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The [Wednesday] Papers

"Little-Noticed Pension Perk For Teachers Widespread In Illinois," the Tribune reports.

That's an interesting way to frame the article.

First, "Little-Noticed" implies something sly, but the "perk" you are about to learn about is quite well-noticed to administrators, teachers, districts and municipalities. It's only little-noticed insofar as every sentence in a labor agreement is little-noticed by you and me unless we're trying to actually notice it.

Second, is what we are about to learn a "perk," which implies a gratuitous bonus of sorts above and beyond standard compensation? It is not.

Third, does the perk exist just for teachers? No, it exists for administrators too.

Fourth, is it "widespread" in Illinois? Not if widespread connotes to you something above, say, 75%, to be generous (I could argue, say, 90%). In this case, it is under 65%.

(Synonyms for widespread: "extensive, universal, common, global, worldwide, international, omnipresent, ubiquitous, across the board, blanket, sweeping.")

Fifth, "in Illinois" suggests that Illinois is uncommonly "generous" with this "perk." But the article never compares Illinois to other states, so we don't really know.

Whew, that's just the headline! Now to the article:

A brief but significant phrase appears about halfway through the 106-page teachers union contract in northwest suburban School District 21:

"The Board shall pay the entire amount of the staff member's contribution to the Teachers' Retirement System (TRS)."

What that means, according to administrators, is that nearly 500 teachers in the Wheeling-based district don't have to pay anything toward their pensions - a perk worth several million dollars. Instead, the district and its local taxpayers cover the cost of teachers' pension contributions - 9.4 percent of their earnings.

Wheeling's perk for teachers is not unusual. Hundreds of districts have reported that they are covering all or some of the pension contributions that teachers, by law, are required to make, from Lombard's elementary district in DuPage County to the Zion-Benton high school district in Lake County to Rockford's large K-12 district and dozens of districts downstate, according to state data.

Taxpayers may not know about the perk because it's been overshadowed by other bargaining issues and not always easy to find or understand in teacher contracts. But the practice is in the limelight as tensions rise over negotiating a new teachers contract in Chicago Public Schools, which has its own teachers union, separate from the TRS pension for suburban and downstate educators.

Facing financial crisis, CPS officials and Mayor Rahm Emanuel want teachers to pay the full share of their pension contributions. The district has long paid 7 percentage points of the 9 percent contribution required for teachers. The Chicago Teachers Union argues that such a change would mean a steep pay cut.

Thousands of educators across the state get a better deal than CPS teachers - their districts have been paying the full amount of teachers' contributions to TRS, the largest state pension system and among the worst funded in the nation.

This is certainly interesting - and newsworthy. Good idea to do this story. But it's the last paragraph of that opening that caught my eye: Thousands of educators across the state get a better deal than CPS teachers. That, to me, is the frame. Far from being "greedy," CPS teachers already lag their peers in compensation despite working in arguably the state's most challenging circumstances.

District and union officials say the practice can attract teachers in competitive areas or provide a benefit to educators who agree to accept lower salary increases in exchange for the district covering their pension obligations. In other cases, it's a matter of tradition - a perk gets written into teacher contracts and remains there for decades.

For example, teachers in our wealthiest suburbs get terrific compensation packages including this "perk" because those districts are competing to attract "the best." This is the same rationale someone like, say, Bruce Rauner, uses to "overpay" some of his appointees. It's also something residents/taxpayers of those districts (including many of our city's reporters and editors) "demand" of their schools - and are willing to pay for.

It's also, as noted, "a benefit to educators who agree to accept lower salary increases in exchange;" as noted, but quickly lost. If this is the exchange, the "perk" isn't above and beyond their standard salary, as implied.

As for being "a matter of tradition" in some districts, I highly doubt it. It's not ceremonial. Being a standard part of a contract is not "tradition," it is a long-standing "benefit" not unlike some other thing millions of other employers have offered their workers for a long time.

What I don't see in this article are the words "Social Security," which teachers don't get. They get these pensions instead. If the media was better at reminding everyone of this, the public who (rightly) won't stand for their Social Security "benefits" being messed with would better understand why teachers are so "sensitive" about their pensions.

A teacher salary study published in April by the Illinois State Board of Education shows that 499 of 769 districts that responded said they were covering all or some pension payments for their teachers, with most districts reporting that they covered the full 9.4 percent contribution. CPS is not listed in the study.

About 90 districts in the Chicago region, roughly a third, reported paying full or partial pension contributions for teachers, but some district officials said mistakes in reporting or misinterpretations of the state's questions in the study could skew those figures.

For example, Naperville District 203 reported paying the full amount of teachers' contributions to TRS. But when the Tribune contacted the district, the chief human resources officer, Carol Hetman, said that wasn't the case. "From our perspective, we thought we were answering the right way. We're going to relook at how we answer," Hetman said. "I can tell you that we are not paying."

I have no idea what this means. You thought you were answering the right way but you are saying now you answered the wrong way. Please explain.

The situation is complicated because, according to state law, members of TRS, including teachers, "shall make contributions" to their pension plan. But districts send the contributions to TRS using money "from the same source of funds which is used in paying salary to the member."

According to TRS documents, the teacher contributions are then treated as "employer contributions" under the federal tax code, and are tax-exempt, "regardless of who actually pays the 9.4 percent contribution."

The documents also say that "while the contribution is a member obligation, the employer may agree to pay this contribution for the member as a benefit."

The pension system's stance is that teachers are paying their share, according to spokesman David Urbanek.

"It is the position of TRS that TRS members are following state law and are paying their legally mandated contributions," Urbanek said.

Nevertheless, policy experts, districts and teachers say districts are covering the pension contributions for their teachers.

Lombard School District 44 has clear language in its contract: "The board shall pay the contribution due the TRS at no cost to the teacher."

Maybe I'm not understanding this, but isn't this really saying teachers are getting screwed because some of these districts are paying contributions at the cost of teacher salaries?

Ted Dabrowski is vice president of policy at the nonprofit Illinois Policy Institute, a conservative watchdog organization in Chicago and Springfield. He spearheaded a 2011 analysis called "Teachers' Pensions: Who's Really Paying?" using data from the state Board of Education's salary study and TRS, and reviewing about 300 teacher contracts.

The conclusion: "In nearly two-thirds of districts across the state, teachers don't contribute the full 'employee share' toward their pensions. In fact, most of these districts don't require their teachers to contribute anything toward their own retirement. Instead, the contributions are paid for or 'picked up' by school districts - and by extension, local taxpayers. During the 2009-10 school year alone, this little-known perk cost taxpayers more than $430 million."

"When we came out with this, everybody called us liars," Dabrowski said in an interview with the Tribune. "Now, everybody understands what this is."

But if districts didn't pick up part or all of those teachers' pension contributions, they would instead pay higher salaries, which would presumably cost taxpayers even more. Also, notice that we've found where the "little-known perk" language apparently originates: from the conservative "policy watchdog" (boy is that being generous) Illinois Policy Institute.

The state's two teachers unions, the Illinois Education Association and the Illinois Federation of Teachers, stressed that who pays is a decision that should be made together by teachers and district officials.

"The most important point is that this is negotiated as part of the larger compensation agreement. That's why there isn't an answer to who 'should' pay it. It depends entirely on the district," said IFT spokeswoman Aviva Bowen. She added, "Every district will have a different set of circumstances and finances."

I'm not a shill for the unions, but that seems eminently reasonable.

At the IEA, spokesman Charlie McBarron said that when districts cover teachers' contributions, it's a cost saver. "If the money was paid as salary, it would be subject to FICA (payroll) tax and would, therefore, cost the district additional dollars," he said.

Which is what I just presumed. If true, the real story is that so many districts don't pick up the full contribution in exchange for lower salaries in order to save taxpayers money. Districts should be trying to pick up as much of these pensions as it can wrangle from the unions!

In addition, "districts want their students to have the best teachers in their classrooms. These agreements, where they have been negotiated, can make a district more attractive to prospective or current teachers."

I resent the fact that our "best" teachers decide to take their skills to the North Shore instead of the South Side - and I'm not sure those folks really are our best. But the point stands that districts are negotiating these agreements to attract talent. They're running their districts like a business!

In the most recent teacher contract in Cicero School District 99, the district and union agreed to get rid of the practice of paying teachers' pension contributions, instead putting the roughly 9 percent for pensions into the salary schedule, which boosts pay for teachers.

Districts are allowed to do that!

"It was a wash for the teacher, in terms of take-home pay staying the same," said Tom Smith, a regional field service director for the Illinois Federation of Teachers.

But how does it come out for taxpayers? I think you just got screwed in Cicero!

Rockford's District 205 just finished negotiating a new teachers contract and kept its long-standing perk of paying teachers' pension contributions, according to union officials and the district.

"It really didn't come up at all," said teachers union Vice President Paul Goddard.

In other words, districts don't seem unhappy with this arrangement at all - and it seems to benefit taxpayers. That's why this article appears to have been framed with an upside-down premise.

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Beachwood Radio: My Newspaper Waterloo
A police chief, a city editor and Dean's Place.

Plus: Stick To The Coffees And Teas That You're Used To; The Buffalo News's Bullshit; The New Star Wars Museum; and Stop Tweeting Prideful Pictures Of Your Punny Print Pages!

This is good stuff, people!

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Sociologists In Chicago: Fuck Nuance
Convention tweets.

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The Beachwood Tip Line: In bloom.



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Posted on August 26, 2015


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