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Pension Payments Could Mean Cuts in Chicago Schools

August 13, 2009

From an article here.

By state law, CPS has to pay over $300 million to its pension fund this year. That’s a 73 percent increase over last year. And next year CPS says it will owe over a half billion dollars.

From $174 million in payments last year (2008) to $500 million next year?  Ouch.  That will leave a mark.

Schools chief Ron Huberman says he wants the state legislature to limit how much the district’s obligation can increase from year to year.

There are only three ways to limit the district’s obligation

  • borrow money
  • place the burden onto the taxpayers of the state (basically distributing the costs of Chicago Public Schools to the rest of the state)
  • reduce benefits

I hope to god he is not advocating the borrowing of money.  Debt is what got us into the predicament the United States is in.  More debt won’t get us out.

I highly doubt he is advocating for a reduction in benefits.  Maybe he is, but I doubt it.  This leaves placing the burden on the rest of the Illinois tax payers.  Socializing losses seems to be all the rage these days, so I suspect this is what he means.

HUBERMAN: There’s not one pot of money for classrooms, after-school programming, sports—the things that matter most to our students—and another pot of money that’s for pensions. It’s one big pot of money. And when you take a look at that big pot of money—every dollar that goes into a pension is a dollar that doesn’t go into a classroom.

And this is exactly what I fear.  We will almost certainly decrease our commitment to educating students in order to pay the benefits we promised to retired people.  How we possibly thought we could have people work for 30 years and receive a significant pension for another 30 years is beyond me.   All these problems were masked by the baby boomer bubble and will come to light as they begin to retire.

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