, but that sweetener, had it existed and had the language been clear and precise enough to be satisfactory to the members was not enough to carry a 7% pay cut and all the other stuff that was happening. I mean just to take one example of an explosion that happened from the previous contract. At the end of 2015 the Board of Education�s medical insurance was reorganized because the Board was allowed to. And a lot of us found out the hard way that things had changed radically. I mean you can�t� The members at this point having won the strike in 2012 and lived under the contract since 2012 are really demanding that every paragraph not only be explicit but explain. And I don�t think any vote is going to get through the members until that happens, until the leadership can give you everything that�s in the deal and explain it in a way that�s going to be satisfying. That�s really something, but it�s worth it. Ken: This really does sound like a hardening of positions, because what I think I�m hearing you say is that at the grass roots level the individual teachers are saying, �We didn�t really think the last contract worked all that well and we�re going to really draw a very hard line here and we�re not going to accept anything less than this and this and this.� And we�re seeing the other side hardening because one of the things we talked about last week, I asked Peter about this directly, was when Forrest Claypool, the day after the contract fell apart Forrest Claypool announced $100-million in cuts, which I think it�s possible to argue he really didn�t have to announce the day after. But it�s kind of one of those things that just kind of shows how there�s no evidence that the sides are coming closer together.

George: And at least there�s evidence now that Forrest Claypool is learning that the Chicago Teachers Union is not the patsy that the Unions he faced at the CTA were at that point in history. They gave up a lot of their pension and other things when Claypool was running the show there, and he might have come in with the idea since he had the same lawyer doing the negotiating by the way, Jim Franczek. He�s brilliant. But if Claypool came to CPS thinking they were going to run the same railroad he just got a wake-up call. The CTU and the rank and file - leadership to membership - is very different from that what he had.

Ken: Do you get any sense at all, and I don�t even understand my own question here, but do you get any sense at all that Forrest Claypool representing Rahm Emanuel as he does because they are lifelong friends, that these two guys are actually coming to the table willing to have different conversations than have been had in the past?

George: Yes.

Ken: Is there any possibility that things are changing?

George: Oh yes, and we saw it at the January 27th Board of Ed meeting. An organized group of people got up at the Board meeting and did what used to be called a mic check during occupy. They just chant �make the bankers pay.� And they had these little scripts and it went around. And instead of dragging them out I was there covering it with my camera, instead of dragging them out I positioned myself by the door, because I thought I was going to get the shot. Some people woul dragged out by these big burly security guys. The Board president, Frank Clark and Claypool signaled the security people not to stop the chant. So you have this weird thing. If you go to the video, the Board meeting, there�s this ten-minute segment where you can hear this stuff in the background and everybody is sort of sitting there like this, but nobody is getting dragged out. And then finally you know it wears itself down. That�s very different. You know Clark and Claypool are showing an intelligent approach to the fierceness of some of the people that are taking issue with them. And that�s very different from David Vitale and their predecessors.

Ken: Is that just optics?

George: No. I think I said this. I was signed up to speak. I was going to talk about the budget and all this stuff, and then I said I haven�t seen this since 1979-80 when Kenneth Smith was appointed president of the Board and said, �I�m not going to run a public meeting with 40 police offers ready to bash your heads.� You might have been there for that if you remember.

Ken: Yeah.

George: I just said you know this is different. Ken: I believe it was his predecessor, wasn�t Kay Rohter before him and when people were standing on her desk while she was trying to run a meeting? [Laughs] This stuff goes on for years and years.

George: Right up the street we have a school now called the Nancy B. Jefferson School and one of the people standing on the desk was Nancy Jefferson... Ken: That�s right. George: Okay, that�s what happens, after your militant career is over they name a school after you. But no, these guys really need make an effort to not escalate the tensions with that group, and they also showed a sophistication with some of the other issues that were brought before them that I haven�t seen. I mean you always say you should have your facts straight before you go public, but a lot of people just think they can say anything. You know this is 2016, look at the republican debates.

They are taking seriously everything that�s brought before them and then they�re asking questions, like well if you didn�t like the food what was wrong with the food? It was an incredible answer at the Board meeting. The people who protested the food were really protesting the federal guidelines which say we have to keep low sodium diets, therefore they can�t have as much salt as they would like. I was listening and I was thinking wow. No, because you had this whole school not eating the food and then suddenly that�s the answer? Well there�s nobody here to say that�s not the answer, so they�re being very careful. They got blind-sided obviously when the contract they thought they had a deal got rejected, but if both sides are learning from this and its obvious that Claypool�s side learns very well very fast and very carefully then something is going to come in on the other side. I would say this � 1), no contract is going to be acceptable to the members of the Chicago Teachers Union who vote on it, if it includes a pay cut of any kind, period. The last four years show, and the fact finder in 2012 in July said there should have been a pay raise much larger than was given. So that by comparison with other school districts in the area Chicago teachers are falling farther behind, or further behind depending upon your grammar book. That�s what Claypool should face and that�s where you then go to Springfield and say, �We�ve got this crazy man for Governor, blah blah blah.�

Ken: So were they kind of trying to work toward that? Didn�t they put in like a 2% or something, a sweetener on the health insurance? So they�re saying, �Well it�s not really 7%, it�s actually more like 5% and we�re going to do it in two chunks over two years.�

George: Yeah, it was two chunks over two years in the middle of the four-year deal. The four-year deal itself should have been prohibited if you�re having so much tumult in the financial end. A four-year deal would probably be a bad idea.

Ken: So you think a shorter contract would be helpful?

George: I think two years would be sellable because there�s too much suspicion and the suspicion is not going to go away. You know it�s not bad faith. Forrest Claypool walked into a mine field and there were a lot of flags out they were marking, but they didn�t know where all of them were because people didn�t clean it up enough. You can say that on his behalf, but he also put in all his own people while he said he�s reducing administration, so you�ve got to put that on him too.

Ken: And he clearly represents the Mayor, so I mean really what this is all about�and this is the question that is on all of our minds is given everything that Mayor Emanuel has been through in the last oh ten months, 12 months, whatever it is, is he at the point where he�s beginning to recognize that� Well let me put it this way, he has an interesting role model in his friend Bruce Rauner. The my way or the highway thing just kinda doesn�t work after a certain point, and maybe� I want to give these guys credit for at least being fairly smart individuals. They�re not stupid people, and is it possible that they are able to what�s the proper word � evolve, I mean is evolution possible here?

George: Probably not for a guy like Rauner who comes out of a my way or the highway structure.

Ken: I�m not sure I even included him in that.

George: Yeah. The CEO model is a bad model for anything that�

Ken: He�s never worked in government. He�s never had to understand what it�s like to have to reach consensus, so that kind of excludes�

George: Exactly. But then you get Rahm who except for his three years in the private sector as an investment banker when he made $18-million. He knows that you�ve got to wiggle and maneuver. It may be though that his time of learning and the maneuvering from the City Hall in Chicago through the Obama White House into his first term was the wrong learning time for what�s hitting in 2015 and 2016. Ken: I think that�s a good point, yeah.

George: I mean and just to put another thing on it, you know Rahm laid low after the Laquan McDonald video came out and all the protests, all the way through New Year�s Eve, the Magnificent Mile and all that stuff. And I was following the City Hall press release. Every day the press release says so mayoral activities today, because he wasn�t going to go out in front of the cameras and have everybody jump him. In the past three weeks he has been out in public just about every day with the same MO that he had public relations-wise for his whole first term. You know he�s jumping from the park district to the lake front to this and that. It�s always one of those cameras set up but no media availability. In other words, you can�t ask me any questions, but he�s there again. He wasn�t even there November, December early January. He was just keeping low and now he�s back. I think he thinks he survived the thing. He�s a smart politician. He wasn�t going to resign, and he�s smart enough to try to figure out how much he can play his power back into play. I don�t know what he�s telling Forrest Claypool, because that one exploded on both.

Ken: Yeah. I mean there have been so many of these little interesting moments. One that I was actually kind of thinking about you when this happened, the Black Friday March on Michigan Avenue Rahm Emanuel and his now fired police chief decided and they did decide this, let�s not be mistaken about this, they decided to let the protestors take over Chicago�s most important shopping street on a most important day and they just basically turned it over to them and said nothing.

George: Right.

Ken: And that was a decision. That decision came out of the fifth floor. That wasn�t just a bunch of cops saying, �Oh well, let�s just let these guys��

George: Especially because some of the people really got in the cops� faces and the cops had to sit there with them. They must have been doing novenas all week and they were out there in just certain places. No, that was a chain of command thing which shows just how well disciplined uniformed forces can be when they aren�t�

Ken: When they need to be. George: When they need to be. It was on for several weeks and months, including the protest outside Rahm�s house. Yeah.

Ken: Also I was at those budget meetings, those meetings that he held, the three meetings to get the public�s input in the budget, except that they announced the budget during the middle of the second one, but that�s a different story. But I thought it was really remarkable that protestors just went up on the stage and took over the stage and he essentially relented. He just kind of pulled to the back and when they didn�t leave he just said, �Okay, the meeting is over.� There were no arrests. There were no night sticks pulled out. This is a kind of an interesting time that we are living in.

George: I will give you an example from my undergraduate days. 1968, remember Columbia University they called the cops and bloodied the students when they sat in?

Ken: Hmm.

George: My alma mater, the University of Chicago, SDS sat in for two weeks in the Administration Building � no cops. Afterwards though everybody who had financial aid, everybody who was being sponsored for a doctorate was out. It was the quietest purge, you know, no blood. That�s an example of�

Ken: You can�t see that on camera.

George: You can�t see that on camera. That was an example of the Chicago way at its most sophisticated. A good lesson.

Ken: And the 1968 riots were the Chicago at its least sophisticated.

George: Oh and I was there, yes. Ken: Oh George, this is starting to feel like we�re sitting around having a drink together.

George: A bunch of old guys.

Ken: A bunch of old guys. You know it was real interesting back there in the old days wasn�t it George?

George: Oh yeah. Well I saw Tom Hayden wearing a false beard. Yeah, okay.

Ken: Let�s stop this. Enough. We�ll have you come back another time.

George: Good.

Ken: And we�ll carry on. George Schmidt is the publisher of Substance News, which of course is one of his attributes but there are many others, not the least of which is that he�s been around and seen it all and he has an opinion about all of it, and I always enjoy just sitting around yacking about it, even though he never was my sheet metal shop teacher Prosser, which would have been kind of fun.

00:52:24 End

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