![]() But the fact that CPS stopped automatically pumping property tax revenues into teacher pensions to supplement the regular employee contributions during Vallas’ tenure remains a point of contention. Over the last few years, property taxes were added back as a source to help cover teacher pension payments, and actuarial funding benchmarks have helped ensure better payments. That impacted all the systems … So when people try to say that somehow I was responsible, it’s hogwash.” “Things really begin to deteriorate three or four years later, when the earnings drop and they do a pension holiday during the Great Recession - at the absolute wrong time to be doing a pension holiday. “The Chicago teachers’ retirement system was extremely healthy,” Vallas said of his time at CPS. Vallas noted the retirement system suffered a major hit that pushed funding ratios way below the healthier levels on his watch because the state granted pension holidays following the 2008 recession - long past Vallas’ time at Chicago schools. “That’s basically protecting against any future losses,” such as drops in investment earnings. “Even when a fund is well-funded, it’s important to continue to make annual contributions to it,” said Sarah Wetmore, the Civic Federation’s vice president and director of research. In that decade after the property tax revenues were shifted into other school programs, CPS collected the equivalent of “$1.2 billion in pension tax revenue but contributed $0 to the fund” for teacher pensions, a point cited in 2013 legislative testimony by Kevin Huber, then-executive director of the Chicago Teachers’ Pension Fund. “The bottom line is, if the earnings would have gone south, we would have been mandated to put the dollar amounts in to compensate,” Vallas said.īut Martwick said skipping those payments haunted the system when the economy later soured and exacerbated today’s financial troubles. With funding levels over 100%, Vallas said, “we didn’t have to” redirect CPS money into the teacher retirement system because the robust investment earnings kept the funds above the law’s 90% trigger point that required CPS to pitch in. 3, 1997, after announcing a community service mandate for high schoolers. ![]() Robert Shaw leave Southside College Preparatory Academy on Sept. Robert Martwick, a Chicago Democrat who chairs the Senate’s pension committee and has not endorsed in the mayor’s race.Ī major downside to the 1995 law, Martwick said, was that property tax payments to the pension system could be skipped as long as fund balances exceeded 90%, leading to CPS spending much of that money for a decade on other school purposes.Ĭhicago Public Schools CEO Paul Vallas, from left, Mayor Richard M. “It was a horrible, horrible financial decision,” said state Sen. Daley picked Vallas, at the time the city’s budget director, to be CPS’ first CEO, and the fiscal move gave Vallas the flexibility he needed to help straighten out the budget.Īt a recent mayoral debate, Vallas said the teacher pension system carried a 104% funding level during his time as CEO and he became mildly irritated in last week’s interview when asked whether any of his actions played a role in the current condition of the pension fund, which one expert said is hovering under 50%. ![]() Jim Edgar in 1995 overhauled how CPS was organized and gave Chicago ’s Democratic Mayor Richard M. The move came after the Republican-led legislature and GOP Gov. The pocketbook maneuver that critics most blame on Vallas is the decision to shift property tax revenue from going directly into teacher pension funds to ensure it remained highly solvent and to instead spend that money on other school expenses. But he also oversaw changes that shifted annual payments from the Chicago Teachers’ Pension Fund that critics say hurt the system over the long haul. Vallas says he left a surplus on CPS’ books.
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