Recently Secretary of Education Beth Purvis offered the Chicago Tribune a historical perspective on how irresponsible decisions and fiscal mismanagement have led to Chicago Public Schools’ struggles, and outlined her opinion on the need for reform of education funding in Illinois schools.
Read an excerpt from Secretary Purvis’ op-ed below:
“While the K-12 funding formula needs to be changed, those who blame the entirety of CPS' financial woes solely on the formula are either disingenuous or misinformed. The major struggle that CPS faces is rooted in the historical, bloated administrative costs of the district and the underfunding of the Chicago Teachers' Pension Fund, which was 100 percent funded as recently as 2001.
Chicago has been responsible for funding its own teacher pensions for more than 100 years. When the mayor was given direct management authority over Chicago schools in 1995, the state legislature declared a good-faith intention to help CPS by contributing 20 percent to 30 percent of the pension costs every year. The state also began to give CPS roughly $250 million extra per year in annual block grants that no other school district was eligible to receive. In the last four years alone, that extra block grant has netted CPS an additional billion dollars. These special payments have more than compensated CPS for the normal cost of its pension fund over the last 15 years.
The stunning fact is that while the state provided major assistance to CPS, Chicago shirked its own duty to pay its pensions. From 1995 to 2015, the state sent CPS payments totaling approximately $1.1 billion for pension contributions. During that same time frame, CPS skipped pension payments for 10 straight years and received General Assembly approval for three additional years of contribution reductions.
Not paying the actuarially calculated amount every year effectively makes taxpayers borrow from the pensions at their long-term rate of return, which for CTPF is 7.75 percent. Chicago's pensions today are only 52 percent funded, forcing CPS to take out what the Tribune called a "payday loan" in order to make its upcoming payment of $675 million.
Given these conditions, it is no surprise that CPS leader Forrest Claypool is now asking for a financial bailout for the irresponsible behavior of his predecessors, but let's not be confused. This additional allocation for CPS is not to restore equity — it's to make up for years of financial mismanagement.”