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labor Teachers Union Offers To Compromise On Pensions

Chicago Teachers Union President Karen Lewis specifically said the union is willing to consider reducing benefits for those who still are working, although she emphatically ruled out changes for members who already have retired. But such compromise wont come until the city and the school board agree to contribute more to pensions each year in order to at least partially make up for a contribution shortfall that occurred during much of the past two decades.

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In an uncharacteristic peace gesture, Chicago Teachers Union President Karen Lewis says she's prepared to offer pension concessions covering thousands of her members — but only under certain circumstances.
During an appearance yesterday afternoon before the Crain's editorial board, Ms. Lewis specifically said the union is willing to consider reducing benefits for those who still are working, although she emphatically ruled out changes for members who already have retired.
"There could be some modification (for current workers)," said Ms. Lewis, who has a reputation as a firebrand and who on May 5 opened the door to a second teachers strike in three years. "We're interested in talking about modifications, yes."
Ms. Lewis would not list what "give-backs" might be on the table and specifically declined to say whether it would include a reduction in the current 3 percent compounded annual cost-of-living increase.
All active union members are in line for the 3 percent compounded COLA, which retired members already receive.
But legislation passed by the Illinois General Assembly in December slashes that figure for downstate and suburban teachers, generally continuing a 3 percent COLA, not compounded, and only the first $25,000 a year in pension.
"We're not going to discuss that (now)," she said. "Until we have the finances portion in place, we're not going to talk about cuts."
That was a reference to the the union's long-standing demand that the city of Chicago and the Chicago Board of Education agree to contribute more to pensions each year in order to at least partially make up for a contribution shortfall that occurred during much of the past two decades. The increased payments are intended to bring the teachers' pension fund up to actuarially required levels.
Ms. Lewis' comments came amid a presentation of CTU ideas about how to raise the billions of dollars that will be needed to shore up the teachers' pension fund. It now only has about half of the assets it will need to pay promised benefits.
MOVING THE NEEDLE
Most of the items on her list face intense political opposition, including a commuter tax on suburbanites who work in Chicago and a transactions tax on customers of the Chicago Mercantile Exchange and other financial markets that could drive trading business out of town.
But Ms. Lewis said Chicago Public Schools officials lately have been "more open to discussion than in the past."
She didn't say what they're "open" to. A source who should know says a plan to dedicate revenue from expiring tax-increment financing districts is picking up steam because it would provide a revenue stream for pension bonds without raising the overall property tax rate above today's level.
Ms. Lewis said she and her union's 26,000 members generally oppose raising property taxes for pensions, as Mayor Rahm Emanuel has proposed to refinance two city pension funds that cover laborers and white-collar workers. That measure is sitting on the desk of Gov. Pat Quinn, who has threatened to veto it.
My sources tell me Ms. Lewis privately has floated her latest ideas by school officials and that despite a lot of chest beating in public, some progress is being made.
Yet any reduction in pension benefits likely would have to affect retirees, too, in order to achieve real savings, one source said. But Ms. Lewis' offer is "the start of the basis for a deal," the source said. "You're moving the needle."
Any change in the pension system will require the approval of state lawmakers. With the General Assembly scheduled to adjourn at the end of the month, any action on pensions appears increasingly unlikely until at least the fall veto session.