Wednesday, September 12, 2012

Chicago Taxpayers are the Big Losers From Teachers' Strike

Lost among the sound bites arising the Chicago teachers strike is the fact that local taxpayers are getting hosed. Chicago's schools are broke. The Chicago Public Schools would have run a $665 million deficit even if the school board had only had held firm on the originally proposed 2% raise for this year. They certainly do not have a revenue stream that supports paying teachers 16% more in pay, even with the raises spread over 4 years. Thus, future tax increases will be the results of giving in to teacher's outsized salary demands. 

The school board folded on the pay raise issue almost immediately. Thus, future tax increases will be required to pay for the higher teacher salaries, unless Chicago's tax base miraculously increases. The widely publicized strike preparations of the Chicago Teachers Union over the summer led to an exodus of many families to the suburbs. The teachers actions have diminished an already shrinking tax base. Given the fact that taxpayers do not have a seat at the in these negotiation, decisions by upscale families to move out of the city are understandable.

On the public relations front, the Chicago School Board has failed miserably to communicate to taxpayers in Chicago how much a 16% raise translates into as a tax increase per household. Thus, for now Chicago's taxpayers are seem oblivious to the tax implications of the teachers' raises.

According to the Windy City Young Republicans, the total base salary/pension per year: $74,798 which if calculated into pay/per hour for the year would add up to about $34.50/hour assuming the teacher used all of their sick days.

Additionally, CPS teachers receive health coverage and are required to pay a minimal contribution from their base salary toward the plan. Currently the average contribution for a CPS teacher with a family is 1.8% of their base salary. Thus, the average teacher pays $1,282 toward the cost of their health plan. The range in employee contribution is from 1.3% - 2.8% depending on the level of coverage selected.

As long as teachers and public service unions continue to hold leverage that leads to their getting outsize raises, the downward spiral to economic calamity in cities like Chicago and states like Illinois will continue. The immense political contributions of the public unions keep politician under their control. The playing field has to be leveled if cities and states are to avoid bankruptcy. While it won't happen in Democrat party controlled Chicago, it would be a welcome development to see a school board decide to fire overpaid striking teachers and replace them with the 1000's of teachers that are out of work. 

Another teachers' strike is taking place in a suburb to the north of the city, Lake Forest. Time will tell whether the school board in this more conservative town holds the line in salary negotiations with the teachers. However, it will be challenging for the school board volunteers who care about their student to stand up to teachers that shamelessly hold students hostage.

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